Canada's Condominium Magazine
There’s an interesting connection between public transportation and housing. It has long been apparent that people shopping for a home often put proximity to public transit high on their list of priorities for the home’s location. People like the convenience of living close to subways and streetcar lines. Given the choice, many people will take transit when it’s convenient. But to what extent does this preference determine the price of such a conveniently located home?
A new study from the American Public Transportation Association (APTA) and the National Association of Realtors (NAR) in the US says it can quantify the value public transit has for nearby real estate. The study claims that during the last recession, which devastated real estate markets all over America, those residential properties that were located near to public transit performed, on average, 42 per cent better than those that were not.
One of the main reasons people choose homes near transit is because transit gives access to more jobs. The president and CEO of APTA, Michael Melaniphy, said in a statement, “This study shows that consumers are choosing neighborhoods with high-frequency public transportation because it provides access to up to five times as many jobs per square mile as compared to other areas in a given region. Other attractive amenities in these neighborhoods include lower transportation costs, walkable areas and robust transportation choices.”
He added that homes near transit are regarded by homebuyers as the equivalent of beachfront properties, in terms of desirability. The fact that the homes near transit maintained their value in the recession reflects the market demand for such homes.
NAR Chief Economist Lawrence Yun said, “Transportation plays an important role in real estate and housing decisions. . . A sound transportation system not only benefits individual property owners, but also creates the foundation for a community’s long-term economic well being.”
An example of a city where the “resiliency” of real estate in maintaining its value during the recession is Boston. The report says that residential property within half a mile of high-frequency rapid transit in that city (the “transit shed”) outperformed other properties by an “incredible” 129 per cent. (There’s no decimal there: 129 per cent.)
Chicago, San Francisco, Minneapolis and Phoenix had less astounding results, but still outstanding, at 30 per cent, 37 per cent, 48 per cent and 37 per cent respectively.
Public transit provided access to an average of three times more jobs per square mile than in the region at large in all of these cities. Transportation costs were also lower by up to $351 a month for households living in the transit shed.
The conclusion that APTA draws from the study is that stable property values in areas with public transit access “have a number of policy implications,” according to Melaniphy. “As Congress and state and local governments look for ways to accelerate economic growth, this study shows that investing in public transportation is a boon to revitalizing our economy.”
That conclusion may be simplistic, but here in Toronto, most everyone agrees that we need to find new revenues to build more public transit before gridlock, which costs the area $6 billion a year by the commonly used estimate, starts to really damage the economy. Building more transit, and homes close to it, with jobs within a couple of subway or streetcar stops, or even within walking distance, seems such a sensible, civilized solution.