The effect of light rail transit service on nearby property values: Quasi-experimental evidence from Seattle
Michael R Ransom
Brigham Young University
DOI: https://doi.org/10.5198/jtlu.2018.1096
Keywords: light rail transit, hedonic models, housing prices
Abstract
This paper examined the effect of the construction of light rail transit stations on surrounding residential property values in Seattle, Washington. It studied sales of homes in the areas around the seven stations that serve primarily residential areas in the Rainier Valley, using a difference-in-differences regression technique to obtain plausibly causal estimates of the effect of new rail service. For these seven stations, the estimated impact of light rail service was positive for only one station and negative for two stations. Estimated impacts for the other stations were small and statistically insignificant. These results suggest that light rail service did not provide value to the neighborhoods in the Rainier Valley of Seattle. I speculate that the transport service provided by light rail was not a significant improvement relative to the bus lines that serviced the area before light rail was built.Author Biography
Michael R Ransom, Brigham Young University
Professor of Economics, Brigham Young UniversityReferences
Black, S. (1999). Do better schools matter? Parental valuation of elementary education. Quarterly Journal of Economics, 114(2), 577–599. doi: 10.1162/003355399556070
Chatman, D. G., Tulach, N. K., & Kim, K. (2012). Evaluating the economic impacts of light rail by measuring home appreciation: A first look at New Jersey’s River Line. Urban Studies, 49(3), 467–487. doi: 10.1177/0042098011404933
Federal Transit Authority. (2016). National Transit Database. January unedited file. Retrieved from https://www.transit.dot.gov/ntd/ntd-data
Figlio, D. N., & Lucas, M. E. (2004). What’s in a grade? School report cards and the housing market. American Economic Review, 94(3), 591–604. doi: 10.1257/0002828041464489
Guerra, E., & Cervero, R. (2013). Is a half-mile circle the right standard for TODs? Access, 42, 18–21. Retrieved from https://www.accessmagazine.org/spring-2013/half-mile-circle-right-standard-tods/
Higgins, C. D., & Kanaroglou. P. S. (2016). Forty years of modelling rapid transit’s land value uplift in North America: Moving beyond the tip of the iceberg. Transport Reviews, 36(5), 610–634. doi.org/10.1080/01441647.2016.1174748
Kim, K., & Lahr, M. L. (2014). The impact of Hudson-Bergen light rail line on residential property appreciation. Papers in Regional Science, 93(Supplement 1), S79–S97. doi: 10.1111/pirs.12038
Lari, A., Levinson, D., Zhao, Z., Iacono, M., Aultman, S., Das, K. V., Junge, J., Larson, K., & Scharenbroich, M. (2009). Value capture for transportation finance (research report). Minneapolis, MN: University of Minnesota, Center for Transportation Studies. Retrieved from http://www.cts.umn.edu/Research/featured/valuecapture/
Lindblom, M. (2016, April 23) 25-year wait for Sound Transit to finish light rail? Here’s why. The Seattle Times. Retrieved from http://www.seattletimes.com/seattle-news/transportation/25-year-wait-for-sound-transit-to-finish-light-rail-heres-why/
Papon, F., Nguyen-Luong, D., & Boucq, E. (2015). Should any new light rail line provide real estate gains, or not? The case of the T3 line in Paris. Research in Transportation Economics, 49, 43–54. doi.org/10.1016/j.retrec.2015.04.005
Parmeter, C. F., & Pope, J. C. (2012). Quasi-experiments and hedonic property value methods. In J. A. List & M. K. Price (Eds.), Handbook of experimental economics and the environment (pp. 3–66). Cheltenham, England: Edward Elgar. ISBN 9781847205459.
Pope, D. G., & Pope, J. C. (2015). When Walmart comes to town: Always low housing prices? Journal of Urban Economics, 87, 1–13. doi: 10.1016/j.jue.2014.10.004
Pryne, E. (2001, November 31). Sound Transit adopts 14-mile route; light-rail construction could start in summer. The Seattle Times. Retrieved from http://community.seattletimes.nwsource.com/archive/?date=20011130&slug=sound30m0
Pryne, E. (2002, March 15). Sound Transit gets green light to buy land for light rail. The Seattle Times. Retrieved from http://community.seattletimes.nwsource.com/archive/?date=20020315&slug=sound15m
Richmond, J. (2001). A whole system approach to evaluating urban transit investments. Transport Reviews, 21(2), 141–179. doi.org/10.1080/01441640116962
Richmond, J. (2005). Transport of delight: The mythical conception of rail transit in Los Angeles. Akron, OH: The University of Akron Press.
Rosen, S. (1974). Hedonic prices and implicit markets: Product differentiation in pure competition. Journal of Political Economy, 82(1), 34–55. Retrieved from http://www.jstor.org/stable/1830899
Sound Transit. (no date). Regional transit history 1997-2003. Retrieved from http://www.soundtransit.org/About-Sound-Transit/News-and-events/Reports/1997---2003.
