Is the Light Rail “Tide” Lifting Property Values? Evidence from Hampton Roads, Virginia
||Original Paper: WP 16-26|
In this paper we examine the effect of light rail transit on the residential real estate market in the metropolitan region of Hampton Roads, Virginia. Norfolk’s light rail system, the Tide, began operations in August of 2011 and has experienced disappointing levels of ridership compared to other light rail systems. We estimate the effect of the Tide using a difference-in-differences model and consider several outcome variables for the residential housing market, including sale price, sale-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 sale price of nearly 8%, while the sale-list price spread declined by approximately 2%. 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-differences.
JEL classification: R3, R4.
Suggested citation: Wagner, Gary, and Timothy Komarek and Julia Martin, 2017. “Is the Light Rail ‘Tide’ Lifting Property Values? Evidence from Hampton Roads, Virginia,” Federal Reserve Bank of Cleveland, Working Paper no. 16-26r. https://doi.org/10.26509/frbc-wp-201626r.