Transit-oriented development and housing prices
By: J. David Chapman/April 6, 2017
The rail installation began on Joe Carter Avenue in Bricktown for the MAPS 3 streetcar recently.
Connecting Bricktown and Midtown, the 4.9-mile, $50 million construction project should be complete in about 18 months. Oddly enough, results from an important research project on the influence of public transportation on housing values were released at the same time this construction began.
This research is intended to drive policy in cities considering transit-oriented development. TODs create a compact, high density, mixed-use community near public transit such as rail, subway, and bus lines. TODs are becoming an increasing common sustainable development strategy in cities of all sizes to overcome traffic congestion, reduce greenhouse gas emissions, offer better access to jobs, make communities more walkable, and decrease transportation costs.
This research focuses on housing values located within half a mile to a public transportation stop. In this study, being located within half a mile of a public transportation stop was not a significant factor in explaining housing values. This finding refutes previous studies that show proximity to a public transportation stop as a significant positive influence on housing values. This research is important to real estate practitioners operating within transit-oriented developments as proximity to public transportation may not significantly influence property values.
At first glance the results were surprising; however, what becomes obvious is the importance of other housing characteristics such as neighborhood ratings, crime statistics, bedrooms, bathrooms, closet size and parking. Perhaps what this new study has shown us is being within half a mile of public transportation is not sufficient enough to make up for other more important housing characteristics. There is a tendency for housing located within the proximity of a public transportation to be denser, which can lead to lower housing values and not score as well in the characteristics mentioned above.
The good news is when describing the reasons TODs are being considered by cities, I did not list increased housing values. In fact, one of the biggest problems confronting cities today is unaffordable housing. If our streetcar rail system is able to overcome traffic congestion, reduce greenhouse gas emissions, offer better access to jobs, make communities more walkable, decrease transportation costs and still maintain affordable housing costs, it will be positive.
J. David Chapman is an associate professor of finance and real estate at the University of Central Oklahoma (jchapman7@uco.edu).