A new study, The New Real Estate Mantra: Location Near Public Transportation, conducted by the Center for Neighborhood Technology shows that homes in close proximity to transit stations lost much less of their value during the collapse of the housing market.
The study looks at the Boston, Chicago, Minneapolis-St. Paul, Phoenix, and San Francisco metro areas and found that, in all of the regions, the drop in average residential sales prices within the transit shed was smaller than in the region as a whole or the non-transit area. Download the report here.
Fueled by demographic change and concerns over quality of life, there has been a growing interest in communities with active transportation modes. The recession added another dimension to these discussions by emphasizing the economic implications of transportation choices. Housing and transportation, the two economic sectors mostly closely tied to the built environment, were both severely impacted by the economic downturn. There has been a growing effort among planners, real estate professionals, and economists to identify not only the economic benefits of alternative transportation modes in and of themselves, but also the impact that they have on housing prices and value retention. The real estate mantra of “location, location, location” is more important than ever. 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.
Studies have shown that consumers are willing to pay more for housing located in areas that exemplify new urbanist principles or are “traditional neighborhood developments.” These neighborhoods are walkable, higher density, and have a mix of uses as well as access to jobs and amenities such as transit.
This analysis investigates how well residential properties located in proximity to fixed-guideway transit have maintained their value as compared to residential properties without transit access between 2006 and 2011 in five regions: Boston, Chicago, Minneapolis-St. Paul, Phoenix, and San Francisco. The selection of these places for the study regions provides not only a geographic distribution, but also an illustrative sample of the types of fixed-guideway transit systems in the US. Minneapolis-St. Paul and Phoenix have newer light rail systems, while Boston, Chicago, and San Francisco are mature systems dominated by heavy and commuter rail. Additionally, Boston is also home to one of the earlier BRT lines.
Here’s what we found:
Across the study regions, the transit shed outperformed the region as a whole by 41.6 percent. In all of the regions the drop in average residential sales prices within the transit shed was smaller than in the region as a whole or the non-transit area. Boston station areas outperformed the region the most (129%), followed by Minneapolis-St. Paul (48%), San Francisco and Phoenix (37%), and Chicago (30%).
Transit type had an effect on the resilience of property values, which benefited more from transit that was well connected and had a higher frequency of service. Stations with higher levels of transit access saw the most price resilience within and across regions.
No consistent trends have emerged with regards to residential property type. For most property types, the transit shed outperformed the region, and in Boston and Chicago this holds true for all property types.
In addition to more resilient residential property values, households living in transit sheds had better access to jobs and lower average transportation costs than the region as a whole.
The relative stability of property values in areas with transit access has a number of policy implications. It helps to provide consumers and planners with better information, and encourages greater investment in transit and more sustainable development patterns.
Applying to Jacksonville
The results of this study aren't exactly ground breaking. At Metro Jacksonville, we've been sharing this information on a routine basis since our founding in 2006. The main question for Jacksonville is when are we going to decide to take advantage of this national wide trend locally so Jaxsons can reap the financial and economic benefits of mass transit?
Article by Ennis Davis. Contact Ennis at firstname.lastname@example.org.
Study commissioned by American Public Transportation Association in partnership with National Association of Realtors and prepared by the Center for Neighborhood Technology. Information courtesy of American Planning Association (APA) Florida March 31, 2013 eNews & Notes.