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The IEEE 802.11p, 1609.3, and 1609.4 WAVE standards are designed to facilitate intervehicle communication and ultimately improve traffic safety. Multiple safety applications and control algorithms have been proposed to use 802.11p Dedicated Short-Range Communication (DSRC) radios and message structures. An urban environment provides many challenges for vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication. These include multiple propagation paths and many occlusions, particularly in areas where V2V messages would be most useful such as blind spots, buildings, and other obstructions. The dense urban environments and high concentration of vehicles make it difficult to predict how reliable this communication will be. The Ohio State University's Vehicle and Traffic Simulator (VaTSim) is designed as a microsimulator of traffic. This paper describes the incorporation of V2V communication into VaTSim using Network Simulator 3 (NS3) and physical layer modeling to determine how different road layouts and building configurations will affect 802.11p communication. This paper explains the theory used to define the simulated line-of-sight (LOS) propagation, non-LOS (NLOS) propagation calculations, channel switching congestion, and the experiments performed to validate the models and the simulation.