Anticipatory Effects of Rail Upgrades: Auckland's Western Line
We examine effects of urban passenger rail upgrades to Auckland's Western Line, including double tracking, station development, and related urban renewal projects. The results are used to assess anticipated net benefits of the developments. The rail-related upgrades are expected to be completed in late 2010, but have been well publicised and so should already be factored into people's location and pricing decisions. Our analysis compares developments near Western Line stations with developments elsewhere in Auckland, thus controlling for wider regional and macroeconomic impacts. As well as describing developments, we estimate the impact on property values of station proximity. Changes in property values are used to identify benefits due to the upgrades since prospective property buyers bid up the price of a property to include the net benefits; otherwise they would be outbid by another prospective buyer. "Net benefits" include gross benefits less direct additional property-tax costs due to the project but do not include costs borne elsewhere (though these can be accounted for separately). We utilise actual property sale prices using a repeat sales methodology to measure price appreciation. Specifically, we examine whether price appreciation is affected by proximity to Western Line stations, allowing for different effects at each station. Our main focus is on residential values but we refer also to commercial and industrial applications.
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