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Estimating the value of a new transit option

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  • Billings, Stephen B.
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    Abstract

    The research presented here argues that identifying the impacts of rail transit on property values is not possible without estimates of both price gradients to transit stations as well as overall property value trends in transit neighborhoods. The latter may highlight a number of secondary impacts of rail transit on nuisance elements such as crime and parking as well as targeted public and private investment along rail-transit corridors. In order to estimate neighborhood property values, one must establish relevant control neighborhoods. In the case of Charlotte, North Carolina, the public planning and funding process provides information on proposed light rail-transit (LRT) corridors that were ultimately not selected as the first alignment in Charlotte's light rail transit system in 2000. Estimation incorporates a difference-in-difference estimator across a range of hedonic models. Preferred estimates highlight that LRT provides a neighborhood impact of 4.0% for single-family properties and 11.3% for condominiums sold within 1mile of LRT stations. No neighborhood impacts are realized for commercial properties and estimated price gradients provide insignificant impacts across a number of models. Results suggest that LRT investment may be used more as an economic development tool for specific neighborhoods rather than a transportation amenity in cities like Charlotte, which contain sparser development patterns.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0166046211000500
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    Bibliographic Info

    Article provided by Elsevier in its journal Regional Science and Urban Economics.

    Volume (Year): 41 (2011)
    Issue (Month): 6 ()
    Pages: 525-536

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    Handle: RePEc:eee:regeco:v:41:y:2011:i:6:p:525-536

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    Web page: http://www.elsevier.com/locate/regec

    Related research

    Keywords: Rail transit; Residential property valuation;

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    References

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    1. Clapp, John M & Giaccotto, Carmelo, 1998. "Price Indices Based on the Hedonic Repeat-Sales Method: Application to the Housing Market," The Journal of Real Estate Finance and Economics, Springer, vol. 16(1), pages 5-26, January.
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    16. Ghebreegziabiher Debrezion & Eric Pels & Piet Rietveld, 2007. "The Impact of Railway Stations on Residential and Commercial Property Value: A Meta-analysis," The Journal of Real Estate Finance and Economics, Springer, vol. 35(2), pages 161-180, August.
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    Cited by:
    1. Stephen J. Redding & Matthew A. Turner, 2014. "Transportation Costs and the Spatial Organization of Economic Activity," CEP Discussion Papers dp1277, Centre for Economic Performance, LSE.
    2. Givord, Pauline & Rathelot, Roland & Sillard, Patrick, 2013. "Place-based tax exemptions and displacement effects: An evaluation of the Zones Franches Urbaines program," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 151-163.
    3. Miller, Mark V., 2013. "Valuing local collective goods: the case of business improvement districts," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150635, Agricultural and Applied Economics Association.
    4. Ioulia Ossokina & Gerard Verweij, 2014. "Urban traffic externalities: quasi-experimental evidence from housing prices," CPB Discussion Paper 267, CPB Netherlands Bureau for Economic Policy Analysis.

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