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Study: Light Rail, Transit Access Boost Housing Prices

A report commissioned by American Public Transportation Association and the National Association of Realtors found that homes with access to transit weather downturns better.

Transit services like light rail bolster housing prices and decrease the amount households spend on transportation, according to a report released to the public Thursday.

“The real estate mantra of ‘location, location, location’ is more important than ever,” the study concluded. “Moving beyond the traditional arguments that good schools and neighborhood amenities impact housing prices, emerging research has indicated that urban form and transportation options have played a key role in the ability of residential properties to maintain their value since the onset of the recession.”

The American Public Transportation Association and the National Association of Realtors commissioned the study, titled “The New Real-Estate Mantra: Location near Public Transportation,” to identify the benefits of transit and quantify its impact on housing prices.

The Center for Neighborhood Technology, which prepared the study, examined residential property values between 2006 and 2011 in five regions: Boston, Chicago, Minneapolis-St. Paul, Phoenix and San Francisco. Researchers compared the performance of home values in each region as a whole to the values of homes with access to transit.

Across the five regions, homes with access to transit outperformed others in their region by an average of 41.6 percent. Homes near heavy rail, light rail and bus rapid transit corridors held their value best.

“In addition to having higher frequency service and better transit connectivity, these types of fixed-guideway transit stations also tend to be located in areas that are more walkable, have higher residential density, and better access to jobs,” according to the report.

Click on the PDF to the right to read the full report.

The Twin Cities region was ranked second, behind Boston, in the disparity between homes with access to transit and the region overall.  Twin Cities homes with access to transit outperformed the region as a whole by 47.8 percent.

The study examined two transit sheds—the Hiawatha light rail transit line and the Northstar commuter rail line. Hiawatha accounted for the bulk of the disparity; it performed 62.7 percent better than the Twin Cities region. By contrast, the Northstar Line did 11.2 percent better.

Access to transit also cuts down on transportation costs, the study found. The Twin Cities’ average monthly transportation cost per household was $1,164 compared to $840 in the Hiawatha transit shed and $977 for Northstar.

The report authors noted that studies are increasingly showing that buyers are willing to pay for so-called “traditional neighborhood communities” that are walkable, higher density, mixed use and close to transit.

That complements the conclusion of an Atlantic Cities article published earlier this month that warned of “the great senior sell off.” Aging baby boomers will soon start trying to sell their homes as they try to downsize. In the past, families with children would have been there to snap up the homes because virtually none of those families wanted condos or urban townhomes. But now, about a quarter of families with children want those homes. That could lead to a housing crash around 2020, the article argued.

Would you be willing to pay more to be closer to light rail? Share your thoughts in the comments below.

Norann Dillon March 22, 2013 at 03:57 PM
The MetCouncil, who has a vested interested in more transit spending, provided "point level data" for the Minneapolis portion of the study. Similar data for the other four cities was provided by real estate research firms. [Point level data refers to the center of a building footprint or land parcel as opposed to the center of its block-face.] Why didn't the study's authors use a more independent data source for Minneapolis? For the sake of argument, assuming that the MetCouncil's data are the same as would have been provided by a real estate research firm, this study demonstrates that home owners along transit corridors benefit at the expense of the rest of us. According to a County Transit Improvement Board report, the PER RIDE subsidies for light rail and commuter rail in 2011 were $1.39 and $16.60, respectively. "Access to transit" does not cut down household transportation costs; it transfers them to people throughout the metro. In other words, you pay for the trains whether you ride them or not. Perhaps the real implication of this study is whether people will flock to housing along transit corridors since they can have others pay their way, or if we will be responsible and take a stand for more efficient transportation spending.
carmen heim March 22, 2013 at 03:59 PM
It seems logically that each property should be looked at individually. I fail to see our property value increasing and see this as a misrepresented marketing ploy. We purchased our home 27 years ago on Bassett Creek Drive in the serenity of the refuge and wet lands area. I do not believe adding a stop on Golden Valley road so we hear a horn every so many minutes when it comes in is going to help us sell our home at an increased value. LRT belongs in a location for business potential or along 55 and certainly not GOLDEN VALLEY ROAD STATION... I deny the transit Mantra, the Bassett Creek Drive mantra is peace tranquility and serenity.
Candace Oathout March 22, 2013 at 04:29 PM
I am perplexed by the premise of this report that people want to live in high density neighborhoods with the constant noise of heavy rail, light rail and bus traffic. The stated savings through use of these transit modes is a false conclusion because those costs are shifted to taxes. The question becomes who controls your family finances and transportation. Do you really want the government to control where you live by building high density neighborhoods your finances through taxation, and your freedom to choose where and when you travel. The most successful light rail project (LRT) in the United States, San Diego Transit, has operated LRT for over 30 years with at best a -10% Return Of Investment(ROI). Some might say that is success. Why would we build and maintain a transit system that will operate at a loss forever? Our economy is over burdened with debt. We have already seen people living on fixed incomes taxed out of their homes through explosive property tax rates. The fact is government money comes from pensioners, single parents, college graduates trying to afford a home and family. People are not choosing townhouses and condominiums because they desire that lifestyle. They make their choices based on the size of their mortgage payments. Most have been priced out of the single family home market. This may be a great PR article but it certainly doesn't represent the reality of life in the 21st Century.
Blair Tremere March 22, 2013 at 09:21 PM
The study is another component in the propaganda strategy to sustain the anecdotal case for more public funding of unproven transportation modes. It is unfortunate, but true, that the value of these ploys is in the headlines---few readers bother to check out the entire reports and to question the premises and data. Real world experience on the two local systems is contrary to the fabricated "findings." The poor ridership and skyrocketing subsidy of the NorthStar "commuter line" are reported but of little consequence to the officials appointed to govern the system and a small investment in time and gas for a drive up and down the Hiawatha Line will demonstrate what a fantastic redevelopment scenario has evolved with that line. Quality of life considerations include crime, public safety costs, credibility of ridership numbers (it is an honor system and the reorted numbers are estimates always tied back to "expected" and "projected" ridership. Sadly, the train left the station for SW LRT and Bottineau long ago and all the public hearings and dog-and-pony shows are just that---shows. It is true the federal funding has not come through and that could be a last great hope. But the champions of all the "new and better" transit will be happy to fund the whole thing locally if federal money is slow or never to come.....just witness the antics at the Legislature right now. And then, there are the millions spent and being spent to plan this unfunded thing. Wow.
Mike B. March 24, 2013 at 12:28 PM
The Met Council "conveniently" forgets to mention the increase in crime associated with such transit. In the San Diego area, formerly outlying safe areas such as LaMesa are now plagued with crime associated with the extension of the trolley system. Same thing in Minneapolis with criminals using light rail and the Metro Bus system to access the Mall of America.
Elaine Wynne March 24, 2013 at 06:40 PM
I don't agree with parts of the above comments. I value light rail. However, I wonder to what degree the light rail is actually accessible to Golden Valley or North Mpls., given the Met Council's own use predictability measures. I want light rail. I have suggested ways that it could benefit both Golden Valley and North Minneapolis without tearing up the environment. Open space, trees and wetlands have economic value as well, for health of individuals and communities, as well as housing values. I believe we have not seen adequate cost benefit analyses. Hiawatha line did not have to go through 3 parks on its way to the airport. I must say, I was put off by the presumptous article "pumping" the D1 route when the environmental impact study is not even complete.
Lydia Konsor March 24, 2013 at 06:58 PM
If this is truly real - that property values increase along transit lines, then why isn't Hennepin County demanding the Botineau LRT be routed down West Broadway? Why are they continuing plans for an alignment in an undeveloped, unpopulated, environmentally sensitive trench with little potential for development. I would have to believe that when you figure in the return on investment it makes more economic sense to build an LRT line where there is greater opportunity for development. Why are the many politicians that have lined up behind this proposal denying the North Minneapolis neighborhoods this opportunity.
Anita March 25, 2013 at 03:18 AM
Why do Golden Valley residents think they are more important than North Mpls residents? That is ridiculous. Personally, I've always thought of Golden Valley as a rather crappy place to live. I fully support LRT in Golden Valley.

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