Impacts of light rail on property values vary by distance and income level
A new study on the economic effects of New Jersey’s River Line light rail system has shed some light on the complex relationship between transportation infrastructure and the housing market. Previous research in Portland, Santa Clara, and San Diego has shown that there is a general increase in the value of both residential and commercial properties in close proximity to light rail.
However, this new study, led by David Chatman of UC-Berkeley, reports a “slightly negative or at best, neutral” impact on residential properties within four miles of the stations. The study found that there was significant depreciation in property values during the construction phase, which was at least partially offset by increases in values after the line went into operation. Impacts on property values varied based on distance from the station and between low vs. higher income neighborhoods.
The study differs from others, which have compared residential values before and after the opening of a rail line, in that it looks at the construction phase. The researchers found that properties sold after groundbreaking within three miles of the station depreciated between 8 and 15 percent due to fears of construction impacts (e.g. dust and noise) and increased crime. However, properties sold after the River Line went into operation rose in value 12 to 14 percent within a half-mile of the station, about 11 percent from a half-mile to a mile out, and roughly five percent from one to four miles out. There is also research to suggest that transit stations actually decrease crime in their immediate neighborhoods.
The study highlights the more localized economic effects of the light rail system. Low-income properties within a quarter mile of River Line stations appreciated 35 percent on net, but those gains were offset by a drop in higher-income properties two to three miles away. Redevelopment of both commercial and residential properties near the stations is also increasing. These results provide an interesting opportunity for transit managers and planners to consider the varied effects new transportation infrastructure may have on different types of surrounding properties.