Rail advocates love to claim that light rail and streetcars increase nearby property values even if hardly anyone rides them. According to their theory, the permanence of the rail line gives developers and potential buyers or tenants a sense of security that transit will be there when they need it.
This isn’t true in the case of the Norfolk light rail, a.k.a., the Tide. According to a study by economists at the Cleveland Federal Reserve Bank, Norfolk’s light rail actually reduced property values.
Rail transit, notes the study, could increase values because “homeowners could benefit from increased accessibility and transit related economic development.” On the other hand, “homes in a close proximity to rail transit could experience disamenity effects from crime, noise and parking issues.” Whatever the cause, the study found that “properties within 1,500 meters experienced a decline in sales price of nearly 8 percent.” At least in this case, the study concluded, “accessibility benefits do not outweigh apparent local costs.”
In fact, there is little reason to think that “accessibility benefits” from light rail or streetcars are enough to boost property values. The problem is that these forms of rail transit go almost nowhere very slowly.
Denver is spending billions of dollars building more than 100 miles of rail lines. When all the lines are done, promoters project they will reach just 26 percent of the region’s jobs. Since most people won’t live near a rail line, only about 2 or 3 percent of commuters are likely to use it.
Even most of the people who live near it won’t ride light rail because it is so slow. According to the American Public Transportation Association’s Transit Fact Book, the average speed of light rail is 15.6 mph while streetcars average just 7.3 mph. Not much accessibility benefit there.
So it is no surprise that the Norfolk light rail doesn’t benefit local property owners. The good news is that Virginia Beach residents voted not to expand it last month. The bad news is that the transit agency wants to expand it anyway and will no doubt try again despite the lack of benefits.