Residential property values are higher along the Green, Blue, and Northstar rail lines. That was the upshot of a recent study conducted by the National Association of Realtors and the American Public Transportation Association.
Properties near rail stations are worth 4 percent more than similar properties farther away from transit lines, according to the study. The higher property values translate to higher rental costs, too: The cost of renting is about 7 percent higher at properties near rail stations.
The study also looked at how light rail and bus rapid transit–two kinds of fixed-guideway transit—affected properties in six other major metros between 2012 and 2016. Of the seven areas, the Minneapolis-St. Paul region actually saw the lowest boost to residential property values. Eugene, Ore., saw the greatest uptick in property values at 24 percent, with Phoenix following at 16 percent.
The Twin Cities’ lower-density housing might explain the difference in property values, said David Arbit, director of research and economics for the Minneapolis Area Realtors.
“[The rail lines don’t] cut through Northeast, or St. Louis Park, or Richfield—some of these hot and high-flying markets,” Arbit said. But cities like Boston, Los Angeles, and Seattle put transit lines “through the uptowns where they knew riders would use it,” he added.
Minneapolis and St. Paul were the only Midwestern cities sampled, and Arbit said that might help explain why the property value differences weren’t as high in the Twin Cities compared to the six others. “The Midwest is functionally different—it’s qualitatively different—than how things behave on the coasts,” he said.
The study, titled “The Real Estate Mantra – Locate Near Public Transportation,” was conducted by the Center for Neighborhood Technology. The study compared residential and commercial sales data, as well as residential rents, between 2012 and 2016.
Transit lines had an impact on access to jobs, too. The report found a total of 458,791 jobs accessible within a 30-minute commute from home for people living in the Twin Cities’ “transit shed,” which is an aggregation of properties within a half-mile radius of fixed-guideway transit stations.
For comparison, people in the seven-county metro area outside the transit shed had 144,398 jobs accessible within a 30-minute commute from home.
Between 2012 and 2016, rental prices near Twin Cities fixed-guideway stations increased by 8 percent compared to a 1 percent increase at properties not near those stations.
“An increase in residential rents within transit sheds has encouraged developers and frustrated consumers,” the report’s authors wrote. “Increases in rents were between 2 and 14 percentage points higher in the public transit station area than in neighborhoods away from transit. Cities will need to keep working on housing affordability and land use policies to mitigate displacement from high-value public transit.”