Property values near public transit increase
Chicago properties close to public transit are seeing an increase in value, but real estate experts say the cause is more complicated than proximity to trains.
The New Real Estate Mantra study, released March 21 by the American Public Transit Association, found that the value of properties near Chicago Transit Authority and Metra train routes significantly increased in value from 2006–2011, rising faster than the rest of the metropolitan region by 30 percent. The study also found that the values of city properties near CTA and Metra train lines were more resilient to market fluctuations and residents paid less for transit and had greater access to jobs.
“We knew that public transportation can make communities better, and we wanted to see how communities fared in the last recession compared to communities that didn’t have higher frequency public transportation,” said Darnell Grisby, director of public policy and research for the APTA.
Grisby said access to public transit makes for fewer cars on the road, more walkable neighborhoods and an environment that’s more accessible for cyclists.
In addition to Chicago, the APTA compiled data on Phoenix, Boston, Minneapolis-St. Paul and San Francisco, cities that represent a wide sample of the American population and possess both established and developing transit systems, Grisby said.
The study utilized data from census-defined regions based on population and areas sharing commuting habits and property sale prices from 2006–2011. It focuses on zones within a half-mile radius of rail stations and excludes areas of overlap between such zones to prevent double counting. According to the figures, property values in such areas for the entire region were 47.3 percent higher than the rest of the metropolitan region, while the Metra areas were 22.7 percent higher.
“Consumers are choosing these neighborhoods because they have more mobility options, and they have better access to jobs,” Grisby said. “Communities that have attributes like walkability [and] public transportation will be faring much better over the next 30 years because we’re under a demographic shift and a change in preferences as well.”
Downtown Chicago’s population increased by 36 percent from 2000–2010, following a trend of people relocating downtown to save on commuting costs, as reported by The Chronicle April 1. According to the APTA study, the average monthly transportation costs for households in the CTA-adjacent zones was $775, versus $990 in the Metra-adjacent zones region and $1,074 in the entire region.
Jacob Blymiller, a business administration student at Harold Washington College, said he moved into an apartment adjacent to the Morse Red Line station on April 1 because the convenience of living near public transit made it worth the cost of the apartment, even though it was not as well kept as other buildings farther from the stop.
“This was not a luxury apartment, it’s just what it was,” Blymiller said. “[The train] is really not that loud. It’s mostly based on convenience.”
However, the attractiveness of living near public transit is not a significant enough factor to drive up property prices on its own. Instead, the presence of public
transit accompanies other types of economic development because trains and buses have to have a large ridership base to function, said Brian Bernardoni, senior director of governmental affairs with the Chicago Association of Realtors.
“Public transit in and of itself is not a link to property value,” Bernardoni said. “It’s not an A to B relationship. I would have agreed to [that] contention a year ago, but housing prices are stabilizing now. Chicago tends to lag behind the rest of the country.”
The CTA plans to invest $425 million into the renovation of Red Line stops south of Roosevelt Road starting in May, and another $240 million will go to the reconstruction of the 95th Street Terminal, according to CTA Director of Communications and Media Relations Tammy Chase. She said in an email that the improvement of transit would boost economic development in the surrounding neighborhoods.
“Many long-time residents know the value that access to transit has for them, from property values to access to jobs,” Chase said in the email. “The study is a useful tool in continuing to educate the public about the many benefits of transit well beyond getting customers from Point A to Point B safely and reliably.”
Bernardoni said the study is only observing a surface effect of the true cause of stabilizing house prices, which is the recovery from the housing bubble crash in 2007.
“You don’t put rail lines next to places that don’t have ancillary benefits,” Bernardoni said. “Getting [public transit] to go to lower value areas is difficult because they need the ridership. If there aren’t enough people there, the buses will not go there.”