“Property values of residential and commercial buildings increase dramatically when located close to transit, according to a joint study from the American Public Transportation Association (APTA) and the National Association of Realtors (NAR),” according to an article by Chris Teale.
“[t]he associations found that residential properties within a half-mile of public transit options (heavy rail, light rail, commuter rail and bus rapid transit) had a 4%-24% higher median sale price between 2012 and 2016.” Similarly located commercial properties also gained value during the same time period
A new joint study between the NAR and APTA reveal that property values are considerably better when near public transportation with high frequency service.
According to a new study1 by the American Public Transportation Association (APTA) and the National Association of Realtors (NAR), during the last recession, property values were 42 percent better on average when located near public transportation with high-frequency service.
“When homes are located near public transportation, they are among the most valuable and desirable in the area,” said APTA President and CEO Michael Melaniphy. “This study shows that consumers are choosing neighborhoods with high-frequency public transportation because it provides access to up to five times as many jobs per square mile as compared to other areas in a given region. Other attractive amenities in these neighborhoods include lower transportation costs, walkable areas and robust transportation choices.”
“Higher home values reflect greater market demand for areas near public transportation,” said NAR Chief Economist Lawrence Yun. “Transportation plays an important role in real estate and housing decisions, and the data suggests that residential real-estate near public transit will remain attractive to buyers going forward. A sound transportation system not only benefits individual property owners, but also creates the foundation for a community’s long-term economic wellbeing.”
New or planned public transit projects drive up nearby property values and rents, according to Realtor.com. In some U.S. cities, single-family homes near transit stops can cost 2% to 32% more than their counterparts, while condos can cost 2% to 18% more.
Along New York City’s $4.5 billion new Second Avenue subway line, median list prices for homes near three stops on the East Side have risen 4.6% since the railway opened on Jan. 1. Those prices have risen 11.1% in the past three years and are projected to grow faster going forward.
Rent for a one-bedroom apartment in the same area, which had been under construction for nearly 10 years, rose 6.3% near one stop and 5.9% near another, revealing lingering housing demand in anticipation of the new transit stops.
Access to transit is known to add value to homes. A recent Redfin study found that, on average, home prices grew by 0.6% ($2,040) if they experienced a single-point rise in their Transit Score — Redfin’s measure of a location’s accessibility to public transportation. Homes in highly congested metro areas such as Atlanta and Boston saw gains of 1.13% ($1,901) and 1.10% ($3,585), respectively, with a one-point Transit Score increase. Homebuyers say commute times are important when considering where to buy — especially given that homeowners typically purchase homes farther from work than they previously lived.
Transit-rich neighborhoods are often more walkable and have higher retail and amenity density, reducing the number of households that rely on privately-owned vehicles. Across the seven study regions, one in four households did not own a vehicle. On average, a household in a transit-rich area spends $2,500 to $4,000 less on transportation per year.
More than 40,500 occupied units were added near high-frequency public transportation in the seven study areas between 2012 and 2016. Post-recession demands for rental units drove up rent prices all-around, but increases in rents in public transit facility areas were between 2 and 14 percent higher than rent prices in non-transit facility areas.
Office spaces per square foot in transit-proximate areas in Boston, Hartford, Los Angeles, and Phoenix are 5 to 43 percent more expensive than offices in transit-distal areas. In Boston, office sales prices increased by 38% in the transit shed while values of office properties in the region only increased by 3 percent. Commercial properties and office spaces in transit sheds in Hartford are 13 to 14 percent more expensive than those in non-transit areas and around the region. Los Angeles saw a 73 percent increase in commercial property values in transit sheds versus 58 percent in the region. In Phoenix transit sheds, median sales price per square foot for office spaces increased by 54 percent , outperforming non-transit areas and regional growth which increased by 49 percent and 50 percent respectively.
There is a huge potential to utilize a value capture approach to finance rail transit projects by fully understanding the positive impact of accessibility improvement due to the existence of transit stations on property values.
The area of investigation of rail transit accessibility was within a 1 km radius of road network distance to LRT station. The distance in this research is argued to be similar to the literature that has suggested a distance between 500 to 1500 m [17, 23]. The result of this research shows opposite evidence compared to previous studies, which suggested that accessibility highly contributes to the property price near rail transit [8, 22, 29, 38].
The findings of this research suggest that proximity to rail transit does not have a significant impact on the commercial property price compared to other variables such as building size, number of rooms, location, and hospitals. These other variables contribute to the increasing property price by 52.4, 7.7, and 3.2%, respectively.
Cities are harnessing future land values to pay for new infrastructure. But the research behind this approach may be flawed.
But a major study published in Transport Reviews reveals that common methods for evaluating transit’s impact on land values leave much to be desired. Authors Christopher D. Higgins and Pavlos S. Kanaroglou, both scholars of transportation and spatial analysis at McMaster University, reviewed 130 analyses across 60 studies completed in North America over the past 40 years.
