A longitudinal analysis of the effect of public rail infrastructure on proximate residential property transactions

Abstract

Value capture offers the promise of recouping the additional value that public transportation infrastructure investments confer to local property. The totality of the empirical evidence supports the contention that such investments do indeed add value to proximate residential property. However, little research to estimate just how much any additional property value changes from year to year is evident in the empirical literature. The absence of evidence on the reliability of accessibility premiums is problematic from a policy perspective because transit operators need dedicated sources of funds to compensate for the retrenchment of government sources. Adoption of a multilevel approach expands the temporal scale of analysis to more than a decade and the spatial scale of analysis to an entire heavy rail system, Metro in Washington, District of Columbia (DC), in order to estimate just how much accessibility premiums change year over year. Results advance the state of knowledge on value capture since public rail infrastructure adds property value across an entire heavy rail system, but the additional value is modest and the year-to-year changes are dramatic. Overall, a strategy to capture any additional property value to fund public transportation may technically qualify as a dedicated source of funds, but it is not a reliable source of funds.