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The thesis is self-evident enough that it hardly merits a study, but the American Public Transportation Association has gone ahead and proven it anyway: People want to live near public transit and will pay extra to do so.
The APTA study, released yesterday, finds that residential real estate in “transit sheds” in five study regions outperformed real estate in the regions as a whole by an average of 41.6 percent between 2006 and 2011. Boston saw the starkest contrast, with transit-proximate homes outperforming the overall region by a whopping 129 percent. The other study regions—-Chicago, Minneapolis-St. Paul, Phoenix, and San Francisco—-saw smaller but still significant price discrepancies between their transit and non-transit areas.
Unfortunately, the study only has these relative figures that make it hard to get a full sense of the real estate trends in these regions. But an APTA statistician was able to break down the numbers further for me. Here are the changes in residential real estate prices in each of the regions between 2006 and 2011:
Transit area: up 2.46 percent
Region as a whole: down 8.6 percent
Non-transit area: down 12.6 percent
Transit area: down 23.1 percent
Region: down 32.9 percent
Non-transit area: down 36.5 percent
Transit area: down 15.6 percent
Region: down 29.8 percent
Non-transit area: down 30 percent
Transit area: down 31 percent
Region: down 48.6 percent
Non-transit area: down 48.9 percent
Transit area: down 25.2 percent
Region: down 40 percent
Non-transit area: down 42.7 percent
Aggregate of these five regions:
Transit area: down 16.9 percent
Region: down 29 percent
Non-transit area: down 32.3 percent
Clearly, it wasn’t a great five years for housing prices anywhere, but they suffered much less in transit areas. As the market now recovers, I expect we’ll see transit-oriented housing continue to outpace its rivals.
Of course, the rising cost of transit-accessible housing causes problems for poorer residents of urban areas. Former Secretary of Housing and Urban Development Henry Cisneros gave a lecture on the country’s housing issues to the Washington Regional Association of Grantmakers yesterday, and this subject was at the forefront of his concerns. There’s plenty of affordable housing being built in the “hinterlands” of urban regions, Cisneros said, but higher transportation costs there offset the cheaper housing.
The APTA study bears this out. In Chicago, the study finds, the average household in the area’s CTA transit shed pays $775 per month for transportation, versus $990 in the Metra transit shed and $1,074 in the region overall. In Boston, the average household in the BRT transit shed pays $636, versus $746 in the rapid transit shed and $1,097 in the region. The pattern for the other areas is similar.
Once upon a time, poor people relied on public transit while rich people drove their cars into the city. Clearly, we don’t live in that world anymore. It’s imperative that as development continues around transit lines, planners make sure to include affordable housing so residents without means are able to get to work without breaking the bank.
Update: Here’s a good counterargument, pointing out that the bubble burst mostly in the exurbs, far from transit, while transit areas were largely more established and less bubbly. Well worth a read.
Photo by leehobbins used under a Creative Commons license