Light Rail Reduces Property Values

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.

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5 thoughts on “Light Rail Reduces Property Values

  1. Dave Brough

    On the face of it, 7.3 mph is agonizing slow, but factor in the walk to and from, the wait and transfers, and it’ll drop like a rock. For instance, to get from the 19 miles from my residential home in Las Vegas to the local university (UNLV), I’m faced with a one-hour ( 2.7 mi) walk and long 3 traffic lights just to get to the closest stop. Then, and not counting the hour lag between buses, it’s 2 hours with three transfers, followed by a last 21-minute walk. By car, it’s all of 19 minutes. I’m cheating, of course, by not adding the 5-minute walk from the parking garage.
    While my circumstances may be a bit extreme, the fact is, there are factors that will lower those ‘average’ speeds considerably.

  2. Maddog

    Rail transit is never what it advertises itself as . . .

    http://www.maddogslair.com/blog/rail-transit-is-never-what-it-advertises-itself-as

    . . . it is a net negative, a transit mode which slowly trundles from nowhere to nowhere moving no one, ever all at the high possible cost.

    I wrote about part of this recently:

    http://www.maddogslair.com/blog/pikers-portlandia-gottcha-beat-every-which-way-to-sunday

    Here I discussed the cost problems, and resulting automotive gridlock.

    “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.”

    Now even more wishful thinking, and light rail favorable canards fall to reality, property values do not rise because the property is near a light rail line, in fact, they fall. One problem is they provide little accessibility benefit due to the fact they are incredibly slow. “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.”

    Here in Portlandia, there is a whimsical idea that we need to build light rail (or commuter rail, etc.) lines tying far outlaying areas into the Portlandia transit grid. But the problem is these rail transit modes move so slowly that it makes a commute onerously long. Years ago I work in two different distant locations, but kept my Portlandia home base, St. Helens, Oregon, and McMinnville Oregon. Coincidently, both St. Helens and McMinnville were a commute of about 33 miles. By car this took about 45 minutes to one hour, each way depending upon time of day, and traffic. By light rail, however, commute time would be a minimum of 2 hours and six minutes, or double the time for commuting by personal auto. This does not take into account the fact that it is highly unlikely that the rail line would actually have a stop right at my employment location in either St. Helens, or McMinnville. So, I really should add on a walk at both ends of at least 15 minutes, and since light rail does not go near my home, I need to add a walk to the bus, the bus ride, and the transfer time.

    http://www.debunkingportland.com/cars-vs-transit.html

    A representative transit trip would be between 1408 NE Edgefield St, Hillsboro, OR 97124, and the Gresham Transit Center, a trip of 33.4 miles which would take about 2 hours and 6 minutes, and then would need to have about 15+ minutes added to each end since walking to the transit mode stop, and from the stop to the destination is de rigueur.

    Autos are also cheaper to operate per passenger mile than are low cost transit modes like bus. Autos also emit less CO2, use less energy, and are more convenient than transit. In order to understand these issues correctly we would need a construction to demolition accounting of fuel use, energy required, CO2 emitted, pollutants emitted, etc. all divided by total passenger miles to bring the figures into a bite sized understandable, equatable form. It is clear that the average auto used in America today would be superior in all of these issues than transit, with minor exceptions for transit in New York City, and perhaps a few sporadic bus lines in various cities around the country.

    http://www.debunkingportland.com/cars-vs-transit.html

    Light Rail Does Not Save Energy

    “The average light rail line uses energy equivalent to cars that get 23-28 mpg. Already many cars use less energy than light rail, and new (2012) cars must get 33.8 mpg (39.5 mpg by 2016). So the average new car is already mandated to use less energy than light rail and by 2016 they will use 18-32% less energy than light rail.

    (http://www.epa.gov/oms/climate/regulations/420f10014.htm and Transit from National Transit Database, see, http://www.portlandfacts.com/top10bus.html)”

    http://www.debunkingportland.com/light_rail-bridge_fact_sheet.html

    This discounts the fact that measuring electric rail energy used occurs at the end user, not at the input power station. Due to line loss, inefficiencies, and other losses, the amount of energy measured at the end is not remotely similar to the input energy needed to deliver that amount of energy. With the auto the input energy is the fuel, and the input energy power station is the engine, so we are measuring fuel use from different points, in a manner which makes the fuel use of light rail look better and auto look worse. While I do not know the difference, or losses associated with power plant to light rail energy use, it would not continue to equate to 23-28 mpg. It would be substantially less efficient, and more costly.

    Rail advertises itself as low cost, high capacity, low polluting, fast, and easy transportation for the masses. It is none of these things, it is quite the opposite. Even bus no longer fits the bill. But the combined transit agency now provides perhaps the worst possible blend of insanely high costs (although not paid for by the user, so it looks low cost), high polluting, high carbon emitting, slow, difficult, and annoying transit forced on the masses.

    I do not need a transit/drive planner to figure out how to get from place to place, but I do if I ride transit, the difficulty is exponentially greater than driving, the time is at least double, and frequently more, the real costs are far more than double (but other people pay for all but 18-20% of those costs), the carbon used it much more, and the pollutants more. Why do we even allow these things to operate?

    The self drive car will quickly make the auto even more efficient, by reducing the weight of the vehicle, lowering the horsepower to weight ratios, increasing fuel efficiency, and becoming nearly pollution free, since they will increasingly be likely to use compressed Natural Gas, or electricity to operate (yeah, electricity is not what it is cracked up to be, I know, I know). How far off can Hybrid CNG vehicles be, and they will most surely be lower polluting/lower CO2 than nearly every other vehicle, even electrical vehicles.

    It is time to stand back, stop the transit madness, and begin to understand that we are about to enter a new transportation paradigm. The first thing we need to do is stop planning, and building rail transit. It has not become significantly more efficient in the past 30 years, while autos have, and the new self drive autos will only up this game. Sinking cost in antiquated 19th century technology is a terrible idea, so let’s stop – NOW!

    Mark Sherman

  3. CapitalistRoader

    Hybrid CNG/electric car really are a good fit for AVs. Range is the downside for CNG but with AVs being initially exclusively local and with automated refilling the range problem goes away. And we seem to just keep finding more and more natural gas all the time.

  4. Frank

    So glad to be somewhere without traffic or light rail. Whether or not LRT reduces property value, in Seattle it’s a demonstrable fact that LRT raises vehicle licensing fees. I would have paid four times as much in registration fees in Seattle as I just did for my car in another area. At least a third of that fee in Seattle goes to LRT or to something other than roads.

    Freedom is not living in a large Left Coast city.

    Happiness is seeing the Space Needle in your rear-view mirror.

  5. prk166

    I’m curious what the body of evidence is. I’m not aware of a single study that claims causation. In the past when I’ve poked around they observe a correlation in residential areas near a station.

    This one from the UofM is a good example: http://www.cts.umn.edu/sites/default/files/files/sessions/21cao.pdf

    I’m also not aware of any studies that try to see if this development that occurs near the stations means other areas don’t experience the development they once were. For example, did the housing bubble popping kill the hint of a turn around for Dayton’s Bluff neighborhood? Are the people who were fixing up old houses there now off in Frogtown doing the same?

    That is, does this actually change overall wealth in the metro? If it does not, then any price increases we’re seeing around the stations means lesser or a lack of demand someplace else.

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