Impacts of commuter rail transit on property values - The Montreal North Shore case

This paper looks at the impact of the commuter rail transit (CRT) system that serves the Montreal North Shore area, Quebec, Canada, on the market value of single-family houses located nearby four stations along the Montreal/Saint-JÈrÙme route. The research rests upon a combination of hedonic modelling and spatial analysis methods used to compute a series of spatio-temporal accessibility indices by access mode to CRT (car, bus and on foot). Real estate data come from the Greater Montreal Real Estate Board (GMREB) and include 63,784 properties sold over the study area between 1992 and 2009. The data contain detailed information on sale price, asking price, date and context of sale, dwelling type, property age, building and land attributes, outbuilding attributes as well as on any renovation to the house. Information relative to location, neighbourhood and environmental characteristics of the property is also available. As for information relative to the CRT, it was provided by the Montreal Transit Agency (MTA) and deals with station location, user volumes and trip structure based on 2005 and 2008 on-board surveys. Findings suggest that the implementation of a CRT service on the Montreal North Shore area has a positive, and significant, impact on residential property values which decreases with distance to the nearest station. Thus, on-foot proximity to stations results in an average market premium of 1.5%, 1.3% and 1% for houses located within 500 m, between 500 m and 1 km and between 1 and 1.5 km from a station, respectively. Car accessibility also translates into a significant premium averaging 3.6% of property value, with a maximum of 4.7% for properties that are 9.2 minutes distant from a station. Finally, once spatial autocorrelation effects are accounted for, multi-modal bus trips tend to result, in most cases, in a significant rise in house values estimated at roughly 1% and 1.3% for the regular and slow services, respectively, and for houses located within 10 km from stations. For houses located within 10 and 20 km from a station, the market premium derives from the express bus service and is estimated at 3.8% of value. Such findings suggest that positive externalities from an improved accessibility to the CRT service prevail over negative externalities due to nuisance effects, in spite of the strong motorization that characterizes the Montreal North Shore households.