Streetcar Transit Premium on Property Values
Valbridge Property Advisors | Kansas City recently conducted a study on the streetcar transit premium on property values and formed an opinion of a market pricing premium due to an announcement of a streetcar line. The streetcar consists of a 2.2-mile route approved for funding in December 2012, with development commencing in 2014. The route connects the Kansas City Riverfront to Union Station with additional routes planned north of the river and south to the University of Missouri – Kansas City. Most transit-oriented developments (TODs) are within a half-mile of a station and have a higher walk score and market demand.
A review of nine studies indicates a “transit premium” due to increased space demand, accessibility, and higher-intensity land use. The premium varies depending on the type of system (commuter vs. light rail), proximity to the transit station (less than ¼ mile has the most significant impact), property type (commercial benefits more than residential), and the economic and regulatory environment of the local market. Although the data varies with methodology and conclusions, there is a strong consensus that proximity to a transit system positively impacts space demand and property values, with a typical “transit premium” ranging from 10% to 40% in the Kansas City market.