Monday, 30 January 2017

Can bicycle and transit investment increase home values?

Wei Li, Texas A&M University, USA

Kenneth Joh, Metropolitan Washington Council of Governments, USA 

Efforts to coordinate bicycling and transit use have garnered attention among US planners in recent years.  The proliferation of bike sharing programs such as Washington DC’s Capital Bikeshare combined with ambitious investments in on-street bike lanes and bike paths reflect a coordinated effort to integrate bicycling with existing transit networks.  The marriage of bicycling and transit can help solve the first and last mile problem by improving access to transit stations, which could increase ridership for both modes.   

Among millennials and young professionals in particular, bicycle and transit friendly neighborhoods are especially attractive as they are more likely than others to give up their cars.  Their preference for “green” modes is reflected in the growing demand for housing in these neighborhoods, particularly in urban settings.  While the environmental and public health benefits of bicycling and transit have long been recognized by planners, the synergistic impact of bicycle-transit integration and property value premiums attributed to these impacts is not well understood.  

Our article addresses this gap by assessing the property value impact of neighborhood bikeability, transit accessibility, and their synergistic effect by analyzing 3,495 condominium and 12,149 single-family property sale transactions from January 2010 through November 2012 in Austin, Texas (USA).  Bike Score and Transit Score are used as indices to measure neighborhood bikeability and transit accessibility, respectively, and we assess the residents’ willingness to pay to live in bike/transit friendly neighborhoods, controlling for various sociodemographic and built environment factors.    

We first estimated the direct effects of bicycle and transit accessibility on property values independently.  Keeping all structural and neighborhood characteristics constant, a one percent increase in Bike Score increased condominium property values by 0.30 percent and single-family property values by 0.03 percent; a one percent increase in Transit Score increased property values of condos by 0.39 percent and 0.10 percent for single-family homes.  In sum, the independent effects of increasing bike and transit accessibility were small but significant.       

We then examined the synergistic effects of bicycling and transit on property values.  For the sake of simplicity, we report only the total effects translated into dollar values in this blog. 
On average, a one percent increase in bikeability translated into the following increases in property values in neighborhoods across varying levels of transit accessibility:

Poor transit access: $67.59 for condos, $173.28 for single-family;
Good transit access: $1,030.77 for condos, $1,000.92 for single-family;
Excellent transit access: $3,900.46 for condos, $2,054.23 for single-family. 

Similarly, on average, a one percent increase in transit accessibility raised individual condominium (or single-family) property values by $509.18 (or $88.86 for single-family) if minimal bike infrastructure is available, compared to $1,329.92 (or $2,080.32 for single-family) if the neighborhood bikeability level allows daily errands to be accomplished by biking.

Our results show that high-quality bicycle and transit investments have the potential to increase property values for both condominium and single-family housing markets. In neighborhoods with good transit service or better, investing in bicycle infrastructure would yield a much greater payoff in terms of property values of both housing types compared to neighborhoods that are not well-served by transit.  The effects would behoove policy makers to pursue the coordination of bicycle master plans with regional transit plans and consider strategies of spatially-joint bicycle and transit investment. Such plans and strategies are not only for economic benefits in terms of property values and tax revenues which could be used to make further improvements to bicycle and transit systems, but also to promote increased public health, transportation options, and social equity.

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