Evidence that Housing Near Transit is a Good Investment
Residential real estate sales prices for properties located near transit are healthier and more resilient than in the broader metropolitan region. That’s the conclusion of The New Real Estate Mantra: Location Near Public Transportation, written by CNT and commissioned by the American Public Transportation Association (APTA) and the National Association of Realtors® (NAR). Although residential real estate prices dropped during the recession in the five regions studied (2006 to 2011 in Boston, Chicago, Minneapolis-St. Paul, Phoenix, and San Francisco), average sales prices for residential properties within walking distance of a heavy rail, light rail, commuter rail, and Bus Rapid Transit (BRT) station outperformed the region by an average of 42 percent.
In Boston, transit-served areas (transit sheds) outperformed the region by a staggering 129 percent. In Chicago, home values in transit served areas performed 30 percent better than the region; in San Francisco, 37 percent; Minneapolis-St Paul, 48 percent; and in Phoenix 37 percent.
Transit type had an effect on the stability of average residential sales prices, 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. In addition to having higher frequency service and better transit connectivity, these stations also tend to be located in areas that are more walkable, have higher residential density, and better access to jobs.
In addition to more stable residential sales prices, data from CNT’s Housing + Transportation (H+T®) Affordability Index showed that households living in transit sheds had better access to jobs and lower average transportation costs than the region as a whole.
“This study reinforces the body of research indicating the benefits of robust, convenient, and affordable transit systems,” said CNT President Scott Bernstein. “What we see here is that residential proximity to transit not only reduces costs of living and lowers environmental impacts, it also translates to stronger household, municipal and regional economies.”
“Stable property values in areas with public transit access have a number of policy implications,” said APTA President and CEO Michael Melaniphy. “As Congress and state and local governments look for ways to accelerate economic growth, this study shows that investing in public transportation is a boon to revitalizing our economy.”
“We are excited to be able to present this initial research, and look forward to expanding it with further analysis using more datasets in more places,” said Bernstein. “This research has the potential to uncover the full value of transit on commercial and mixed use properties, as well.”
The New Real Estate Mantra: Location Near Public Transportation builds off of CNT’s groundbreaking research and publications on issues related to Transportation & Community Development, and Transit-Oriented Development.
A few notes on the method:
- Transit station zones may be overlapping, due to proximity of transit stations. Transit sheds are the aggregate area covered by all transit zones. As a result, transit sheds are not an average of all transit station zones.
- While individual zones may overlap, properties are not double-counted in the transit shed.
- The Employment Access Index provides a measure of the quantity and proximity of jobs to a given place, not a simple measure of jobs per square mile.
- This examination of sales prices of all residential property types in aggregate provides an overall picture of how all residential sales activity contributes to the economy. This is a valuable reference for understanding the potential for value capture, tax revenue, and local investment.
- Averages sales prices, where available, are also broken out in the report for single-family, town homes, condos, and apartments.