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.