The Effect of International Airports on Commercial Property Values: Case Studies of Toronto, Ontario, Canada and Vancouver, BC, Canada

Airports are the portals where international air transport networks, which are increasingly important in a globalized, services-oriented economy, intersect with regional and metropolitan ground transportation networks. Our hypothesis is that, at this nexus, the degree of international connectivity at an airport and distance from the airport manifests itself in the value of commercial properties. As such airports are shaping the urban form around them and highlight the importance of integrated metropolitan and airport planning. Looking at Canada’s two largest international airports at Toronto, Ontario and Vancouver, BC, and controlling for other factors, we see evidence that commercial properties decrease in value as distance to the airport increases and increase in value as the range of international frequencies and destinations available at the airport increase. We introduce a new concept of land-use at and around airports of “aviation-dependent” which would include hotels and corporate head offices, in addition to the traditional “aviation-related” and “aviation-compatible” uses. We see the effects of distance and connectivity are particularly pronounced on commercial properties occupied by aviation-dependent uses.