What are the potential upsides and downsides to a metro area’s investing in a light rail system?
As appeared in the Cleveland Fed Digest's Ask the Expert
There’s potential for noise, more people, crime. Upsides can include reduced traffic congestion and eased parking problems. Most studies of light rail have found residential property near light rail increases in value. Our research found the opposite. We compared before and after sales prices of properties close to rail stations in Norfolk, Virginia, and properties similar to them farther away from the stations. The values of the properties nearer to the stations decreased in value by about 8 percent following the light rail system’s opening in 2011.
One question to ask before developing a new transit system is “will the system’s destinations still be employment centers 20 years from now?” Nowadays, places don’t necessarily have one business core. And light rail systems are somewhat inflexible. A more flexible transportation system is busing. If you have $50 million to spend, the question is what’s the most effective way to increase mobility? Mobility is a huge issue, especially for the low- and moderate-income communities that don’t have the transportation they need to access jobs.
People tend to think that when something is successful in one place you should replicate it in other places. I think our research shows things are more nuanced than that. In the case of Virginia, you have a region that is not very dense in terms of population, and the time to travel from place to place is not very high; the commute wasn’t awful. In places like Washington DC and New York and even Charlotte, you’ve got a lot more density, and transportation times are a lot higher; so those are the areas where property values increased along public transit lines.
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