In theory, property values should be rising around The Tide’s 10 transit stops in Norfolk. Has anyone studied this? Has it happened? Are renters being displaced?
Speaking of the economics of mass transit (see previous post)… The good news is that residential property prices are surging around mass transit stations. In the clearest of possible signals, the marketplace is telling us that there is strong demand among large swaths of the American population for access to mass transit service. People are willing to pay a lot more for the convenience.
The bad news (there had to be a downside) is that affluent Americans are displacing poor and working-class residents from transit-accessible housing. Thus, the population that relies upon transit the most has less access than before, the Wall Street Journal today. Writes the Journal:
Professors at Northeastern University in Boston examined 42 neighborhoods in 12 U.S. cities in 2010 and found that housing costs near rail stops increased after light-rail service started in many markets. “A new transit station can set in motion a cycle of unintended consequences in which core transit users…are priced out in favor of higher-income, car-owning residents,” the authors wrote.
The Journal focused on Rainer Valley, a racially mixed neighborhood in Seattle.
Rainier Valley … had a median per-capita income roughly 40% below the citywide median from 2007 to 2011, census figures show. But the announcement of the rail-line route, in 1999, and its launch 10 years later boosted rents in the area. A report by the Puget Sound Regional Council shows assessed values for certain parcels around one Rainier Valley station rose by an average of 513% since 1999.
Part of that increase, the Journal acknowledges, can be attributed to the construction of new, high-end apartment buildings that pushed the average rent higher without displacing anybody. Still, rents are rising in other Rainer Valley apartment buildings as well.
Bacon’s bottom line: One predictable set of responses to this dilemma would be to impose rent controls, force developers to provide low-rent “workforce” housing as a condition for building, or impose some other command-and-control solution. There is a less obvious alternative, however. Loosen zoning codes and other restrictions that make it difficult for developers to build around transit stations! Insofar as the displacement of transit-dependent residents is a function of housing shortages caused by surging demand and restricted supply, the answer is obvious: Allow more supply.
A second critical point: If you want to build more mass transit, rising property prices suggest a way to pay for it without bilking taxpayers. Create a special taxing district around the proposed station, issue bonds backed by revenues from that district, and increase density around the station. Property owners will come out winners, taxpayers won’t get stuck with the tab for the improvement, and citizens will enjoy a transportation option they did not have before.
— JAB
