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Mass Transportation, Apartment Rent and Property Values

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    Abstract

    Rent plays a vital role in property valuation because any positive or negative influence on rent will in turn affect a property's value. This paper examines the effect of mass transportation on apartment rent. Specifically, this study investigates the impact on rent and value for residential income properties located in close proximity to Washington, D.C. Metrorail stations. After reviewing the empirical research which has focused on the effect of mass transportation availability on property values, this paper examines the benefits on apartment rent of Washington, D.C. apartment buildings from location near Metrorail stations. Our empirical results show that distance from a metro station has an adverse impact on apartment rent, i.e., each one-tenth mile increase in distance from the station results in a decrease in rent per apartment unit of about 2.50%. This analysis should be of interest to a host of domestic and international market participants including academics who study real estate markets, tax assessors who determine market value, appraisers who make market-derived rent adjustments, and property managers who set apartment rents.

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    File URL: http://aux.zicklin.baruch.cuny.edu/jrer/papers/pdf/past/vol12n01/v12p001.pdf
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    Bibliographic Info

    Article provided by American Real Estate Society in its journal Journal of Real Estate Research.

    Volume (Year): 12 (1996)
    Issue (Month): 1 ()
    Pages: 1-8

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    Handle: RePEc:jre:issued:v:12:n:1:1996:p:1-8

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    Postal: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323
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    Web page: http://www.aresnet.org/

    Order Information:
    Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
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    Web: http://aux.zicklin.baruch.cuny.edu/jrer/about/get.htm

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    References

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    1. Dean H. Gatzlaff & Marc T. Smith, 1993. "The Impact of the Miami Metrorail on the Value of Residences near Station Locations," Land Economics, University of Wisconsin Press, vol. 69(1), pages 54-66.
    2. G. Stacy Sirmans & John D. Benjamin, 1991. "Determinants of Market Rent," Journal of Real Estate Research, American Real Estate Society, vol. 6(3), pages 357-380.
    3. Karl L. Guntermann & Stefan Norrbin, 1987. "Explaining the Variability of Apartment Rents," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 15(4), pages 321-340.
    4. Richard Voith, 1991. "Transportation, Sorting and House Values," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(2), pages 117-137.
    5. Benjamin, John D & Lusht, Kenneth M, 1993. "Search Costs and Apartment Rents," The Journal of Real Estate Finance and Economics, Springer, vol. 6(2), pages 189-97, March.
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    Cited by:
    1. Mathur, Shishir & Smith, Adam, 2013. "Land value capture to fund public transportation infrastructure: Examination of joint development projects' revenue yield and stability," Transport Policy, Elsevier, vol. 30(C), pages 327-335.
    2. Yan, Sisi & Delmelle, Eric & Duncan, Michael, 2012. "The impact of a new light rail system on single-family property values in Charlotte, North Carolina," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 5(2), pages 60-67.
    3. Ghebreegziabiher Debrezion & Eric Pels & Piet Rietveld, 2005. "Impact of railway station on Dutch residential housing market," ERSA conference papers ersa05p748, European Regional Science Association.
    4. Mohammad, Sara I. & Graham, Daniel J. & Melo, Patricia C. & Anderson, Richard J., 2013. "A meta-analysis of the impact of rail projects on land and property values," Transportation Research Part A: Policy and Practice, Elsevier, vol. 50(C), pages 158-170.
    5. Dubé, Jean & Thériault, Marius & Des Rosiers, François, 2013. "Commuter rail accessibility and house values: The case of the Montreal South Shore, Canada, 1992–2009," Transportation Research Part A: Policy and Practice, Elsevier, vol. 54(C), pages 49-66.
    6. Efthymiou, D. & Antoniou, C., 2013. "How do transport infrastructure and policies affect house prices and rents? Evidence from Athens, Greece," Transportation Research Part A: Policy and Practice, Elsevier, vol. 52(C), pages 1-22.
    7. Ghebreegziabiher Debrezion & Eric Pels & Piet Rietveld, 2004. "The Impact of Railway Stations on Residential and Commercial Property Value: a Meta Analysis," Tinbergen Institute Discussion Papers 04-023/3, Tinbergen Institute.
    8. Boris A. Portnov & Bella Genkin & Boaz Barzilay, 2009. "Investigating the Effect of Train Proximity on Apartment Prices: Haifa, Israel as a Case Study," Journal of Real Estate Research, American Real Estate Society, vol. 31(4), pages 371-396.
    9. Luca D’Acci, 2014. "Monetary, Subjective and Quantitative Approaches to Assess Urban Quality of Life and Pleasantness in Cities (Hedonic Price, Willingness-to-Pay, Positional Value, Life Satisfaction, Isobenefit Lines)," Social Indicators Research, Springer, vol. 115(2), pages 531-559, January.
    10. Rodríguez, Daniel A. & Mojica, Carlos H., 2009. "Capitalization of BRT network expansions effects into prices of non-expansion areas," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(5), pages 560-571, June.
    11. Dubé, Jean & Rosiers, François Des & Thériault, Marius & Dib, Patricia, 2011. "Economic impact of a supply change in mass transit in urban areas: A Canadian example," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(1), pages 46-62, January.
    12. Sedgley, Norman H. & Williams, Nancy A. & Derrick, Frederick W., 2008. "The effect of educational test scores on house prices in a model with spatial dependence," Journal of Housing Economics, Elsevier, vol. 17(2), pages 191-200, June.
    13. Sebastian Brandt & Wolfgang Maennig, 2012. "The impact of rail access on condominium prices in Hamburg," Transportation, Springer, vol. 39(5), pages 997-1017, September.

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