Transit-oriented, walkable places held real estate values better

A new research paper determined that residential properties near transit stations in five major cities across the US maintained their values significantly better than properties outside of "transit sheds." The New Real Estate Mantra: Location Near Public Transportation (pdf), commissioned by the American Public Transit Association in partnership with the National Association of Realtors, examines the Chicago, Phoenix, Minneapolis-St. Paul, Boston, and San Francisco regions.

"Across the study regions, the 'transit shed' outperformed the region as a whole by 41.6 percent," according to the report, prepared by the Center for Neighborhood Technology in Chicago. The "transit shed" was defined as areas within a half mile of fixed-guideway transit stations, including both rail and bus rapid transit. While the transit sheds performed better than their regions in every region study, the areas outside of the transit shed underperformed.

The higher values in transit sheds ranged from 30 percent in Chicago to 129 percent in Boston. The effect was strongest associated with transit that provides high and frequent level of service. In addition, households living in transit sheds had better access to jobs and lower average transportation costs than their regions region as a whole. The jobs per square mile in transit sheds is two to three times higher. Household transportation costs in transit sheds are $3,600 to $4,200 a year lower compared to the Boston, San Francisco, Chicago, and Minneapolis-St. Paul regions. In Phoenix, those in the transit sheds saved $2,100 a year.

In addition, transit sheds were correlated to much smaller block sizes and higher density. The transit sheds therefore consist of walkable, mixed-use neighborhoods. The higher the walkability, the better the sheds appear to perform. Therefore it could be many factors — access to transit, transit type, walkability, access to jobs, and even lower transportation costs —- that contribute to the superior real estate performance of the transit sheds in recent years.

Overall, there was a substantial decline in real estate values across these regions in the period studied. Residential properties in the transit sheds lost significantly less value compared to their regions. But it's not just the higher values that are interesting, but that the higher values appear to be growing. This report correlates with other research, like that of Christopher Leinberger and Arthur C. Nelson, who report growing demand for walkable, transit-oriented neighborhoods compared to automobile-oriented suburbia.

Another interesting finding is the extent of the superior performance: Forty-two percent aggregate over five major regions during a five-year period is substantial, and that's an understatement. We will cover this research more extensively in coming reports because it deserves more thorough examination. Some of the transit sheds, across many regions, outperformed their regions by hundreds of percentage points. Other transit sheds underperformed their regions. Various kinds of transit correlated differently with property values. For some, but not all, regions, this affect ran across all property types, including single-family. We will examine and try to answer why these systems, types, and areas performed differently.

Stay tuned.

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