Wednesday, May 29, 2013

Does the MAX increase property values?

There have been many inquiries into how proximity to a light rail or rapid rail station affects values of nearby properties.  
Historically, studies in the Portland, Oregon area show increased property values for properties in closer proximity to light rail stations. San Jose, California showed decreased values most likely due to the excessive noise it produced. Larger cities such as Washington D.C., Boston, San Francisco and New York City all showed increased property values closer distance to rapid rail stations.

The study identified major factors that also have an impact on nearby property values such as zoning, pedestrian walkability, types of destination on the transit line and parking restrictions. I live on the Yellow Line and take it to and from work/school during the week. The Yellow Line has two grocery stores on it, many bars and restaurants, parks/schools and a bowling alley and high density residential buildings are popping up quickly.  It is quickly growing into a very popular area to live and buy property. I decided to do a little research on Zillow to look at property values on the Yellow line and found that it was pretty difficult to determine due to expensive houses in the Overlook/Willamette/bluff areas. However, the high density housing buildings that are being built do have very high property values for the amount of space they contain. One bedroom condos are selling for around $200,000 which is expensive, considering you could buy a house and a backyard for the same amount.

URS did a study that looked at Portland’s Blue Line and its effect over ten years on three nearby homes. Using comparison homes and information from Zillow they concluded that the MAX increased value at a rate of 268% compared to 99% for the comparison homes.

All in all, it’s probably not a bad idea to buy your next home close to transit. More studies need to be done in order to find a significant correlation between property values and MAX lines but I would be willing to be that it’s positively related.

Thanks to Jamin for reviewing.

1 comment:

  1. I find this trend both interesting and a little alarming. While it shows promise for providing financial incentives for buying land and housing along max lines, it also has the potential to create serious equity problems. Those that need transit most are often those that lack other options, and these people will be barred from purchasing transit-convenient homes if property values continue to sky rocket around rail lines.


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