Is the Light Rail “Tide” Lifting Property Values? Evidence from Hampton Roads, Virginia
||Revisions: WP 16-26R|
In this paper we examine the effect of light rail transit on the residential real estate market in Hampton Roads, Virginia. The Norfolk Tide light rail began operations in August 2011 and has experienced disappointing levels of ridership over its first four years of operations. We estimate the effect of the Tide using a difference-in-differences model and consider several outcome variables for the residential housing market, including sales price, sales-list price spread and the time-on-market. Our identification strategy exploits a proposed rail line in neighboring Virginia Beach, Virginia, that was rejected by a referendum in 1999. Overall, the results show negative consequences from the constructed light rail line. Properties within 1,500 meters experienced a decline in sales price of nearly 8 percent, while the sale-list price spread declined by approximately 2 percent. Our results highlight the potential negative effects of light rail, when potential accessibility benefits do not outweigh apparent local costs.
Keywords: light rail transit, housing market, difference-in-difference.
JEL classification: R3, R4.
Suggested citation: Wagner, Gary, and Timothy Komarek and Julia Martin, “Is the Light Rail “Tide” Lifting Property Values? Evidence from Hampton Roads, Virginia,” Federal Reserve Bank of Cleveland, Working Paper no. 16-26.