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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.

Suggested Citation

  • John D. Benjamin & G. Stacy Sirmans, 1996. "Mass Transportation, Apartment Rent and Property Values," Journal of Real Estate Research, American Real Estate Society, vol. 12(1), pages 1-8.
  • Handle: RePEc:jre:issued:v:12:n:1:1996:p:1-8
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    References listed on IDEAS

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    1. 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 189-197, March.
    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. Richard Voith, 1991. "Transportation, Sorting and House Values," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(2), pages 117-137.
    4. 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.
    5. 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.
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    Cited by:

    1. Lin, Boqiang & Du, Zhili, 2017. "Can urban rail transit curb automobile energy consumption?," Energy Policy, Elsevier, vol. 105(C), pages 120-127.
    2. 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.
    3. 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: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 115(2), pages 531-559, January.
    4. 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.
    5. Mathur, Shishir & Ferrell, Christopher, 2013. "Measuring the impact of sub-urban transit-oriented developments on single-family home values," Transportation Research Part A: Policy and Practice, Elsevier, vol. 47(C), pages 42-55.
    6. Papon, Francis & Nguyen-Luong, Dany & Boucq, Elise, 2015. "Should any new light rail line provide real estate gains, or not? The case of the T3 line in Paris," Research in Transportation Economics, Elsevier, vol. 49(C), pages 43-54.
    7. 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.
    8. 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.
    9. Cao, Xinyu & Hough, Jill A., 2008. "Hedonic Value of Transit Accessibility: An Empirical Analysis in a Small Urban Area," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 47(3).
    10. 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.
    11. 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.
    12. Martínez, Luis Miguel Garrido & Viegas, José Manuel, 2012. "The value capture potential of the Lisbon Subway," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 5(1), pages 65-82.
    13. Ghebreegziabiher Debrezion & Eric Pels & Piet Rietveld, 2005. "Impact of railway station on Dutch residential housing market," ERSA conference papers ersa05p748, European Regional Science Association.
    14. 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.
    15. 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.
    16. 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.
    17. Sebastian Brandt & Wolfgang Maennig, 2012. "The impact of rail access on condominium prices in Hamburg," Transportation, Springer, vol. 39(5), pages 997-1017, September.
    18. 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.
    19. Zhong, Haotian & Li, Wei, 2016. "Rail transit investment and property values: An old tale retold," Transport Policy, Elsevier, vol. 51(C), pages 33-48.

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    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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