Transport

for NSW Transport Modelling

Guidelines
Volume 1: Place
Forecasting
Guidelines
October 2024

T
AF
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transport.nsw.gov.au

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Document Control

Document Owner Navreet Virdi (Senior Manager Model Planning)

Approved By Director Transport Modelling
Document Number TS 05461.1
Branch | Division Planning, Integration and Passenger | Transport Planning
Review Date 15/10/2024
Superseded Documents TS05461 - Traffic Modelling Guidelines (2013)
TS 05445 - Traffic Signals in Microsimulation Modelling (2018)
TS05442 - Operational Modelling Reporting Structure (2017)

Version

Version Amendment Notes

0.1 Public Exhibition (20/10/2024)

Overview

The Transport Modelling Guidelines are a suite of volumes designed to guide the development and
application of transport models in New South Wales. These Guidelines are produced in 7 volumes:
(0) Introduction, (1) Place Forecasting Guidelines, (2) Strategic Modelling Guidelines, (3) Operational
Modelling Guidelines, (4) Active Transport Modelling Guidelines, (5) Emerging Modelling
Techniques and Trends, and (6) Guide to Practitioners. Practitioners are encouraged to read and
familiarise themselves with all volumes of these Transport Modelling Guidelines.

Disclaimer

TfNSW ensures the Guidelines are accurate at publication but makes no guarantees they are error-
free, up-to-date, or compliant with all laws. TfNSW is not liable for any loss, damage, or
consequences from using the Guidelines. Seek professional advice before applying this guidance.

Acknowledgements

These Guidelines were developed by Transport for New South Wales’ Transport Modelling Function
in conjunction with industry specialists and internal subject matter experts. The project was led by:

• Frank Milthorpe, Modelling Technical Advisor (Project Director)

• Dr Navreet Virdi, Senior Manager Modelling Planning (Project Manager and Lead Editor)

Transport for New South Wales also acknowledges the significant input from subject matter
experts across NSW Government in particular members of the Transport Modelling Tools and
Methodology Working Group, including Transport Planning, Regional and Outer Metropolitan,
Sydney Metro, Cities and Active Transport and Infrastructure and Place; and the collective skills and
diversity of ideas contributed by a consortium of industry experts during the development and
review of these guidelines including representatives from consulting organisations (various),
Regional Organisation of Councils, University of NSW | Research Centre for Integrated Transport
Innovation, and Industry stakeholders (various).

The Transport Modelling team also credits the informative approaches to Transport Modelling from
a range of organisations including Main Roads Western Australia, Australian Transport Assessment
and Planning, New Zealand Transport Agency, Transport for London, and US Federal Highway
Administration.

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Table of Contents

List of Figures.............................................................................................................................. 5

List of Tables ............................................................................................................................... 5

List of Glossary and Abbreviations ........................................................................................... 6

1 Introduction ..................................................................................................................... 11

1.1 Guideline Structure ............................................................................................................................................... 11

1.2 Purpose ...................................................................................................................................................................... 11

1.3 Out of Scope ............................................................................................................................................................ 11

2 Overview ......................................................................................................................... 12

3 Land Use Context ........................................................................................................... 14

3.1 Changing Demographic Projections in Place-Based Travel Demand Modelling .......................... 14

3.1.1 What are Travel Zone Projections ......................................................................................................... 14

3.1.2 Closed City Modelling - Demographic Projection Redistribution .............................................. 15

3.1.3 Open City Modelling – Adjusting the TZP Control Totals ............................................................. 16

3.1.4 Modifying Demographic and Economic Profiles in Travel Demand Modelling .................... 16

3.2 Overview of Transport Infrastructure Induced Land Market Demand Side Initiatives ............... 19

3.2.1 Impact of Working from Home on the Land Market Demand for Accessibility ................... 22

4 Place-Based Modelling Methodology .........................................................................23

4.1 Modelling framework for Place-Based Land Market Supply Side Initiatives ................................23

4.1.1 Step 1: Preparation of the Base Case Land Use Scenario ............................................................24

4.1.2 Step 2: Redistribution of Growth for the Base Case Land Use Scenario ...............................25

4.1.3 Step 3: Preparation of Project Case Land Use Scenario ..............................................................25

4.1.4 Step 4: Change in Population Demographic Profile and Employment Economic

Character ..........................................................................................................................................................................26

4.1.5 Step 5: Redistribution of Growth for the Project Case Land Use Scenario ..........................26

4.1.6 Step 6: Transport Infrastructure Required to Realise Forecasted Growth ...........................26

4.2 Transport Infrastructure Induced Land Market Demand Side Initiatives ....................................... 28

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4.2.1 Step 1: Model the Project Area of Influence ......................................................................................29

4.2.2 Step 2: Review the Travel Zone Projections ......................................................................................29

4.2.3 Step 3: Estimate Population and Employment Demand Response ..........................................30

4.2.4 Step 4: Update the Demographic Forecasts ..................................................................................... 31

4.2.5 Step 5: Redistribute Growth .................................................................................................................... 31

4.2.6 Step 6: Calibrate the Demographic Forecasts ................................................................................. 31

5 Application of Supply and Demand Side Modelling in Economic Analysis ............ 33

References................................................................................................................................ 34

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List of Figures
Figure 1: Integrated urban land use and transport systems analysis for transport infrastructure
projects (blue) and place-based projects (red) ........................................................................................................ 13
Figure 2: TZP22 population change example (left), TZP22 employment change example (right) ....... 15
Figure 3: Land market bid-rent curve. Source: based on concepts developed by (Alonso 1966) .........20
Figure 4: Travel demand modelling for place-based land market supply side initiatives ....................... 27
Figure 5: Travel demand modelling for transport infrastructure induced land market demand side
initiatives .................................................................................................................................................................................32

List of Tables
Table 1: TfNSW Population Synthesiser generator variable input requirements .........................................17
Table 2: TfNSW Sydney STM attractor variable data input requirements .................................................... 18
Table 3: Travel patterns of the residents of selected Local Government Areas on an average
weekday, pre-COVID (FY 2019/20) and post-COVID (2022/23) ......................................................................... 22

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List of Glossary and Abbreviations

Term Definition
AADT Annual Average Daily Traffic
ABM Agent Based Modelling
ABM Activity Based Models
ABS Australian Bureau of Statistics
AI Artificial Intelligence
Aimsun Simulation software for transportation planning and traffic management.
AITPM Australian Institute of Traffic Planning and Management
Represents the typical weekday (Tuesday to Thursday) morning peak period in
AM which most pedestrians travel from their homes to their places of employment
or education. This period is generally between (or a subset) 6am and 10am.
API Application Programming Interface
ASC Alternative Specific Constant
ATAP Australian Transport Assessment and Planning
ATC Automatic Traffic Count
ATC Adaptive Traffic Control
Association of the Australian and New Zealand transport agencies,
Austroads
representing all levels of government
AV Autonomous Vehicles
BITRE Bureau of Infrastructure and Transport Research Economics
BLoS Bicycle Level of Service
BOAM Bus Opal Assignment Model
Calibration Process of comparing model forecasts to a real set of travel behaviour
CAV Connected Autonomous Vehicles
CBA Cost Benefit Analysis
CBD Central Business District
CCTV Closed Circuit Television
CGE Computable General Equilibrium
The end-user of the assessment. This may be TfNSW or another entity
Client
(including private organisations).
COP Common Operational Practice
Cordon Boundary within a larger (model) area
Core area Primary area of focus of a model
CR Coincidence Ratios
CSIRO Commonwealth Scientific and Industrial Research Organisation
CT Cycle time in traffic signal phasing plan
CUBE Predictive transportation modelling and simulation software
CV Connected Vehicles
D Average density
DP Differential privacy – part of Deep Learning
DPHI Department of Planning, Housing, and Infrastructure
DTA Dynamic traffic assignment
DVC Data version control
Vehicle-based traffic simulation and DTA that combines mesoscopic and
Dynameq
microscopic properties
EJD Effective Job Density
EMME Strategic multi-modal transport modelling software

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ETCM Enhanced Train Crowding Model

EV Electric Vehicles
EV Evening Peak Period
FHWA Federal Highway Administration
FLS Fire Life Safety
FMM Freight Movement Model
FOAM Ferry Opal Assignment Model
Mathematical approximation to create a matrix of origins and destinations
Furness
matching a given set of trip totals
GC Generalised Cost
Geoffrey E. Havers (GEH) statistic is a form of Chi-squared statistic commonly
GEH
used to compare modelled and observed hourly counts.
GIS Geographical Information System
GIS SEN GIS Spatially Enabled Networks
GMA Greater Metropolitan Area
GPS Global Positioning System
General transit feed specification - open standard used to distribute travel
GTFS
information about transit systems to passengers.
HCL Highest cycle time in traffic signal phasing plan
Highway Capacity Manual produced by the United States of America
HCM
Transport Research Board
Heavy Commercial Vehicle. Austroads vehicle classification system Class 3
HCV higher (e.g., rigid truck or bus, semi-trailer, road train, etc.) used for
business/commercial purposes
Walking or cycling for pleasure or experience (i.e., recreation or exercise) and
Hedonic trips may or may not have a specific destination. These trips cannot be replaced (or
undertaken) by another mode since the intent is to walk or cycle.
Travel time data from multiple sources, including connected car probes,
HERE
roadway sensors, and live operations centres
HOV High occupancy vehicle
HTS Household Travel Survey
Model consisting of multiple levels of detail, e.g., mesoscopic model with a
Hybrid
microsimulation area contained within it
IA Infrastructure Australia
IDM Intersection Diagnostic Monitor
INSW Infrastructure NSW
IP Inter-Peak period
IVT In-Vehicle Time
JTW Census Journey to Work
kp Link occupancy in a simulation model
Light Commercial Vehicle. Austroads vehicle classification system Class 1 or 2
LCV vehicles (e.g., van, utility, SUV, etc.), but excluding bicycles and motorcycles,
used for business/commercial purposes
LCVM Light Commercial Vehicle Model
Pedestrian modelling and simulation software that models a space where
Legion
people converge.
LGA Local Government Area
Light vehicle Car, motorcycle, SUV, with or without trailer
Software that models traffic signals and their effect on traffic capacities and
LinSig
queuing.

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LoS Level of Service

LP Link plan – in traffic signal co-ordination
MaaS Mobility as a Service
Macroscopic Large-scale model with more simplified (aggregated) elements and variables
MassMotion Pedestrian and crowd simulation software.
Mesoscopic Intermediate scale and level of detail between microscopic and macroscopic
mf Maximum flow
Microsimulation Smaller scale model with more detailed elements
ML Machine Learning
MSA Method of Successive Averages
MTW Method of Travel to Work
Multi-modal Model representing several modes of transport (e.g., car, truck, train, bus,
modal pedestrian, cyclist, etc.)
MWCOG Metropolitan Washington Council of Governments
ND Normalised Deviations
Net Ops Network operations
NSW New South Wales
O-D Origin Destination
OP Offset plan – in traffic signal co-ordination
Opal is the smartcard ticketing system used to pay for travel on public
Opal transport in Sydney, the Blue Mountains, Central Coast, the Hunter and the
Illawarra.
P Flow volume
Paramics 3D traffic simulation software.
PB Place-Based Projects
PB-SA-FMM Port Botany – Sydney Airport Freight Movement Model
PCT Propensity to Cycle Tool
PCU Passenger Car Unit
PHT Passenger-Hours Travelled
PKT Passenger-Kilometres Travelled
Represents the typical weekday (Tuesday to Thursday) afternoon or evening
peak period in which most pedestrians travel from their places of employment
PM
or education back to their homes. This period is generally between (or a
subset of) 3pm and 7pm.
PNSW Property NSW
PoC Proof of Concept
PT Public Transport
PTIPS Public Transport Information and Priority System
PTPM Public Transport Project Model
Software company producing transport modelling software including Vissim
PTV
and Visum
Python High-level general purpose computer programming language
R2 Correlation between count data and predicted model volume
RAND The 8-case pivoting method developed by RAND Europe and TfNSW
Set of five categories describing the level of responsibility of a person for the
RASCI transport modelling process (Responsible, Accountable, Support, Consulted,
Informed)
rCITI Research Centre for Integrated Transport Innovation
RFM Regional Freight Model
RLF Rail, Light Rail and Ferry

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RMS Roads and Maritime Services NSW, now known as Transport for NSW
RMSE Root Mean Square Error
ROAM Rail Opal Assignment Model
RTA Roads and Traffic Authority, now known as Transport for NSW
RTM Regional Travel Model
S Average Speed
SA2 Statistical Area 2 (ABS Census)
SA3 Statistical Area 3 (ABS Census)
SAE Society of Automotive Engineers
SALTM Sydney Airport Landside Transport Model
Saturation Flow Maximum rate at which vehicles can pass through a lane or transport link
SCATS Sydney Coordinated and Adaptive Traffic System
Sydney Coordinated Adaptive Traffic System Simulation. Software that allows
SCATSIM a SCATS system to be linked to Traffic Micro Simulation software packages
for modelling purposes
Screenline Notional line/boundary on a map that crosses one or more transport links
SFM Strategic Freight Model
SHRP Strategic Highway Research Program
SIDRA Intersection traffic modelling software for single intersections or a network
SME Subject Matter Expert
SMPM Strategic Motorway Planning Model
SPE SCATS Priority Engine
SPSG Station Planning Standards and Guidelines
SRMS SCATS Ramp Metering System
SS Sub-system
Microsimulation modelling tool for the prediction of pedestrian movement
STEPS
under normal and emergency conditions.
STFM Strategic Traffic Forecasting Model
STM Strategic Travel Model
T2 or T3 Transit Lane requiring a minimum number of people per vehicle
TAG Transport Analysis Guidance
TASM Transport Appraisal & Strategic Modelling
TCS Traffic Control Signal
TDD Test-driven development
TELCO data Data generated by telecommunications companies
TfL Transport for London
Transport for New South Wales is the government transport and road agency
responsible for transport infrastructure and operations in NSW, including
TfNSW
customer experience, planning, policy and procurement. Referred to as
Transport or more commonly TfNSW in short form.
TI Transport Infrastructure Projects
TIA Traffic Impact Assessment
TLP Train Load Predictor
TMC Transport Management Centre
TransCAD GIS and strategic transportation and land use modelling software
Software suite containing a macroscopic traffic model, a signal optimiser, and
TRANSYT a simulation model for situations from single isolated road junctions to large
mixed signal-controlled and priority control traffic networks.
Rural traffic simulation model to investigate the effects of changes in either
TRARR
the road (e.g., overtaking lanes) or traffic characteristics on traffic operations.

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Travel zone Representation of an area within a model from which trips start/finish
TRB Transportation Research Board
TTS Travel Time Savings
TZP Travel Zone Projection
Walking or cycling to a specific destination, such as walking between their
Utilitarian trips home, place of work, place of education or other destinations including
recreational destinations. These trips could be undertaken by other modes
Volume to capacity ratio, v/c = 1.0 indicates the anticipated volume is equal to
V/C
the theoretical capacity
Vehicle actuated – traffic signal triggered by the presence of a vehicle as
VA
opposed to a fixed signal timing
Confirmation of model using a secondary data source not used in the model
Validation
calibration
VHT Vehicle Hours Travelled
Vissim Microscopic multi-modal traffic flow simulation software
Multi-modal software for macroscopic simulation and modelling of transport
Visum
networks and demand,
VISWALK Pedestrian simulation software.
VKT Vehicle-Kilometres Travelled
VOC Vehicle Operating Costs
VOT Value of Time
WSG Walking Space Guide
XCL Stretch cycle time in traffic signal phasing plan

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1 Introduction

1.1 Guideline Structure

These guidelines are organised by volume based on the objectives and requirements of models and
their application. The structure of the guidelines is as follows:

• Volume 0: Introduction

• Volume 1: Place Forecasting Guidelines (This Volume): A volume detailing land use
forecasting and its role in the modelling process. This Volume provides a guiding framework
for the consideration, development, and alteration of land use scenarios.

• Volume 2: Strategic Modelling Guidelines

• Volume 3: Operational Modelling Guidelines

• Volume 4: Active Transport Modelling Guidelines

• Volume 5: Emerging Modelling Techniques and Trends

• Volume 6: Guide to Practitioners

1.2 Purpose
Volume 1 Place Forecasting Guidelines aim to assist demand modelling, business case, and
economic practitioners in understanding the methodological differences between Place-Based
Land Market Supply Side Initiatives (PB) and Transport Infrastructure Induced Land Market
Demand Side Initiatives (TI) when conducting travel demand modelling of static and dynamic land
use scenarios.

This Volume enables an understanding of the key steps required for integrated land use and
transport project teams to structure and resource their appraisal frameworks effectively.

1.3 Out of Scope

Given the context-specific and bespoke nature of Place Forecasting, this Volume is not designed to
be overly prescriptive. Instead, it guides practitioners in identifying and considering the key tasks
that need to be undertaken.

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2 Overview
The Transport for NSW (TfNSW) guidance on Place Forecasting (this Volume) is a methodological
framework designed to assess the impacts of transport network investments on a region’s
population and employment projections. This methodological framework also discusses the
interaction between the transport network and place-based city shaping or precinct-scale land
market investments.

Various land use modelling approaches are available to forecast changes in population sizes and
demographic characteristics. Techniques include commercial simulation models (UrbanSim 2024),
agent-based demand and assignment models, and spatial computable general equilibrium (CGE)
models. This Volume focuses on a broad-based approach integrating land use and transport
projects within the context of TfNSW’s strategic transport modelling ecosystem.

This Volume introduces key concepts, including travel zone projections, the demographic and
economic characteristics of land use projections, static and dynamic land use in travel demand
modelling, growth redistribution under ‘closed city’ modelling assumption, and calibration of
updated demographics in travel demand modelling.

Importantly, this Volume delineates the modelling considerations between Place-Based Land
Market Supply Side Initiatives and Transport Infrastructure Induced Land Market Demand Side
Initiatives. While both types of initiatives aim to achieve strategic outcomes aligned with NSW
Government priorities and long-term organisational strategies, the primary differences lie in the
adopted appraisal framework.

This Volume presents the different travel demand modelling frameworks required for place-based
projects and transport infrastructure-led projects, including their implications for economic
appraisal. The two types of projects are summarised as follows:

• Place Base (PB) Land Market Supply Side Initiative Projects: These urban development or
precinct planning projects are typically driven by planning agencies (State and Local
Government) in response to strategic city shaping development directives. The travel
demand modelling task identifies the necessary transport investments needed to realise
the development scenario and maintain an appropriate level of service across the multi-
modal transport network.

• Transport Infrastructure (TI) Induced Land Market Demand Side Initiative Projects: These
transport infrastructure projects are designed to relieve current or anticipated transport
network constraints or support strategic transport planning objectives. The travel demand
modelling task illustrates changes in transport network accessibility that induce land
market demand and unlock land market capacity as a result of newly created transport
network capacity.

Figure 1 illustrates the nuanced differences between these two approaches, showing that PB-led
and TI-led projects start from independent legislative, regulatory, and strategic frameworks.
Regardless of whether an integrated land use and transport project begins as a “Land Use Policy”
project or a “Transport Infrastructure Policy” project, the analysis should deliver a similar outcome,
even if the analysis tools applied differ.

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Figure 1: Integrated urban land use and transport systems analysis for transport infrastructure projects (blue)
and place-based projects (red)

Divergence in modelling tasks presented in Figure 1 is summarised as:

• Place-Based: the PB project modelling approach focuses on understanding the transport

and urban infrastructure required to achieve the desired development yields, alongside the
resulting urban and transport economic benefits created.

• Transport Infrastructure: the TI project modelling approach focuses on understanding the

demand of residential and commercial developments associated with the TI project,
alongside the resulting urban and transport economic benefits.

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3 Land Use Context

This section provides an overview of key land use change inputs and analysis considerations in
travel demand modelling related to project-based changes in travel zone projections for both PB
and TI projects. This section begins with a background on modelling place-based precinct planning
(land market supply side) initiatives (PB) and transport infrastructure (land market demand side)
initiatives (TI), followed by a detailed presentation of individual methodological approaches.

3.1 Changing Demographic Projections in Place-Based

Travel Demand Modelling

3.1.1 What are Travel Zone Projections

In travel demand modelling, land use changes are primarily by the NSW State Government’s agreed
set of demographic projections prepared by the Department of Planning, Housing, and
Infrastructure (DPHI) (DPHI 2022), which are based on the Australian Bureau of Statistics (ABS)
census data for the base year. TfNSW produces the Travel Zone Projections (TZP) common planning
assumptions for population, dwellings, workforce, and employment, used for transport modelling.

The TZP data is used widely across government and the private sector for strategic planning and
policy work (TfNSW 2022) They encompass three key attributes (referring specifically to the TZP24
revision):

• Time Period: Annual projections from 2021 to 2031, five-year intervals from 2031 to 2066.

• Geography: 4,236 travel zones across NSW in Travel Zone 2021 (TZ21) geography.

• Variables: Over 60 variables, including population, dwellings, workforce, and employment.

TZP provides a long-term outlook on future growth distribution and form part of the NSW Common
Planning Assumptions. TZP aligns with the NSW Population Projections at the state and SA2 levels,
prepared by DPHI, and aligns with the NSW Employment Projections at the state level, prepared by
Victoria University (VUEP). These projections serve as the NSW Government’s agreed assumptions
for small area population, workforce and employment (NSW Treasury 2024).

While TZP offers a strategic, state-wide dataset, they represent projections at a specific point in
time. Travel zone level projections are indicative of a potential future scenario and should be used
as a starting point, supplemented by the latest available planning information. It is also important to
note that the TZP development process does not involve comprehensive analysis of individual sites
or precincts. Additionally, the projections are not based on specific assumptions about future
transport infrastructure but do account for known or planned land-use developments and strategic
plans.

The Travel Zone Projections are regularly updated (TfNSW 2024), with major updates occurring
every five years to realign with ABS Census data releases and geographies, and interim updates
every 2-3 years incorporating new datasets such as updated projections by DPE and technical
improvements. Figure 2 illustrates changes in population and employment by Travel Zone between
forecast years 2036 to 2056 within TZP22.

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Figure 2: TZP22 population change example (left), TZP22 employment change example (right)

Typically, demographic forecasts are treated as exogenous inputs in travel demand modelling.
However, it is well recognised that in project-specific travel demand modelling, there are critical
backward and forward linkages between the State’s demographic projections and the transport
network coded within the demand model. This is particularly evident when modelling the impacts of
land market supply side initiatives (e.g. precinct, subregional, and regional planning changes) on the
transport network and impacts of new transport initiatives (e.g. motorway, highway, and public
transport) on the base demographic projections.

This interaction between the travel demand model and changes in the demographic projections
cause the demand model to dynamically respond in several ways:

• Updating the trip production and attraction assumptions based on changes in

demographic character, such as home, job, and school locations.

• Rebalancing travel behaviour across the network, leading to changes in induced travel
demand (an increase in trips).

This dynamic response introduces significant complexity in determining the optimal project-based
approach to maximise both transport and land use benefits.

3.1.2 Closed City Modelling - Demographic Projection Redistribution

In the New South Wales context, all project-induced land use changes are modelled within a “closed
city” framework. This approach assumes that any changes in the demographic projections due to a
project are redistributed from other regions into the project study area, ensuring that the TZP
population and employment control totals across the state remain consistent.

The closed city modelling approach is driven primarily by its implications for Cost Benefit Analysis
(CBA) (AAI 2022). Altering the population or employment total within the models geographic extent
can significantly impact network travel metrics, including changes in vehicle kilometres travelled
(VKT) and vehicle hours travelled (VHT), and influence the required levels of urban infrastructure,
including hospitals, schools, and social services, compared to a Base and Reference Case.

Alternative “open city” models, where population and employment control totals can vary, are
currently under investigation by the Australian Transport Assessment and Planning (ATAP)
guidelines and will be covered in future guidance.

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ATAP’s most recent guidelines suggest that the adopted redistribution approach should consider
the following factors (ATAP 2022):

• Market Comparability: Whether the Base Case and Project Case locations for firms and
households represent broadly comparable markets.

• Regional Impacts: Whether the redistribution approach leads to net decreases in population
or employment in any regions or sub-regions compared to present-day levels.

• Accessibility Changes: Whether changes in location choices between the Base Case and
Project Case results in overall changes in accessibility (e.g., to employment or recreation)
across the region or within specific sub-regions.

• Constraints and Market Failures: Whether any constraints or market failures might limit or
prevent redistribution of households and firms to or from particular regions or sub-regions.

Each of these considerations must be addressed in both the place-based supply side analysis
(Section 4.1) and transport-induced demand side analysis (Section 4.2).

3.1.3 Open City Modelling – Adjusting the TZP Control Totals

A critical aspect of modelling both supply-side land use planning initiatives and transport-induced
land use change is the decision on whether to maintain regional population and employment control
totals. Adjusting the State’s population and employment control totals in response to a specific
project involves several considerations:

• Impact on Travel Metrics: Adding people to strategic transport models leads to aggregate
increases in VHT and VKT compared to the Base and Reference Case, complicating the
interpretation of results.

• Economic Implications: While increasing aggregate population and employment boosts

economic consumption and productivity, it also entails additional economic costs, such as
the need for more schools, health, and social infrastructure, all of which must be accounted
for in a project’s economic appraisal.

Quantifying potential increases in population and employment control totals due to a project
investment is a complex task. It may be best approached through spatial CGE modelling, which can
simulate the impact of project-induced changes on inward migration (ATAP 2021). This modelling
would demonstrate how additional growth might originate from outside the travel demand model’s
geographic extent; whether from state, interstate, or overseas. The origin of this additional growth
has significant implications for the CBA. For example, growth from within Australia and growth from
overseas might be treated differently, adding further challenges for open city modelling.

3.1.4 Modifying Demographic and Economic Profiles in Travel Demand

Modelling
When analysing changes to land markets in travel demand modelling, it may be necessary or
beneficial to adjust the demographic profile of travel zones within the project study area. The TZP
variables required to modify the population demographic profile and economic character for
transport models fall into two primary categories.

• Generator variables: These relate to the origin locations of travel such as the place of usual
residence (PUR).

• Attractor variables: These relate to the destination locations of travel such as, places of
work (PoW), educational institutions (PoL), and other destinations like shopping centres.

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Changes in Generator Variables - Population Demographic Profile

TfNSW uses the Population Synthesiser (RAND 2021), a model that leverages land use data, to
generate a synthetic population of ‘agents’ for input to the strategic travel models. These agents,
along with additional TZP inputs, are used in travel demand modelling. Table 1 presents the key data
inputs into the Population Synthesiser.

Table 1: TfNSW Population Synthesiser generator variable input requirements

Place of count Category Sub category Variable

Males 0 - 9
Males 10 - 19
Males 20 – 29
Males 30 - 39
Males 40 - 59
Males 60 - 79
Population in
Males ≥80
PUR Occupied Private Age-Sex
Females 0 - 9
Dwellings (POPD)
Females 10 - 19
Females 20 – 29
Females 30 - 39
Females 40 - 59
Females 60 - 79
Females ≥80
Full-time workers
In the Labour Force (iLF) Part-time workers
PUR POPD (>15)
Not in the Labour Force (NiLF) Unemployed
Not in Workforce
Children (≤15 years old)
Negative or Nil income
$1-$149
$150-$299
$300-399
POPD (<15) $400-499
POPD (15+) $500-649
PUR POPD (Note, this includes people $650-799
employed and not employed) $800-999
(Cited in $2016AUD) $1,000-$1,249
$1,250-$1,499
$1,500-$1,749
$1,750-$1,999
$2,000-$2,999
$3,000 or more
Primary School Student
Enrolled students Secondary School Student
PUR POPD
Not students Tertiary Institution Student
Not a Student
University – Full time
University – Part time
PUR POPD Students in each tertiary type
Technical – Full time
Technical – Part time
Couples with Children
Couples Only
Occupied Private
PUR Household Types Single Parent
Dwellings (OPD)
Single Person
Other Types

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Changes in Attractor Variables – Employment / Education Economic Character

The NSW, TZP employment by industry projections is calculated using the Victoria University’s
spatial CGE model. These employment forecasts are adjusted to align with population workforce
side of the demographic projections, and are then disaggregated to SA3s and then travel zones
(ABS 2013).

Table 2 outlines the key attractor variables, where updates to the industry employment mix can
significantly impact trip generation, trip distribution, and mode choice.

Table 2: TfNSW Sydney STM attractor variable data input requirements

Place of count Category Sub category Variable

Negative or Nil income
$1-$149
$150-$299
$300-399
Employment income $400-499
bands – created $500-649
Total outside the TZP22 $650-799
PoW
Employment model $800-999
(Weekly Earnings - $1,000-$1,249
Currently 2016 dollars) $1,250-$1,499
$1,500-$1,749
$1,750-$1,999
$2,000-$2,999
$3,000 or more
Accommodation and Food Services
Financial and Insurance Services
Rental, Hiring and Real Estate Services
Professional, Scientific and Technical Services
Total
PoW Service industries Administrative and Support Services
Employment
Education and Training
Health Care and Social Assistance
Arts and Recreation Services
Other Services
Retail Trade
Agriculture, Forestry and Fishing
Mining
Electricity, Gas, Water and Waste Services
Total
PoW Other industries Construction
Employment
Wholesale Trade
Transport, Postal and Warehousing
Information Media and Telecommunications
Manufacturing
Total
PoW Retail Retail Trade
Employment
Primary School Students
School students
PoI Students Secondary School Students
Tertiary students
Tertiary Institution Students

When to Apply Changes to Population Demographic Profile and Economic Character

For both PB and TI projects, where significant population and employment growth is forecasted
within a project study area, it is important to determine whether adjustments to the population
profile and economic character are necessary. These changes are required when a ‘transformative
change’ in the land markets is likely, rather than an intensification of existing uses. Transformative
changes occur when there is a discrete shift in the demographic profile of a travel zone, such as

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when an area transitions from industrial uses to residential mixed-use through urban
redevelopment (consider the Bays Project in Sydney (DHIP 2020) as an example). Changes such as
this require the Population Synthesiser to be run.

Another instance warranting changes to the population profile and economic character occurs when
the current variables in Table 1 and Table 2 do not align with the expected values in the TZP,
especially in areas undergoing urban renewal or greenfield expansion. Significant growth from a
low base may necessitate dynamic change in the population profile and economic character over
time. This is particularly relevant for travel demand modelling of project-induced population and
employment changes where significant shifts in land markets are anticipated compared to the
assumptions in the travel zone projections.

Examples of projects that result in transformative land use changes include:

• South West Rail Link: A new rail line extending from Glenfield into agricultural land,
anticipated to unlock new residential and mixed-use development at Edmondson Park and
Leppington, NSW (Wikipedia 2015).

• Carter Street Urban Renewal Precinct: A new urban renewal precinct delivering a mix of
housing, employment, and retail services on previously industrial and manufacturing land in
Auburn, NSW (DPIE 2020).

For both projects, relying solely on the demographic and economic profiles assumed in the travel
zone projections would not reflect the desired future character profiles for these precincts,
potentially leading to inaccurate travel behaviour predictions.

How to Apply Changes to Population Demographic Profile and Economic Character

Whilst the variables presented in Table 1 and Table 2 reflect the forecast population profile and
economic character for each travel zone, adjusting them for project study area travel zones requires
knowledge of the desired future character for each zone. This can be a complex analytical task. One
practical approach is to align the project study area population profile and economic character with
those of a comparable area that embodies the desired future characteristics.

3.2 Overview of Transport Infrastructure Induced Land

Market Demand Side Initiatives
Investing in large-scale transport infrastructure projects is traditionally the role of Local and State
Government transport agencies, with developer-driven upgrades being an exception. The impact of
these projects on the transport network is typically tested using travel demand and operational
models (Austroads 2020), with a focus on the analysing outputs, such as changes in VKT and VHT
(ATAP 2016) and changes in the transport economic metrics like travel time savings (TTS), vehicle
operating costs (VOC), and transport reliability (TfNSW 2024) .

However, it is widely recognised that transport projects can create ‘city shaping’ or land use impacts
and benefits (ATAP 2016) These impacts may result in changes in land market demand, inducing shifts
in population and employment due to enhanced accessibility and reduced generalised travel costs.
ATAP outlines several methods for modelling land market responses to transport investments,
including (ATAP 2016):

• Land Use Attractiveness Models: These models assess how transport improvements
increase the relative attractiveness of locations by enhancing accessibility. They are
typically calibrated on historical relationships between accessibility and willingness to pay
across different times and locations.

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• Land Use and Transport Interaction (LUTI) Models: An extension of land use attractiveness
models, LUTI models are integrated with transport models to forecast changes in land use
by linking land use and transport interactions. The transport component can be modelled
either endogenously or by an exogenous transport model.

• Dependent Development Frameworks: This framework is used to assess how new

developments that rely on transport investment should be treated in project appraisal. The
UK Department for Transport (DfT) suggests that when transport projects and housing
developments are closely linked, their impacts should be assessed as a combined project,
including benefits from additional housing services (DfT 2020).

• Spatial Computable General Equilibrium (CGE) Models: These models are computable
implementations of General Equilibrium theory, representing key economic actors (firms,
households, and government) and their transactions in terms of supply and demand for
goods, labour, capital, and land. Spatial CGE models introduce distinct spatial units that
trade with each other.

• GIS Based Methods: This approach translates traditional land use planning analysis of
potential changes into dwelling, population, and job numbers over time. It can be informed
by development feasibility and market take-up analysis, with resolution at the travel zone,
precinct, or lot level.

• Urban Simulation Models: These models simulate city functions and analyse city growth
through visual simulations. Examples include UrbanSim (UrbanSim 2024), LEAM (Land Use
Evolution and Impact Assessment Model) (leam 2024) and DELTA (David Simmonds 2006).
UrbanSim, for instance, models the interactions among households, businesses, and
developers within real-estate markets by considering the interplay between factors like
housing costs, accessibility, and neighbourhood amenities.

• Land Use Activity Based Models: Integrated with dynamic land use models like ILUTE
(GITHUB 2019), these activity-based microsimulation models form a framework of land use,
travel demand, and transport assignment models over time, focusing on long term location
choices for people, dwellings, jobs, and firms (JTLU 2015).

ATAP does not provide specific models for different contexts but provides a comprehensive
discussion of the strengths and weakness of each approach. A key requirement between all
approaches is that all forecast land use changes in response to a transport investment must be
directly linked to the project’s demand modelling of induced accessibility, or changes in generalised
travel costs. The traditional nexus between changes in generalised cost and land market demand is
illustrated in Figure 3. Transport infrastructure investment reduces travel time (or generalised cost
of travel) leading to increased land market demand, reflected in changes in willingness to pay.

Figure 3: Land market bid-rent curve. Source: based on concepts developed by (Alonso 1966)

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Alonso suggested that land market prices reflect the interaction between buyers and sellers, as
travel costs are traded-off against land rents in a bid-rent curve (Alonso 1966). Figure 3 illustrates
how a reduction in generalised cost translates into changes in land markets within a project
catchment. In the bid-rent curve model, as population density increases around employment
centres, two key effects occur:

• Consumer Substitution: Households substitute land for reduced travel costs.

• Factor Substitution: Developers respond to higher land prices by using less land per
housing unit.

Studies (LUTI Consulting 2016) generally agree that changes in generalised travel costs drive a land
market demand response. The magnitude of this response can vary significantly depending on
factors related to the project and study design. Factors influencing the land market response
include locational attributes, transport system characteristics, socio-economic conditions, and the
level of land use integration in the project.

ATAP discusses various ‘integrated’ LUTI models used in Australia. For the purposes of this
guideline, the discussion of LUTI models focuses on “linked static equilibrium models”, which align
to the Lowry modelling approach, whereby:

“… In static equilibrium LUTI models, the land use model includes functions
representing how accessibility affects land use, and the land use and transport
models are run iteratively to an equilibrium with land use forecasts input to the
transport model and accessibility (travel cost) forecasts input to the land use model.
Static equilibrium models can be implemented by combining separate land use and
transport models through an iterative process...”

The development of LUTI modelling frameworks requires the specification of accessibility,

population, and employment interaction models.

“…static land use models, regression analysis looking at the correlation between
planning (demographic) data (residential intensity, employment intensity) and
accessibility (as derived from the transport model) draw upon the information that
would be required for conventional four step transport modelling.”

ATAP guidance does not define the specific regression forms or parameters, it suggests that
estimation of accessibility on population and employment should consider a range of demographic,
economic, and locational attributes, accounting for potential endogeneity between urban
development scale and transport infrastructure provision.

Several papers provide guidance on developing static land use models based on the original Lowry
and Alonso models, offering comprehensive reviews of land use and transport interaction modelling.
The approach suggested by ATAP discussed in this guideline aligns with the Garin-Lowry modelling
framework (Joseph Berechman 1987), where exogenous TZP data (population and employment) and
generalised travel costs from a travel demand model are used to predict changes in travel zone
population and employment demand. This process is iterative and reallocates travel zone population
and employment densities until the economic criteria converge to an optimised state.

The main limitation of the Garin-Lowry modelling approach is the absence of land market supply-
side constraints and equilibrating prices. However, since this modelling approach flexes population
and employment growth rates in response to specific projects, this limitation has minimal impact on
its predictive application. Top-down modelling of a transport project’s impact growth distribution
can be supplemented by bottom-up analysis of development opportunities and constraints.

While dynamic activity-based land use models like UrbanSim could be applied in NSW, they require
extensive knowledge of travel zone-based information, built-form supply, and real-estate market

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considerations, such as price, development feasibility, land use zones, and floor space ratio controls.
These models are more suited to discrete precinct-based simulations rather than regional analysis.

3.2.1 Impact of Working from Home on the Land Market Demand for
Accessibility
An interesting development in the analysis of land market demand in response to changes in
accessibility is the shift towards remote work, particularly since the onset of the COVID-19 in 2020.
The TfNSW Household Travel Survey is a valuable resource for understanding personal travel
patterns within the Sydney Greater Metropolitan Area (GMA) and provides insights into the reasons
behind people’s travel behaviours (TfNSW 2023).

Data from the TfNSW Household Travel Survey, specifically focusing on commuting behaviours in
two of the six regions across the Sydney GMA, is presented in Table 3. This data is available from
the TfNSW Household Travel Survey online portal. The selected data covers the Sydney Significant
Urbanised Area (SUA) which includes the eastern and central regions of Sydney (there was limited
data available for the Western Parkland City at the time of review).

Table 3 presents the percentage of total distance travelled by commuting purpose and the average
time spent per commuting trip (TfNSW 2021). The data indicates a significant shift in commuting
patterns due to the rise of remote work, including:

• Reduction in Daily Commuting Distance: There has been an approximate 30% reduction the
total distance travelled daily for commuting purposes.

• Reduction in Commute Time per Trip: On average, there has been a 5-minute reduction in
the time spent per commuting trip, equating to a 16% decrease in average commuting time.
Table 3: Travel patterns of the residents of selected Local Government Areas on an average weekday, pre-
COVID (FY 2019/20) and post-COVID (2022/23)

Average Average
Average Average % Change % Change
Commute Commute
6 Cities Commute Commute in Average in Ave.
LGA Distance Distance
Region Time (mins) Time (mins) Commute Commute
Split % Split %
(FY 19/20) (FY 22/23) Dist. Split Time
(FY19/20) (FY22/23)
Blacktown 37.80% 40.9 23.30% 30.9 -38% -24%
Central
Cumberland 31.00% 40.4 20% 29.9 -35% -26%
River
Georges River 30% 35.5 21.00% 31.2 -30% -12%
City
Parramatta 37.70% 38.9 30.00% 31.3 -20% -20%
The Hills Shire 28.00% 35.7 21.70% 32.4 -23% -9%
Bayside 28.70% 35.2 13.60% 30.5 -53% -13%
Canada Bay 21.90% 37.3 28.90% 33.6 32% -10%
Hornsby 34.90% 39.3 24.10% 33.1 -31% -16%
Inner West 28.30% 34.7 19.00% 29.1 -33% -16%
Eastern
Ku-ring-gai 22.00% 40.4 12.30% 31.5 -44% -22%
Harbour
Northern Beaches 26.80% 38 16.80% 28.5 -37% -25%
City
Randwick 27.10% 33.8 31.60% 31.1 17% -8%
Sutherland Shire 28.10% 41.1 22.60% 38.1 -20% -7%
Sydney 37.90% 28.9 13.70% 28.2 -64% -2%
Willoughby 25.40% 33.2 11.20% 25.3 -56% -24%

While these trends highlight the immediate impact of increased remote work on commuting
patterns, several factors (Propella 2024) suggest that as the percentage of workweek spent
working from home gradually reverts towards pre-COVID levels (though unlikely to ever fully return
to pre-COVID levels), some of the reductions in commuting travel time and distance may be
mitigated.

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4 Place-Based Modelling Methodology

This section outlines the framework for modelling both Place-Based Land Market Supply Side
Initiatives and Transport Infrastructure Induced Land Market Demand Side Initiatives. It also
explores the methodological differences between these two approaches, providing a discussion of
how each type of initiative is assessed within transport and land use models.

4.1 Modelling framework for Place-Based Land Market

Supply Side Initiatives
Modelling travel demand for land market supply-side initiatives necessitates a distinct approach
compared to transport infrastructure and land market demand-side initiatives. The primary
difference lies in the fact that place-based land market supply side initiatives predominantly involve
non-transport-related investments. Therefore, the Base Case and Project Case forecasts are
calibrated based on the absence or presence of these non-transport initiatives. The purpose of the
travel demand modelling, therefore, is to assess the effects of land use changes on the transport
network and to determine if transport interventions are necessary, or at least to quantify the
economic impact of these changes on both existing and future transport users.

The travel demand model compares the impacts of the Base Case and Project Case land use
scenarios and analyse their effects on the transport network. This analysis guides decisions on
potential additional investments in the transport network to accommodate the growth rate in the
Project Case, ensuring a ‘reasonable level of service’ is maintained.

The steps for preparing a set of Base Case and Project Case land use forecast scenarios are
outlined below. Figure 4 illustrates the proposed framework for modelling transport-related
impacts of changes in land use forecasts for supply-side initiatives. The standard input for a travel
demand model is the state’s Travel Zone Projections, which represent the NSW Government’s
current and future growth expectations across the Metropolitan Region, covering the spatial extent
of the travel demand model applied to the project.

When modelling PB initiatives, the key analysis focuses on testing the impact of project-based
growth initiatives on the transport network against a scenario where these initiatives are not
implemented. This distinction is critical for bottom-up modelling of the impact of new urban
development schemes, helping to understand local, regional, and metropolitan-level impacts on the
transport network using travel demand modelling methods. The methodology for modelling PB land
market supply side initiatives includes the following steps:

• Step 1: Preparation of the Base Case Land Use Scenario: Prepare a bottom-up Base Case
land use scenario within the local study area, reflecting the land market if the urban
development project is not delivered.

• Step 2: Redistribution of Growth for the Base Case Land Use Scenario: Where necessary,
redistribute the Base Case growth difference within the geographic extent of the demand
model by varying growth external to the project study area to maintain population and
employment control totals (assuming a closed city model).

• Step 3: Preparation of Project Case Land Use Scenario: Prepare a Project Case land use
scenario that represents the desired future development with the place-based initiatives in
place.

• Step 4: Change in Population Demographic Profile and Employment Economic Character:

If required, update the demographic and economic profiles of the study area travel zones in
the Project Case to reflect the vision for the desired future development scenario.

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• Step 5: Redistribution of Growth for the Project Case Land Use Scenario: Redistribute the
Project Case increase within the geographic extent of the demand model by reducing
growth external to the project study area to maintain population and employment control
totals (assuming a closed city model).

• Step 6: Transport Infrastructure Required to Realise Forecast Growth: Run the Base Case
and Project Case land use forecasts through the travel demand model and assess the
transport network performance within the project study area. Determine whether any
transport interventions are necessary to accommodate the additional Project Case growth
and mitigate significant transport network issues.

In certain cases, neither the Base Case nor the Project Case land use scenarios will align with the
State’s TZP when more contemporary planning information is available relative to the development
of TZP. Therefore, to test the Base and Project Case land use scenarios, it may be necessary to
develop a new set of redistributed TZPs. In most instances, the State’s travel zones projections are
suitable for at least either the Base Case or Project Case, requiring only one of the two redistributed
scenarios to be developed.

Additionally, the analysis of the Project Case land use scenarios based on forecasted population
and employment, can inform the assessment of impact on other urban civil infrastructure, such as:

• Water: Water supply, storm water, and wastewater systems.

• Telecommunications: Phone and broadband networks.

• Power: Distribution network and sub-stations.

These outputs can be valuable inputs for broader dynamic systems modelling of PB project
initiatives.

4.1.1 Step 1: Preparation of the Base Case Land Use Scenario

The development of the Base Case land use scenario should reflect anticipated future growth
within the project study area, assuming that ancillary infrastructure investments are not
implemented. Specifying the Base Case is crucial for establishing land use forecasts that
reasonably reflect the spatial distribution of growth within the extent of the travel demand model
under a ‘no investment’ scenario. The Base Case must present a ‘natural’ level of land use change
without factoring in any future non-committed urban infrastructure improvements.

The starting point for the Base Case land use forecast should be the latest travel zone projections
from the latest NSW Government common planning assumptions. A review of these projections
should be conducted within the project area of influence, with benchmarking against other
locations within the TZP region to determine if the growth rates within the project area can be
deemed ‘natural’.

Analysis and benchmarking should be performed at both the travel zone and precinct levels to
provide various insights into the assumed growth rates in the travel zone projections. Growth rates,
whether high or low, should be thoroughly investigated, potentially though workshops with the
broader stakeholder group. Any necessary adjustments to the TZP population and employment
projections should ideally occur within SA2s (or possibly SA3s) to maintain consistency with the
State’s demographic assumptions, which are prepared at the SA2 level.

In some cases, additional growth may need to be redistributed into or out of the project study area.
These adjustments should be agreed upon by the broader stakeholder group. Ultimately,
adjustments to the travel zone projections in preparing the Base Case land use forecasts should aim
to address critical issues rather than contradicting the State Government’s view on growth.

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Analysis and rationalisation of top-down Base Case land use forecasts should consider:

• Existing planning controls and latent unrealised capacity.

• Known infrastructure or amenity constraints limiting future growth.

• Significant anticipated land release and growth areas, including timing and yield.

• Major development applications.

• Significant approved or funded infrastructure projects.

• Any other factors driving land use change or take-up independent of project intervention.

• Market demand and take-up.

The Base Case must not include the development under investigation. While there are various
methods for forecasting a place-based Base Case land use scenario, these should be developed by
individual project teams and tested to ensure they represent ‘natural levels’ of land use change.

4.1.2 Step 2: Redistribution of Growth for the Base Case Land Use Scenario
In New South Wales, current practice in transport project business cases involves maintaining
population and employment control totals in each forecast year within land use forecasts, following
a ‘closed city’ approach. This approach assumes that the spatial distribution of population and
employment can change in response to transport investment, but the totals remain constant.

The following considerations is likely to enhance the reasonableness of the redistribution effects
and the impacts on the economic appraisal.

• The redistribution should ensure that no travel zone ends up with fewer residents or jobs
compared to current day (base year) levels and the changing locations of residents and jobs
are broadly considered comparable markets.

• This could involve redistributing population within income bands and employment within
industry categories or limiting the redistribution effects to a specified geographic extent.

• By maintaining population and employment control totals within the travel demand model’s
extent, the model accounts for all positive and negative impacts of the land use changes,
ensuring the associated economic impacts are net incremental.

4.1.3 Step 3: Preparation of Project Case Land Use Scenario

The Project Case land use scenario represents the potential future state of development within the
study area, reflecting a desired future land use outcome for a precinct or region. Generally, this
scenario results in more intensive land use than the Base Case.

A Project Case scenario seeks to understand the maximum capacity for a precinct, considering the
benefits of a desired future land use outcome and any accompanying infrastructure. While the
Project Case leverages uplift opportunities, it should also ensure compatibility with existing
character and consider the impact of future built-form, constrained land uses, road hierarchy, and
proximity to transport.

The Project Case land use scenario should prioritise sites identified as potential opportunities, free
from constraints posed by built and natural elements. Land use scenarios and applications should
be guided by urban design considerations and best practice planning principles. The take-up of
population and employment for the Project Case scenario should consider factors such as:

• Large landholdings vs. site amalgamation.

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• Relative amenity, influencing comparison to other take-up comparators.

• The percentage of capacity that may be achieved.

• Historic employment growth (jobs per annum).

• Total employment numbers, considering the potential scale of the precinct as a centre.

• Jobs as a percentage of the local population or workforce.

Land use scenarios should be developed through iterative stakeholder engagement to ensure the
proposed land uses align with the desired future vision and character of the study area and are
considered broadly implementable and supportable by government agencies.

4.1.4 Step 4: Change in Population Demographic Profile and Employment

Economic Character
When considering transformative change in a given location, the future nature of the demographic
and economic character should be modelled and, if necessary, updated in the study area forecasts.
For example, greenfield locations redeveloped into urban areas experience significant change in
economic character (e.g., rural uses transitioning to higher-order retail and commercial precincts). A
useful approach is to benchmark against the future demographic and employment against those of
a comparable location.

4.1.5 Step 5: Redistribution of Growth for the Project Case Land Use Scenario
As with Step 2, the Project Case requires a growth redistribution to maintain population and
employment control totals within the travel demand model’s extent. The key difference is that in the
Base Case, growth is typically increased outside the project study area to account for suppressed
growth within it, whereas in the Project Case, the opposite occurs. A Project Case redistribution
usually reduces growth outside the project study area to account for increased growth within it.

However, if redistributions are conducted within subcategories of population or employment,

considering demographic and economic character changes, the above statement regarding location
of growth in the Base and Project Case may not hold true. For example, if a study area is
characterised by agricultural workers but is expected to change its economic character in the
Project Case to reflect industries typical of more urbanised locations, an outward redistribution of
agricultural workers and inward redistribution of other industry types would be necessary.

4.1.6 Step 6: Transport Infrastructure Required to Realise Forecasted Growth

The final step in preparing place-based land use forecasts is to run the Base Case and Project Case
land use forecasts through the travel demand model. The outputs should be analysed to determine
whether the land use changes can be accommodated with reasonable levels of transport service. If
not, suitable transport solutions should be identified to mitigate any material negative impacts on
the transport network. Depending on the project’s scale and the demand modelling framework
used, the following checks can help identify the location and scale of the impacts on the transport
network and suggest targeted solutions:

• Multi modal network link volume to capacity (V-to-C) impacts.

• Road network intersection delay and level of service (LoS) impacts.

• Origin zone changes in generalised cost of travel by mode.

• Impacts on VKT and VHT.

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Figure 4: Travel demand modelling for place-based land market supply side initiatives

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4.2 Transport Infrastructure Induced Land Market Demand

Side Initiatives
Investments in transport infrastructure that reduce generalised travel costs, especially to
employment centres, can trigger shifts in land market demand for residential and commercial
development. The ATAP land use benefit guidelines emphasise several critical aspects of land use
forecasting that must be addressed before integrating land use changes into the economic
appraisal of transport projects (ATAP 2022). These aspects include:

• Defining the Spatial Area of Assessment: The area of assessment should align with the
travel demand model extent.

• Specifying the Base Case: This typically involves adopting the State’s travel zone
projections. However, a review is necessary to ensure that these projections have not pre-
emptively incorporated future transport investment.

• Determining the Change in Land Use in the Project Case:

o Dual causality: As transport infrastructure is often developed in denser areas where

demand is highest, any assessment of land market demand response must account
for bidirectional relationships between accessibility and density.

o Attribution: Ensure that any forecasted land market demand response is directly
attributed to the transport project.

o Time Dimension: The approach must consider the timing of land use changes and
their interaction with each transport modelling year.

These considerations must be systematically addressed in methodologies modelling transport

infrastructure-induced land market demand side initiatives. The following points outline the key
differences between demand side initiatives and place-based supply-side initiatives:

• The project study area is typically defined by a combination of the extents of accessibility
changes (generalised cost) introduced by the project and an analysis of both new and
existing users of the proposed infrastructure.

• The Base Case for demand-side initiatives generally involves adopting government-
prepared travel zone projections as the Base Case land use scenario. TZP projections are
not based on specific or explicit future new transport infrastructure assumptions, but do
consider known land-use developments underway or planned, and strategic plans, making
them an ideal foundation for transport-induced land use changes.

The proposed methodology for modelling transport infrastructure-induced land market demand
initiatives, as illustrated in Figure 5, aligns with ATAP’s “Linked Static Equilibrium Approach” and
includes the following steps (ATAP 2016):

• Step 1: Model the Project Area of Influence: Delineate a land use response study area to
estimate changes in land market demand.

• Step 2: Review the Travel Zone Projections: Assess the suitability of the travel zone
projections within the land use response study area for the Base Case.

• Step 3: Estimate Population and Employment Demand Response: Determine the demand
response in each travel zone within the study area for the Project Case.

• Step 4: Update the Demographic Forecasts: If necessary, adjust the demographic and
economic profiles of study area travel zones to reflect the desired future development
scenario.

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• Step 5: Redistribute Growth: Maintain population and employment control totals within the
geographic extent of the travel demand model (assuming a closed city model).

• Step 6: Calibrate the Demographic Forecasts: Using the travel demand model to adjust
Project Case forecasts and mitigate significant network issues caused by land use changes.

4.2.1 Step 1: Model the Project Area of Influence

Defining the geographic extent of the Project Case land use response is crucial for understanding
the spatial distribution and intensity of the project’s impact. This step provides evidence of the link
between transport investment and land use change, enabling the estimation of secondary transport
user benefits, wider economic benefits, and urban development benefits for inclusion in business
cases.

There are several approaches to delineating a land use response study area:

• Proximity-Based Assessment: Assume the study area includes travel zones within a
specific distance from the transport infrastructure investment, for example pedestrian
walking catchments around new rail stations.

• Transport User Benefits and Accessibility Changes Assessment: Identify travel zones
benefiting the most from the infrastructure.

• Select Links Analysis: Determine the spatial distribution of users of the transport
investment by conducting a preliminary select link analysis.

Conducting this analysis helps identify the spatial distribution and usage intensity of the transport
investment, which is vital for attributing land use changes to the project and including project-
induced land use benefits in the business case. It also prevents forecasting land use changes in
areas not benefiting from the transport investment, avoiding unnecessary transport network
constraints and associated disbenefits.

4.2.2 Step 2: Review the Travel Zone Projections

In many cases, the existing travel zone projections will serve as a suitable Base Case for travel
demand modelling and economic appraisal of land market demand-side initiatives. As stated above,
it’s important to reiterate that TZP projections are not based on specific or explicit future new
transport infrastructure assumptions, but do consider known land-use developments underway or
planned, and strategic plans, making them an ideal foundation for transport-induced land use
changes. However, it is crucial to critically assess the projections within the land use response study
area to ensure they reflect a ‘no investment’ scenario and represent a ‘natural’ rate of growth.

This review process may involve:

• Calculating Average Annual Changes: Assess the average annual growth rate in population
and employment within the study area.

• Benchmarking: Compare these growth rates against those in other regions or across the
entire travel demand area.

• Identifying Potential Discrepancies: Determine if the State’s travel zone projections are
outdated or too low, which might occur if recent interventions or investments have not been
accounted for.

If the review reveals a need for adjustments to the travel zone projections within the study area, it
will be necessary to redistribute growth accordingly to maintain overall population and employment
control totals.

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4.2.3 Step 3: Estimate Population and Employment Demand Response

The third step in modelling transport infrastructure induced land market demand side initiatives
involves estimating the population and employment demand response to the changes in
accessibility created by the project within the land use response study area boundary defined in
Step 1. These changes can be assessed at the population and employment level, or further
disaggregated by categories such as by household type or industry sector. If the demand response
for these subclasses is not estimated in this step, it can be done in the next step when re-
characterising the study area travel zones.

The level of detail applied in modelling the land use response should be determined by the
practitioner, taking into account the impact that character changes in the study area may have on
travel demand and economic appraisal.

As discussed in Section 3.2, there are several approaches for estimating the land use response to a
transport intervention, including:

• Land Use Attractiveness Models

• Land Use and Transport Interaction (LUTI) Models

• Dependent Development Frameworks

• Spatial Computable General Equilibrium (CGE) Models

• GIS-Based Methods

• Urban Simulation Models.

Each approach has its strengths and weaknesses. However, land use attractiveness model or LUTI
models are generally preferred due to their reliance on outputs from a travel demand model and
their sensitivity to changes in generalised travel costs. For example, while GIS-based methods can
apply theoretical planning principles to estimate land use changes near a new rail station, they may
not effectively model nuanced differences in scheme options such as train service frequencies.

Land use attractiveness and LUTI models both use statistical methods to predict changes in travel
zone population and employment in response to a transport investment. These models can be
applied to the study area, pivoting from a set of Base Case land use forecasts, to estimate the
change in demand for residents and businesses to locate in the project’s benefitting area.

An important aspect of estimating these statistical models is ensuring the relationship between
accessibility and population and employment (by industry) density is accurately measured while
controlling for reverse causation or simultaneity bias (ATAP 2022). Simultaneity bias can occur if
higher density locations attract more transport infrastructure investment, leading to a biased
estimate for the accessibility metric. To control for this bias, a two-stage least squares estimator
can be used, provided suitable instruments are identified and applied. Alternatively, the
accessibility measure can be defined to account for proximity differences between locations
without directly measuring differences in transport investment.

The most commonly used accessibility metric in land use attractiveness and LUTI models is
Effective Job Density (EJD). This metric is typically chosen because residents value access to
employment locations for reasons such as shopping, education, entertainment, and work, while
businesses value access to other businesses due to agglomeration externalities.

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4.2.4 Step 4: Update the Demographic Forecasts

As stated in the section on preparing Project Case forecasts for place-based initiatives, when
anticipating transformative changes in a specific location, it is crucial to model the future
demographic and economic characteristics and update the study area forecasts.

This is especially important for projects expected to bring about significant land use change.
However, it is essential to consider the sensitivity of the travel demand model(s) to travel zone
characteristics changes. One effective approach to understand the future demographic and
employment profiles is to benchmark them against the characteristics of a comparable location.

4.2.5 Step 5: Redistribute Growth

As noted in the place-based analysis, certain considerations can enhance the reasonableness of
redistribution effects and their impact on economic appraisals. Redistribution should be carried out
in a way that ensures no travel zone ends up with fewer residents or jobs compared to current
levels. Additionally, the new locations for residents and jobs should be broadly comparable markets.
This may involve redistributing population within specific household types or geographic areas and
redistributing employment within industry categories.

4.2.6 Step 6: Calibrate the Demographic Forecasts

The final step in the modelling process outlined in Figure 5 addresses the issue that while Step 2
estimates the land market demand response to changes in accessibility, it does not account for
induced transport demand and the marginal impacts of additional trips resulting from land use
changes within the study area. These factors may erode some of the project benefits, and in some
cases, even lead to disbenefits in certain locations.

For example, negative impacts on the transport network could manifest as increased traffic volumes
on local roads or at key intersections that are unable to accommodate additional land market
growth without further investments beyond those already committed and funded in the travel
demand modelling assumptions.

Calibration testing of the Project Case demographic projections is an iterative process. With each
iteration, a series of analyses and checks are performed using select outputs from the travel
demand model(s). These tests and checks may include:

• Effective Job Density changes: Comparing EJD ratios between scenarios with and without
land use change to identify any travel zones within the study area that experience reduced
accessibility due to land use changes, resulting in significant increases in average
generalised cost.

• Travel time savings by travel zone: Calculating travel time savings benefits at the origin
zone level for the project, with and without land use changes, to identify travel zones that
experience disbenefits due to these changes.

• Link volumes and capacities: Comparing AM and PM peak volume-to-capacity ratios in the
study area with and without land use changes to identify links impacted by these changes.

• Intersection levels of service: Reviewing the intersection level of service changes to

determine whether land use changes are materially affecting intersection performance.

This final step provides insights into residual network capacity to support the Project Case
demographic projections after considering induced demand and land use changes. It also highlights
where local transport network constraints might inhibit forecasted land market growth, the severity
of constraints, and adjustments needed to the Project Case demographic projections for mitigation.

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Figure 5: Travel demand modelling for transport infrastructure induced land market demand side initiatives

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5 Application of Supply and Demand Side

Modelling in Economic Analysis
The ATAP guidance on estimating land use benefits in a transport appraisal highlights several key
considerations that must be addressed to incorporate dynamic land use benefits into a Cost Benefit
Analysis (CBA) (ATAP 2022). The considerations include:

• Double counting of benefits: Higher value land use benefits associated with a transport
project must avoid monetising accessibility impacts within the benefitting land markets, as
these are already accounted for in the estimation of conventional transport user benefits.

• Dependency and Conditionality: Land use benefits should only be included in a transport
project CBA if the land-use change is directly attributable to the transport investment.
Specifically:

o Dependency: This refers to the need for transport infrastructure proposals to

establish that the change in land use (i.e., any land use impacts) is directly
dependent on implementing the proposed infrastructure investment.

o Conditionality: This relates to the supporting conditions and activities necessary for
the expected land use impacts to materialise, ensuring that the costs and delivery of
these conditions are included in the economic appraisal and business case.

Careful consideration of these factors is essential to avoid overstating benefits, particularly in cases
where land use forecasts are determined exogenously from the travel demand model (Place-Based
Land Market Supply Side Initiatives).

The economic appraisal of the project-based land use change on a CBA can be organised into three
distinct groups; Second Round Transport Benefits, Urban Economic Benefits, and Wider Economic
Benefits. The application methods of each of these economic benefits are detailed in other TfNSW
guidelines relevant to economic appraisals.

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