THE IMPACT OF PROPERTY DEVELOPMENT ON ROAD DENSITY

Muhammad Zaly Shah and Hishamuddin Mohd Ali Faculty of Built Environment, Universiti Teknologi Malaysia, UTM Skudai 81310, Johor Bahru, Johor, Malaysia b-zaly@utm.my 2 Faculty of Engineering and Geoinformation, Universiti Teknologi Malaysia, 81310 Johor Bahru, Johor, Malaysia hisham@fksg.utm.my
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ABSTRACT: The constructions of buildings and dwellings have long been known to increase the number of trips generated on existing road network. However, how these buildings and dwellings affect road infrastructure is not well understood. It is the purpose of this study to evaluate the impact of property development on road infrastructure as measured by road density. For this, the study looks at several types of properties residential, governmental, industrial and commercial together with several socio-economic indicators (e.g. household income, car ownership, etc.) to see how these variables affect road density. The analytical model used is the multiple linear regressions with road density as the dependent variable. The empirical data used in this study are property data and socio-economic data collected between 1990 and 2000 obtained from the town of Kuantan. Using the data from the town of Kuantan, the regression model was developed and calibrated. Results from analysing the prediction error with the RMSE statistics indicate that property development has significant impact on road density for the town of Kuantan. Keywords: Property development, land use planning, road density, multiple linear regression

1. INTRODUCTION As our towns and cities grow, both in terms of their population size and functions, the relative advantage of locations and accessibility within them has changed through time because of the development of new roads in response to the current pressure for development (Hansen, 1959). Inevitably, these developments provide different level of accessibility to new locations. This in turn will ease the movements or reduce the travel costs between locations, which open up new opportunities and contribute to the economic vitality of specific economic and social activities as well as residential locations. Recent development in highway development in Malaysia especially toll highways have produced some significant effects in term of accessibility to certain locations resulting in land use changes in certain localities along these highways. The completion of the 848 km North-South Expressway (NSE) in 1994 and other urban toll highways especially in the Klang Valley area have enhanced accessibility to the previously remote areas and created great potential for new developments. Fast development that took place in Rawang (Rawang industrial park), Bukit Beruntung, Serendah (national car project and auto industrial park) in Selangor, Bukit Merah in Perak and Nilai in Negeri Sembilan, to mention a few, were a direct impact of improved accessibility resulting from the NSE development. The same has occurred to Puchong, in which Puchong has been transformed from a small rural town to a modern township accommodating a population of more than fifty thousand within a short span of time induced by the development of Damansara-Puchong Highway. The conclusion that can be reached is that road infrastructure has a significant influence on building construction residential, commercial, industrial or governmental (Wingo, 1961). However, currently, there is a lack of empirical research that attempts to mathematically model the relationship between road infrastructure and property development. This paper, therefore, presents the result of a study that develops such a model - a model that relates property and road infrastructure (as measured by road density).

2. URBAN MARKET MODEL An understanding of the interaction between property development and the provision of road infrastructure must be clearly understood if an attempt is to be made to relate these two factors - property development and road construction. This understanding can be facilitated with the aid of the urban market model as given in Figure 1.

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Land use plans Zoning policies

Services
Police Schools Garbage

Governments

Infrastructures
Transportation

Land
Build

Location Land use Land cover Build

Accessibility

Type Size Age Units

Housing

Developers

Floorspace

Size Type Age

Households
Income Size Structures

Labor, Goods, Services etc.

Businesses
Industries, Employees, Wage

Flow of consumption from supplier to consumer Regulation or Pricing

Figure 1. Urban Market Model

From the above urban market model, it is observed that land is an asset for property developers (Alonso, 1964). Using the land banks, these developers either provide units of houses or floorspace for commercial, industrial and governmental usage. The floorspace is used to conduct businesses that require individuals, residing in various types and sizes of houses, as employees in exchange of wages. With the wages, the employees of one business are converted into customers of the other businesses. Inevitably, customers and employees alike must have access to these businesses so that goods and services can be consumed, and wages earned. Transport infrastructures (e.g. road, rail etc.) then provide accessibility to these businesses. What is interesting from the urban market model in Figure 1 is that, apart from property development, other factors like households socio-economic characteristics and employment indicators also play important roles in the development of road infrastructure (de la Barra, 1989). Hence, the modeling of the interaction between road density and property development must also consider the households and employment factors. 3. METHODOLOGY The functional relationship between road density, employment, households and property development is described as follows:

Yt = f ( Et , H t , Pt )
Where:

(1)

Yt Et Ht Pt

= Road density at time t = Employment level at time t = Household characteristics at time t = Property market at time t

In fact, the functional relationships between the independent variables in Eq. (1) are not mutually exclusive. For example, the household characteristics are dependent upon the availability of employment as well as on the availability of housing facilities (i.e. a function of property market). Similarly, the employment level is in turn dependent upon the availability of labour/manpower provided by the population. Also, for businesses/industries to operate (and, offer employment), there must be appropriate building facilities available. Invariably, the multicollinearity between these

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variables makes mathematical modelling increasingly complex. Fortunately, the multicollinearity can be detected using the tolerance statistic where if the Variance Inflation Factor (VIF), defined as the reciprocal of the tolerance, is large (i.e. VIF > 4) then the result indicates the existence of multicollinearity. The functional relationship of Eq. (1) is quantified using the multiple linear regression. The calibration of the regression equation will be done using a test data set to determine the appropriateness of the model in describing real-life phenomena. To aid the calibration process, the Root Mean Squared Error (RMSE) statistics is used to measure the calibration error. The RMSE statistics is given in Eq. (2):

RMSE =

1 n 2 et n t =1

(2)

Where e is the calibration error, the difference between the actual road density and the predicted road density as predicted by the functional relationship of Eq. (1). The RMSE measures of accuracy identify the usefulness and reliability of the regression models in predicting road density. However, the RMSE is not capable of testing the degree of closeness of the predicted values to the actual ones. For this, the study employs a two-tailed, unequal variance t-test to test the following hypothesis:

H 0 : et = 0

(3)

Against the alternative that the average calibration error is not equal to zero. If the decision is to accept the null hypothesis, then the test concludes that there is evidence to show that the mean forecasted road density is statistically equal to the mean of actual road density. On the other hand, if the null hypothesis is rejected (i.e. accepting the alternative hypothesis), then the test has concluded that the evidence shows that the mean forecasted road density is statistically not equal to the mean actual road density. 4. DATA COLLECTION The Kuantan Municipal Council (KMC) administrative area covers an area of 36,022 hectares which defines the study area. This includes the Kuala Kuantan, Ulu Kuantan, Beserah and Sungai Karang districts. However the area that is considered to have significant development is only about 18,676 hectares while the rest is the forest reserve or marshes. The existing land use of KMC area is dominated by the agriculture and housing. The total area for agriculture use is about 3,534 hectares while housing occupies about 3,409 hectares. This is followed by secondary forest and vacant land (2,392 hectares), institutions (681.25 hectares), industries (201 hectares) and commercials (167 hectares). For data collection purposes, the study area is divided into grids of 1 square km. The data are collected for a period of 10 years from 1990 to 2000. The year 2000 data forms the baseyear data which later will be used for calibrating the regression model described in the previous section. The data to be collected according to the variables are given in Table 1. The dependent variable is road density while the independent variables are group into employment, households and property as determined by Eq. (1). Table 1. Study variables Variable Group Road Infrastructure (Y) Employment (E) Households (H) Variables Road density (Y) Total number of employees (E1) Number of households (H1) Population size (H2) Average income (H3) Car ownership level (H4) Residential unit (P1) Residential land value (P2) Residential land improvement value (P3) Fraction residential land (P4) Commercial square feet (P5) Commercial land value (P6) Commercial improvement value (P7) Industrial square feet (P8) Industrial land value (P9) Industrial improvement value (P10) Government square feet (P11)

Property (P)

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Government land value (P12) Government improvement value (P13)

As for the property data, the data in Table 1 indicates that this study will consists of three forms of property data: 1. 2. The supply aspects such as residential unit and commercial, industrial and government space (i.e. the supply) The land value and the improvement value of respective property type (i.e. the land value and the improvement value), and The land value of respective property type (i.e. property value)

3.

Additionally, the property data collected will be from four main property types - residential, commercial, industrial and government buildings. Table 2 shows some examples for each of these property types that can be found in the town of Kuantan. Finally, Table provides selected study statistics by property type in Kuantan.

Table 2. Categories of Property, and their examples, in the town of Kuantan

Residential Single storey terraced One and half storey terraced Double storey low cost terraced Double storey medium cost terraced Double storey terraced Single storey semi detached Double storey semi detached Single storey detached Double storey detached

Commercial Double storey terraced Three storey terraced Three and half storey terraced Four storey terraced

Industrial Single storey terraced One and half storey terraced Single storey semi detached One and half storey semi detached

Government Building Civil Aviation Department Royal Malaysian Air Force Fisheries Department District Office Secretary of State Maritime Department Rural Development Ministry Home Ministry Fire Department Immigration Department Courts Public Works Department Road Transportation Department Ministry of Health Department of Survey Education Ministry

Table 3. Selected study statistics by property type Property Type Supply (Hectares) 3,409.34 167.18 200.92 681.25 Improvement Value (RM) Mean Std. Deviation 50,200.00 25,825.00 147,750.00 64,987.00 83,474.00 43,288.00 79,184.00 336,046.00

Residential Commercial Industrial Governmental

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5. RESULTS The process of identifying the regression equation starts of with checking for multicollinearity among the independent variables. As a rule if the Variance Inflation Factor (VIF) is greater than four, i.e. VIF > 4, the variable is considered to be collinearly related with other independent variables. From Table 4, it can be seen that the following variables are suspected to be collinearly related with other independent variables since their VIF values are greater than 4, i.e. VIF > 4: Residential improvement value Residential land value Residential units Non-residential land value Fraction residential land Total Persons Total Workers Total Cars

Therefore, based on the VIF statistics, the above independent variables will be eliminated from the list of independent variables.

a Coefficients

Model 1

(Constant) RESIDENTIAL_IMPROV -1.16E-04 EMENT_VALUE RESIDENTIAL_LAND_V 1.264E-04 ALUE COMMERCIAL_SQFT 6.370E-06 INDUSTRIAL_SQFT 1.582E-06 GOVERNMENTAL_SQF-2.33E-06 RESIDENTIAL_UNITS -3.99E-02 COMMERCIAL_IMPROV 7.664E-05 EMENT_VALUE INDUSTRIAL_IMPROVE 8.914E-06 MENT_VALUE GOVERNMENTAL_IMPR -1.39E-06 OVEMENT_VALUE NONRESIDENTIAL_LAN -1.84E-05 D_VALUE FRACTION_RESIDENTI 12.938 AL_LAND sum(persons) 1.047E-02 sum(workers) 1.164E-02 avg(income) 1.188E-03 sum(cars) -4.77E-02

Standardi zed Coefficien Unstandardized ts Coefficients B Std. Error Beta .246 .213 .000 .000 .000 .000 .000 .018 .000 .000 .000 .000 2.324 .005 .019 .000 .022 -.247 .426 .098 .130 -.029 -1.265 .250 .022 -.015 -.074 .294 1.849 .472 .184 -1.001

t 1.154 -2.704 4.316 2.544 3.934 -1.026 -2.181 4.368 .602 -.532 -1.417 5.567 2.235 .613 4.225 -2.177

Sig. .249 .007 .000 .011 .000 .305 .030 .000 .547 .595 .157 .000 .026 .540 .000 .030

Collinearity Statistics Tolerance VIF .077 .066 .434 .591 .794 .002 .197 .478 .793 .239 .231 .001 .001 .340 .003 12.932 15.133 2.306 1.692 1.259 522.178 5.067 2.093 1.262 4.186 4.332 1061.708 919.944 2.945 328.396

a. Dependent Variable: PERCENT_ROADS

Table 4. The analysis of collinearity

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In the following step, the remaining independent variables are tested for their significance. The hypothesis for this test is:

H 0 : i = 0
Which specifically test if the coefficient of the independent variable i,

i , is equal to zero against the alternative that it

is not equal to zero. Table 5 shows the significance value (i.e. the p-value) for each of the remaining independent variables. Table 5. Testing the significance of the independent variables
a Coefficients

Model 1

Unstandardized Coefficients B Std. Error (Constant) .191 .260 COMMERCIAL_SQFT 1.793E-05 .000 INDUSTRIAL_SQFT 1.143E-06 .000 GOVERNMENTAL_SQFT-2.48E-06 .000 INDUSTRIAL_IMPROVE -1.81E-05 .000 MENT_VALUE GOVERNMENTAL_IMPR -2.76E-06 .000 OVEMENT_VALUE avg(income) 3.843E-03 .000

Standardi zed Coefficien ts Beta .276 .094 -.031 -.045 -.030 .595

t .734 8.572 2.456 -.901 -1.157 -.880 18.504

Sig. .463 .000 .014 .368 .248 .379 .000

a. Dependent Variable: PERCENT_ROADS

Table 6 shows the result after removing the insignificant variable from the multiple linear regression model: Table 6. Result after removing the insignificant variables

Coefficientsa Standardi zed Coefficien ts Beta .265 .070 .587

Model 1

Unstandardized Coefficients B Std. Error (Constant) .157 .259 COMMERCIAL_SQFT 1.721E-05 .000 INDUSTRIAL_SQFT 8.555E-07 .000 avg(income) 3.788E-03 .000

t .604 8.378 2.236 18.416

Sig. .546 .000 .026 .000

a. Dependent Variable: PERCENT_ROADS

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With the information in Table 6, the final regression model for Kuantan is: Road Density = 1.721E-5*P5 + 8.555E-7*P8 + 3.788E-3*H3 where: P5 P8 H3 = Commercial Square Feet = Industrial Square Feet = Average household income

After calibrating with the baseyear data, the above regression model for Kuantan gives an RMSE = 5.0588. The calibration for Kuantan with reference to the baseyear 2000 data undoubtedly shows a promising result when the capability of the resulting regression equation is concerned despite some differences between the actual and the predicted road density for the year 2000, i.e. the calibration error. However, there is still a need to test the hypothesis that these differences are not significant. For the town of Kuantan with n = 536 grids, the two-tailed, unequal variance t-test concluded that the differences are not significant since p = 0.2699 which is greater than = .05. This result is translated to no statistical differences between actual and predicted road density. Based on the result of the above test of hypothesis, it shows that the final regression model is robust at predicting the road density for Kuantan. This conclusion is supported by the measures of accuracy and the test of hypothesis.

CONCLUSION The results show that it is possible to develop a parsimonious model with just three independent variables to adequately explain the relationship between the independent variables (i.e. the property, households and employment factors) and road density. What is interesting is that out of the 18 independent variables that the study starts off with, two out of three significant variables are property variables. The empirical model indicates the changes in road density are contributed by the changes in property market, which are commercial and industrial development besides household income.

REFERENCES Alonso, W. (1964). Location and Land Use. Cambridge, MA.: Harvard University Press. De la Barra, T. (1989). Integrated Land Use and Transport Modelling: Decision Chains and Hierarchies. Cambridge: Cambridge University Press. Hansen, W.G. (1959). How Accessibility Shapes Land Use. Journal of the American Institute of Planners. 25. Wingo, L. (1961). Transportation and Urban Land. Baltimore: John Hopkins Press.

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