Research

Project Number:
04-18

Research Project:
Transit Investment & the Capitalization of Access into Land Values

P.I. Name & Address:
Christian L. Redfearn
School of Policy, Planning, and Development
University of Southern California
Los Angeles, CA 90089-0626
Tel:(213) 821-1364
Fax:(213) 740-0001
Email: redfearn@usc.edu

Project Objective:
The goal of this project is to estimate the economic impact of light rail on real estate markets in the areas surrounding the light rail stations. The introduction of the Metro, Los Angeles' new light rail system will impact travel times asymmetrically, with those locations closest to the light rail stations benefiting most. At issue is the market valuation of these benefits.

There is little convincing empirical work that measures the market value of access to transit investment. This is a significant handicap for transportation planners as any costbenefit analysis that does not include an accurate assessment of the flow of benefits may be substantially flawed. The Metro, Los Angeles Basin's light rail system, offers an excellent opportunity for a careful analysis of benefits by closely following local real estate markets for capitalization of transit access in real estate values. The light rail system covers a diverse set of economic and demographic geographies. Moreover, it has been phased in over an extended period of time. These two dimensions - spatial and temporal - provide sufficient variation in other supply and demand factors to allow for their control and to enable an accurate estimate of the independent effect of transit access on local real estate markets. Two approaches will be employed to estimate this effect. First, indexes of real estate market outcomes will be constructed in order to compare changes across "treatment" and "control" areas - those submarkets proximal to the stations and those that are not, respectively. Second, a more formal hedonic regression analysis will be performed that will explicitly measure the independent impact of distance to the nearest light rail station on real estate outcomes.

Task Descriptions:
1. Develop inventory of light rail stations and dates of approval, construction, operation.
2. Develop inventory of local histories for each of the stations.
3 Gather real estate transaction data.
4. Gather permit data.
5. Gather demographic data.
6. Geocode/integrate data.
7. Undertake index analysis
8. Undertake hedonic analysis.

Milestones, Dates:
January 5, 2004 - January 4, 2005

Total Budget:
$20,000

Student Involvement:
One Student @ 25% time, 6 mos.

Relationship to Other Research Projects:
Related to 99-22, 00-12, 03-24, part of urban mobility focus area

Technology Transfer Activities:
Project report posted on the website

Potential Benefits of the Project:
More effective transit capital investment

TRB Keywords:
Land use impacts; rail transit

Primary Subject:
4b.4 Transportation planning, economics and institutional issues

Goals:
Mobility

Enabling Research:
None

Modal Orientation:
Transit