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Rail + Property Development: A model of sustainable transit finance and urbanism

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  • Cervero, Robert
  • Murakami, Jin

Abstract

Hong Kong has aggressively pursued transit value capture to finance railway infrastructure through its “Rail + Property” development program, or R+P. More than half of all revenues received by the MTR Corporation, the owner-operator of Hong Kong’s largest railway network, come from property development. A wide variety of R+P projects presently exist in Hong Kong. Most focus on housing development though all have some degree of commercial development. Recent generation R+P projects have placed a stronger premium on urban design and quality of pedestrian environments. This has generally paid off in the form of ridership gains and higher real-estate prices. Based on ridership modeling, an R+P station with a transit-oriented design averages around 35,000 additional weekday passengers. The biggest ridership bonus comes from transit-oriented development tied to large-scale residential R+P projects. Housing price premiums in the range of 5% to 17% were found for units built as part of R+P projects. If the R+P projects had a distinctively transit-oriented design, the premiums exceed 30%. With such success, the R+P model is being seriously considered as a means of financing rail infrastructure and advancing transit-oriented development in mainland Chinese cities. MTRC recently won a concession to apply the R+P model to finance Line 4 of Shenzen’s metrorail system. As rapid urbanization continues to paralyze the streets of many Chinese cities with traffic and threatens environmental quality locally and on the global stage, it is imperative that arguably the most sustainable form of urbanism – the linkage of land use and public-transport – be aggressively pursued. Hong Kong’s R+P model, we believe, is the best template available for achieving sustainable transit finance and sustainable urbanism.

Suggested Citation

  • Cervero, Robert & Murakami, Jin, 2008. "Rail + Property Development: A model of sustainable transit finance and urbanism," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt6jx3k35x, Institute of Transportation Studies, UC Berkeley.
    • Handle: RePEc:cdl:itsrrp:qt6jx3k35x
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    Cited by:

    1. Pittman Russell, 2017. "The Underappreciated Connection between Rail Restructuring Strategies and Financing," Review of Network Economics, De Gruyter, vol. 16(2), pages 161-169, June.
    2. Aston, Laura & Currie, Graham & Kamruzzaman, Md. & Delbosc, Alexa & Teller, David, 2020. "Study design impacts on built environment and transit use research," Journal of Transport Geography, Elsevier, vol. 82(C).
    3. Ingvardson, Jesper Bláfoss & Nielsen, Otto Anker, 2018. "How urban density, network topology and socio-economy influence public transport ridership: Empirical evidence from 48 European metropolitan areas," Journal of Transport Geography, Elsevier, vol. 72(C), pages 50-63.
    4. Xiaohuan Xie & Shiyu Qin & Zhonghua Gou & Ming Yi, 2020. "Can Green Building Promote Pro-Environmental Behaviours? The Psychological Model and Design Strategy," Sustainability, MDPI, vol. 12(18), pages 1-18, September.
    5. Chang, Haoliang & Huang, Jianxiang & Yao, Weiran & Zhao, Weizun & Li, Lishuai, 2022. "How do new transit stations affect people's sentiment and activity? A case study based on social media data in Hong Kong," Transport Policy, Elsevier, vol. 120(C), pages 139-155.
    6. Caiyun Qian & Yang Zhou & Ze Ji & Qing Feng, 2018. "The Influence of the Built Environment of Neighborhoods on Residents’ Low-Carbon Travel Mode," Sustainability, MDPI, vol. 10(3), pages 1-26, March.
    7. Alexander Y. Ryzkov & Pavel Zuzin, 2016. "Urban Public Transport Development in Russia: Trends and Reforms," HSE Working papers WP BRP 05/URB/2016, National Research University Higher School of Economics.
    8. Robert Cervero, 2009. "Transport Infrastructure and Global Competitiveness: Balancing Mobility and Livability," The ANNALS of the American Academy of Political and Social Science, , vol. 626(1), pages 210-225, November.
    9. Jinkyung Choi & Yong Lee & Taewan Kim & Keemin Sohn, 2012. "An analysis of Metro ridership at the station-to-station level in Seoul," Transportation, Springer, vol. 39(3), pages 705-722, May.
    10. Matti Siemiatycki, 2015. "Mixing Public and Private Uses in the Same Building: Opportunities and Barriers," Journal of Urban Design, Taylor & Francis Journals, vol. 20(2), pages 230-250, April.
    11. Singh, Yamini Jain & Fard, Pedram & Zuidgeest, Mark & Brussel, Mark & Maarseveen, Martin van, 2014. "Measuring transit oriented development: a spatial multi criteria assessment approach for the City Region Arnhem and Nijmegen," Journal of Transport Geography, Elsevier, vol. 35(C), pages 130-143.
    12. Elena Koncheva & Nikolay Zalesskiy, 2016. "Spatial Development of the Largest Russian Cities During the Post-Soviet Period: Orienting Towards Transit or Maintaining Soviet Trends," HSE Working papers WP BRP 04/URB/2016, National Research University Higher School of Economics.
    13. Liang, Yue & Du, Mengbing & Wang, Xiangxiao & Xu, Xiwei, 2020. "Planning for urban life: A new approach of sustainable land use plan based on transit-oriented development," Evaluation and Program Planning, Elsevier, vol. 80(C).
    14. Omar Alotaibi & Dimitris Potoglou, 2017. "Perspectives of travel strategies in light of the new metro and bus networks in Riyadh City, Saudi Arabia," Transportation Planning and Technology, Taylor & Francis Journals, vol. 40(1), pages 4-27, January.
    15. Zhou, Nan & Price, Lynn & Yande, Dai & Creyts, Jon & Khanna, Nina & Fridley, David & Lu, Hongyou & Feng, Wei & Liu, Xu & Hasanbeigi, Ali & Tian, Zhiyu & Yang, Hongwei & Bai, Quan & Zhu, Yuezhong & Xio, 2019. "A roadmap for China to peak carbon dioxide emissions and achieve a 20% share of non-fossil fuels in primary energy by 2030," Applied Energy, Elsevier, vol. 239(C), pages 793-819.
    16. Jinbao Zhao & Wei Deng & Yan Song & Yueran Zhu, 2014. "Analysis of Metro ridership at station level and station-to-station level in Nanjing: an approach based on direct demand models," Transportation, Springer, vol. 41(1), pages 133-155, January.

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