Is “Near Public Transportation” the New Real Estate Mantra?

3.26.13 |More evidence that strong public transportation is critical to regional resilience arrived last week in the form of a new property values study by the American Public Transportation Association, the Center for Neighborhood Technology, and the National Association of Realtors, which found that homes near fast, frequent transit lines performed 42 percent better than those further away.

(The resilience of my 2013 NCAA Tournament bracket, we shall definitely not discuss. It dissipated after opening weekend, never to be seen again.)

Advocates of transit-oriented development may well reply with an “everybody knows this” shrug, but the fact that NAR co-sponsored the study suggests to me that the notion that public transit is a good, value-adding thing has gone mainstream. It’s quite a leap from “drive till you qualify” to The New Real-Estate Mantra: Location Near Public Transportation.

The study examined home values in Boston, Chicago, Minneapolis-St. Paul, Phoenix, and San Francisco both within and outside the “transit shed” — CNT’s description for those areas “accessible from any neighborhood within 30 minutes” (including one transfer) by public transit — between 2006 and 2011, and found:

  • Price resilience was highest near stations with the most connections and most frequent service, which not coincidentally are also the most walkable neighborhoods and communities.
  • Housing type (apartments, single-family, townhouse, etc.) doesn’t matter: “For most property types, the transit shed outperformed the region, and in Boston and Chicago this holds true for all property types.”
  • Residents in a transit shed had “better access to jobs and lower average transportation costs than the region as a whole.”

Those results aren’t surprising for Boston, Chicago, or San Francisco, which developed along traditional urban patterns (as did many of their older suburbs). In Boston, where the Massachusetts Bay Transportation Authority oversees the “T” and suburban commuter rail, housing prices within the transit shed outdid the region by 129 percent. In Chicago, the transit shed performed 30 percent better than the region (Chicago Transit Authority’s shed that contains the “L” did 47 percent better; Metra’s suburban commuter rail shed did 23 percent better). Nor are they surprising in the Bay Area, where five agencies’ combined transit shed outperformed the region by 37 percent.

But those same results held up in Phoenix and the Twin Cities, whose rail transit system is comparatively much, much smaller. In Phoenix, for example, where the housing bubble’s burst hit like a haboob, the transit shed along Valley Metro’s 20-mile light-rail line did 37 percent better than the region as a whole. And in the Twin Cities, where rail transit currently consists of the Hiawatha light rail line and the Northstar commuter rail line, their transit sheds outperformed the region as a whole by 63 percent and 11 percent, respectively.

The results, the study concludes, “support investment in transit and encourage development in location efficient areas.” Moreover, mere bus transit in and of itself isn’t enough to do the trick. There must be rail (heavy, light, commuter) and/or bus rapid transit: “The presence of fixed-guideway transit not only benefits individual property owners, it also supports a more resilient tax base.”

Juries must pay heed to the preponderance of evidence, or evidence beyond a shadow of doubt. Will state legislatures and Congress?

Photo/ Steven Vance.

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