[sustran] Transportation investments and real estate values

[Todd Litman]

At 10:57 AM 6/18/99 +0200, Eric Britton wrote:
>Robert Ayres of the Center for Environmental and Resource Management is
>attempting to develop some statistical information and background on this
>topic and has asked me for leads. The idea of course is simple enough --
>someone invests in transportation improvements in a given area and, maybe,
>real estate values go up.  Sounds logical, but does anyone know where he can
>turn for some statistical evidence of what actually happens in some cases.

Check the urban economics literature, which is based on the assumption that
transportation improvements increase property values. There are lots of
studies that back this up in general, although the effects of additional
highway capacity appear to be decreasing since most areas already have
adequate roadway access. If there is really a lack of suitable land for
development and lack of highway access is really a constraint on access to
that land, a highway is probably going to increase property values. But if
demand is weak or the highway provides only marginal transportation
improvement, there may be little effect on real estate values.

The report by the Standing Committee on Trunk Road Assessment, Transport
Investment, "Transport Intensity and Economic Growth," DETR (London;
http://www.roads.detr.gov.uk/roadnetwork/heta/sactra98.htm), 1997,
concluded that most economic impacts (such as changes in property values)
are economic TRANSFER not true economic BENEFITS. Thus, a dollar gained in
one community is a dollar lost somewhere else in the region.

Note that the same effects are true of transit improvements. See Herman
Huang, "The Land-Use Impacts of Urban Rail Transit Systems," Journal of
Planning Literature, Vol. 11, No. 1, August 1996, pp. 17-30 and Steven
Lewis Workman and Daniel Brod, "Measuring Neighborhood Benefits of Rail
Transit Accessibility," Transportation Research Record 1576, 1997, pp.
147-153.

Also see:

Amy Helling, "Transportation and Economic Development; A Review," Public
Works Management & Policy, Vol. 2, No. 1, July 1997, pp. 79-93.

Marlon Boarnet, "New Highways & Economic Productivity: Interpreting Recent
Evidence," Journal of Planning Literature, Vol. 11, No. 4, May 1997, pp.
476-486.

Nijkamp and Blaas, Impact Assessment and Evaluation in Transport Planning,
Kluwer, 1993, p. 45-49. 

Christine Kessides, The Contributions of Infrastructure to Economic
Development, World Bank Discussion Paper #213 (www.worldbank.org), 1993. 

Piet Rietveld, "Spatial Economic Impacts of Transport Infrastructure
Supply," Transportation Research, Vol. 28A, No.4, p. 339.