The impact of transit investment on housing values: a simulation experiment
This paper uses a joint-choice logit model of travel demand and residential location to simulate the impact of urban rapid-transit investment on housing values within a radial corridor. The model developed is a clean break with the traditional urban economic theory. Instead the heterogeneous nature of travel and location decisions is recognized and the logit model, consistent with stochastic utility maximization, is employed. Simulation experiments reveal that the aggregate increase in property values caused by transit's impact on work trips is highly sensitive to the aggregate number of vacancies within the corridor. Under reasonable assumptions, transit investment tends to lower central-city property values, to increase central-city vacancies, and to raise suburban property values. Depending on several influences, aggregate property values can increase or decrease and the change can often be statistically insignificant. Calculations show that an equitable taxation (and compensation) of property-value changes may raise a small to modest proportion of a transit system's construction cost. Several considerations suggest that even these modest estimates might be optimistic. These results help develop an improved perspective on 'value-capture policy' which has not, up to now, benefited from quantitative analysis. Major extensions of the model are briefly considered.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
When requesting a correction, please mention this item's handle: RePEc:pio:envira:v:11:y:1979:i:3:p:239-255. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Neil Hammond)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.