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Fading premiums: The effect of light rail on residential property values in Minneapolis, Minnesota

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  • Pilgram, Clemens A.
  • West, Sarah E.

Abstract

This study uses property-level repeat sales transaction data to test for the presence of a premium for single-family homes within half a mile of stations on the METRO Blue Line in Minneapolis, Minnesota. Using a difference-in-differences approach, we find that the premium for station proximity varies substantially depending on control group and period definitions for “after” light rail. Using homes in the rest of Minneapolis as controls yields growing positive premiums from proximity to light rail stations, while using homes in neighborhoods similar to those near stations yield smaller premiums that fade to zero over time.

Suggested Citation

  • Pilgram, Clemens A. & West, Sarah E., 2018. "Fading premiums: The effect of light rail on residential property values in Minneapolis, Minnesota," Regional Science and Urban Economics, Elsevier, vol. 69(C), pages 1-10.
    • Handle: RePEc:eee:regeco:v:69:y:2018:i:c:p:1-10
    DOI: 10.1016/j.regsciurbeco.2017.12.008
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    References listed on IDEAS

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    Cited by:

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    3. Peng, Ying & Tian, Chuanhao & Wen, Haizhen, 2021. "How does school district adjustment affect housing prices: An empirical investigation from Hangzhou, China," China Economic Review, Elsevier, vol. 69(C).
    4. Delmelle, Elizabeth C., 2021. "Transit-Induced Gentrification and Displacement: The State of the Debate," SocArXiv 5ka2g_v1, Center for Open Science.
    5. Peng, Ying & Tian, Chuanhao, 2022. "Removal and reconstruction: Multi-period price effects on nearby housing from urban village redevelopment," Land Use Policy, Elsevier, vol. 113(C).
    6. Tian, Chuanhao & Peng, Ying & Wen, Haizhen & Yue, Wenze & Fang, Li, 2021. "Subway boosts housing values, for whom: A quasi-experimental analysis," Research in Transportation Economics, Elsevier, vol. 90(C).
    7. Kadek Ayu Vergianti Agustini & Sarah E. West, 2023. "Redevelopment along arterial streets: The effects of light rail on land use change," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(4), pages 891-930, July.
    8. Schmidt, Adam & Bardaka, Eleni & Thill, Jean-Claude, 2022. "Causal, spatiotemporal impacts of transit investments: Exploring spatial heterogeneity from announcement through long-run operation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 161(C), pages 151-169.
    9. Zachary T. Keeler & Heather M. Stephens, 2023. "The capitalization of metro rail access in urban housing markets," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(3), pages 686-720, May.
    10. Nilsson, Isabelle & Schuch, Johanna C. & Delmelle, Elizabeth C. & Canales, Kristine L., 2020. "Should I stay or should I go? A survey analysis of neighborhood change and residential mobility concerns around new light rail stations in Charlotte, NC," Journal of Transport Geography, Elsevier, vol. 86(C).
    11. Seunghoon Kim, 2020. "The Social Justice Impact of the Transit-Oriented Development," Societies, MDPI, vol. 11(1), pages 1-19, December.
    12. John Murray & Eleni Bardaka, 2022. "Evaluating the spatial and temporal distribution of beltway effects on housing prices using difference-in-differences methods," Transportation, Springer, vol. 49(6), pages 1963-1998, December.
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    16. Zhang, Min, 2023. "Value uplift from transit investment-Property value or land value? A case study of the Gold Coast light rail system in Australia," Transport Policy, Elsevier, vol. 132(C), pages 88-98.

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    More about this item

    Keywords

    Light rail; Public transit; Property values; Repeat sales; Difference-in-differences;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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