Transit Stops Increase Property Value- But Why?

Sam Staley argues that the increase in property values around transit stations isn't attributable to increased ridership, and in fact the locations with the least investment had the highest ridership.

"For the most part, property values increase around transit stations. Often, the range of the increases is between 25 to 30 percent higher than the growth non-transit neighborhoods. Unfortunately, these same studies about property values have not examined the underlying causes of these price increases. Despite that, many observers simply assume proximity to transit is the most important factor.

Lots of factors influence private investment, including public safety, access to jobs, quality housing, tax rates, financing, and zoning. Access to transit is likely far down the list compared to these other factors.

A closer look at the numbers suggests that actual transit ridership has little relationship to the private investment around transit stations."

Full Story: Ridership no factor in transit-oriented development



Reason Foundation?

I just HATE these guys. Sure, they're entitled to their opinions, but they always manage to title their articles in ways that suck me in...only to be treated to their ridiculous reasoning and thin, thin, thin evidence.

It's entirely possible that the development around transit stops has a more associative than causal link. At least the logic for causation makes some sense, while the logic of developing vibrant downtowns based on cars really does the opposite.

In any case, I'd love to see somebody make a real statistical argument either way. The fact is that there are only about 24 (I think - check systems nationwide, and that includes streetcars and light rail commuter lines. They're also in very different areas of the country, very differently-sized systems, different intentions. For instance, should Cleveland's line that basically shuttles from downtown to Shaker Heights, be lumped in with San Francisco's almost 100 MUNI stops, spread all over the city? Would you include both streetcars and MAXX in Portland? I always used NY's subway the same as I would a streetcar, so where does that fit?

I tried such an analysis last year - to make a link between ridership and public support. What I really learned is that it's pretty hard to generalize.

Social cost of transit

Generally this was a pretty good article but he kind of goes nuts on unsupported statements at the end.

For example: "the individual and social costs of greater dependence on a less flexible, restricted mode of transportation." Presumably the individual cost he's talking about is a time cost because typically using only transit costs an individual less than owning a car. But what are the social costs of transit?

Costs Of Transit

I am dubious about the individual time cost of transit. Note that he is criticizing transit oriented development, which reduces the distances people must travel. On the balance, it could take no longer for someone living in a TOD to get around by walking and transit than it takes someone living in sprawl to get around by car.

The social costs of transit should be obvious: the sort of people who support right-wing think tanks would have to rub elbows with the lower classes - and we can't have that happen, can we?

Of course, we won't even mention the environmental costs of transit vs. the automobile.

Charles Siegel

Some parts seem intuitive

Any time you improve access and allow greater density, land values will increase. This seemed to be his main point and I don't know how that could be reasonably argued. Leave it to those who hate the messenger to conjure up something even if it makes little sense. If you extend a highway and allow 1/4 acre homesites instead of 1 per 10 acres, don't you think land values would rise there too? Is that an argument for building more highways? It seems like that's all he was saying - the rise in property values is not "caused" by TOD, per se, but by increased access and an increase in allowable density.

As for the social costs of transit, don't buses pollute and trains get electricity from coal-burning power plants? Doesn't it take just as long to get from A to B and typically longer using transit? Isn't that a social cost, much like time delays on roads are considered social costs? Transit may accomodate more people per trip, but considering the actual ridership numbers, social costs may be higher than one might think. Staley also may be implying that fixed route transit has a transportation social cost in that it limits where you can travel in most regions. Even in a metro with quite possibly the best transit system like Washington DC, Tyson's Corner, a major job center, can not currently be accessed via train. You either have to drive or use the non-fixed route transit system. One might consider that a social cost of fixed route transit systems - you can't revise it according to growth patterns, you're trying to dictate them.

Independent variable: ridership or TOD?

I'm not about to read the whole article, but I will critique what I see here. It appears that Staley has said that the rise in property values is not "caused" by transit ridership; not that the rise in values is not caused by TOD (as interpreted by contrarianplanner). Increased access and allowable densities are all part of TOD, and by acknowledging that increased access and allowable densities lead to higher property values, he's agreeing that TOD leads to higher values.
Mike Stanger

independent variable: property values

at least that's how I interpreted it. The point being that yes, TOD leads to higher values, but so does any other non-transit ridership factors that allow high density or increase access (roads). He's saying the evidence shows the actual ridership is roughly irrelevant in determining the value increase. Thus, it must be other factors. If one TOD had much more successful ridership numbers and proportonally higher increases in land values than the less successful ones in terms of ridership, then one could probably safely conclude that increased transit ridership indeed does lead to higher values.

Michael Lewyn's picture

an alternative explanation

After reading Staley's article, I couldn't help wondering: is there some correlation between the newness of a transit stop and its property value increase? I would guess that a light rail stop would add more value to a suburb with (previously) weak transit service than it would to a downtown which is already in the center of whatever regional transit exists. But I could be wrong.

Todd Litman's picture

Comprehensive Evaluation of TOD Benefits

Readers may be interested in my recent blog, "Comprehensive Evaluaiton of Transit Oriented Development Benefits" ( ) which discusses Staley's arguements.

That the magnitude of local development and property value increases are not directly related to transit ridership volumes seems of little consequence. Many factors influence the degree to which investment occurs around new transit stations, including the demand, the type, and phasing of development. Local transit ridership is likely to continue growing over time as TODs mature.

Staley shows additional misunderstanding about the roles of transit and transit-oriented development when he states, “Transit follows a fixed-route to specific destinations based on a set schedule. Rail or bus transit is thus frequently an inferior alternative to the flexibility and mobility provided by the customized travel afforded by the automobile.” Transit may be inferior for some trips but superior others: it is sometimes faster, cheaper and less stressful than driving. The beauty of TOD is that individual travelers can choose the best mode for each trip, which is not possible in automobile-dependent communities.

Our family lives in an older urban neighborhood which developed when our city had a streetcar system, and a century later we still enjoy the benefits of highly accessible land use and a multi-modal transportation system. Just about every public service we need is within convenient walking and biking distance of our home, frequent transit service links to other parts of the region, we have carshare vehicles nearby, and excellent taxi service. Vehicle ownership and use are relatively low in this community and new developments in the area can have much lower parking supply than required in more automobile-dependent locations (much of the new multi-family housing has unbundled parking). This provides a variety of economic, social and environmental benefits. Most criticisms of TOD seem to consider only a small portion of these benefits and so undervalue the full benefits of high quality transit and transit-orieinted development.

Todd Alexander Litman
Victoria Transport Policy Institute
"Efficiency - Equity - Clarity"

Spatial Mismatch

The argument may be missing the entire aspect of spatial mismatch.

Everyone recognizes that property values increase around transit stations. So the real question is about the relationship between higher property values and ridership.

Presumably property values increase because there is a greater demand for locations with access to transit. Greater demand, however, does not necessarily translate into greater use. People with less income would typically be more transit dependent, but they may not be able to pay as much as people with greater incomes who value the option of transit, even though they don't use it as frequently.

If there is a pattern of spatial mismatch, it would be worth reevaluating the affordable housing programs in place.

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