There is a lot of talk about the streetcar increasing property values. The following information attempts to shed light on this issue. Answers have been gleaned from the sources indicated below.
This article will be updated periodically as we become aware of additional information and the series will be available on the website under the tab “Special Topics” – Sense or Nonsense?
Does rail increase property values?
Generally, streetcars and light rail increase property values for 1/4 to 1/2 mile around stops. The greatest beneficiaries are residential properties and properties that are rezoned to higher use (for example from “light industrial” to “multi-story office”). The extent of increase is dependent on many extraneous factors as well. Likewise, because rail is just one of the factors that affect property values, other areas of a city may see greater appreciation than those served by rail.The extent of increase is dependent on many extraneous factors as well. Likewise, because rail is just one of the factors that affect property values, other areas of a city may see greater appreciation than those served by rail. There is some evidence that the extent of value appreciation is tied to savings from reduction in transit time of the rail mode compared with alternative modes. Rail typically decreases property values along the right-of-way between stops, but to a small extent. Streetcars may have stops sufficiently close together so that every property is located near a stop.
1. System(s) studied: Streetcars in Tampa, Seattle and Portland
Summary of findings: Vacant and underdeveloped land just beyond walking distance to the city center offers the most potential for appreciation. However, much depends on local conditions. The increase in average property values along the Tampa streetcar, although large, was less than increases in the county as a whole. A large component of property appreciation is the effect of rezoning to higher use. In the case of Seattle and Portland increases in value were affected by major development projects in each city. In Portland this included large infrastructure investments including streets, sewers and utilities, along with a streetcar, and rezoning of an abandoned rail yard. In Seattle it was affected by the rezoning of six blocks of light industrial properties to multi-story office and the commitment of Amazon to build eleven office buildings on the site.
Institution: Center for Transit Oriented Development, Reconnecting America
Title: “Value Capture and Tax-Increment Financing Options for Streetcar Construction”
Authors: Not given, Date: circa 2009
Light Rail Studies:
Listed in chronological order of publication -newest studies first
2. System(s) studied: Hudson – Bergen light rail (New Jersey)
Summary of findings: This was a longitudinal study looking at resale values over a seventeen-year period. Properties near stations had high property value appreciation. Properties along the line away from stations experienced lower than average appreciation.
Institution: Transportation Research Board
Contact: Transportation Research Board, 500 Fifth Street NW, Washington, DC 20001
Title: “The Impact of Hudson-Bergen Light Rail on Residential Property Values”
Authors: Kyeongsu Kim and Michael L. Lahr, Date: 2011
3. System(s) studied: River Line (rail using DMU’s in New Jersey)
Summary of findings: Line is highly successful with ridership near capacity. Nevertheless the impact on property values is neutral to slightly negative with residences in low-income census tracks near stations appreciating while more distant properties showing no or negative changes.
Institution: University of California
Title: “Evaluating the Economic Impacts of Light Rail by Measuring Home Appreciation: A First Look at New Jersey’s River Line”
Authors: Daniel G. Chapman, Nicholas K. Tulach, Kyeongsu Kim, Date: May 25, 2011
4. System(s) studied: Charlotte light rail
Summary of findings: Study looked at neighborhoods around light rail stops rather than just areas close to stops. Light rail resulted in neighborhood value increases for up to a mile from stops. There was no impact on commercial properties.
Institution: University of North Carolina-Charlotte
Title: “Estimating Value of a New Transit Option”
Authors: Stephen B. Billings, Date: March 15, 2011
5. System(s) studied: Minneapolis Hiawatha Line (light rail)
Summary of findings: Residential, both single and multi-family, near stations on the west side of the line saw significant increase in property values after the 2004 opening. The east side of the line is comprised largely of industrial properties, which saw no increase in value.
Institution: University Of Minnesota, Center for Transportation Studies
Title: “The Hiawatha Line: Impacts on Land Use and Residential Housing Value”
Authors: Edward G. Goetz, Kate Ko, Aaron Hagar, Hoang Ton, Jeff Matson, Date: Feb. 2010
6. System(s) studied: Sacramento Light Rail
Summary of findings: No relationship between property values and proximity to a light rail station or line.
Institution: Bay Area Economics
Contact: Taiwo Jaiyeoba, (916) 557-4536, Alexander Quinn (530) 750-2195
Title: “Sacramento RT Economic Impacts of Light Rail”
Authors: Bay Area Economics, Date: September 8, 2005
7. System(s) studied: Portland Light Rail
Summary of findings: “….there have been some positive effects of rail on single-family property values.”
Institution: Center for Urban Studies, Portland State University
Contact: (503) 725-4020
Title: “Effects of Light Rail Transit in Portland, Implications for Transit Oriented Development Design Concepts”
Authors: Kenneth J Dueker (email@example.com), Martha J. Blanco (firstname.lastname@example.org), Date: 1998
8. System(s) studied: Meta-study of earlier studies of 7 rail systems including BART (San Francisco, heavy rail), Metrorail (Miami-Dade County, heavy rail), PATCO (New Jersey, heavy rail), SEPTA (Philadelphia; commuter rail), MAX light rail (Portland), MARTA (Atlanta, heavy rail), Spadina Ave. line (Toronto, streetcar); plus one narrowly focused study of five systems in Northern California
Summary of findings: Rail systems increase property values. A residence will most likely increase in value if it is in a lower to middle income, stable neighborhood, and within 1/4 to 1/2 mile of a station but not adjacent to a station. The more extensive the rail system, the larger the increase in property values. The amount of increase in property values is closely tied to the time savings of rail versus other transportation alternatives.
Institution: Booze Allen Hamilton Inc.
Contact: Roderick B. Diaz
Title: Conference Proceedings Paper; American Public Transit Association Rapid Transit Conference
Authors: Roderick B. Diaz, Date: May 1999
Contributor: Mark McDowell