How Public Perception of Light Rail Influences Its Economic Benefits
The River Line of New Jersey Transit opened in 2004. The line, which is considered light rail but also kind of functions as a commuter rail, serves 20 stations in the intercity Trenton-Camden corridor. The state-funded project cost about $1.1 billion to construct and was sold to the public largely through anticipated economic benefits to the main two cities and the area along the line.
Transit advocates can point to a long list of empirical research showing the developmental benefits of light rail systems. A fairly recent study of light rail in Portland found that plans for the system encouraged high-density, transportation-oriented development in the station areas. Other work done around that time, looking at light and commuter rail in Santa Clara, found clear premiums for commercial land near the stations. More recent research on light rail in Buffalo documented a 2 to 5 percent premium on home values near a station as well.
A new study by of the River Line, led by Daniel Chatman of Berkeley, paints a more complex picture of light rail benefits — at least with regard to home values. In the February issue of Urban Studies, Chatman and colleagues report a "neutral to slightly negative" impact of the Trenton-Camden light rail on the corridor's housing market. One reason for the less sanguine results is that while home values did tend to rise after the line was complete, they fell during the period of its construction, partly out of (unsubstantiated) fears of increased crime and noise:
The River Line may have had positive effects on property appreciation after it started operating, but that these effects did not generally make up for property depreciation that occurred after groundbreaking and prior to operation. The negative groundbreaking effects could be partly due to construction impacts and partly due to buyer anticipation that the River Line would cause crime and traffic to rise near stations. Operation effects appear to have been mostly positive, as properties regained some of the lost value after the line began operating, suggesting these fears were proven partly untrue once the line started to operate.
The researchers measured economic benefits to the corridor (or lack thereof) through changes in home values. While many studies simply compare residential values before and after the opening of a rail line, Chatman and colleagues examined them at two distinct time periods: first between the line's groundbreaking and its completion (from 2000 to 2004), then once it became operational (after 2004). They took special note of whether or not proximity to the station influenced any changes in value.
Turns out that time distinction makes a major difference. In one analytical model, the researchers found that properties sold after groundbreaking depreciated between 8 and 15 percent from the station to 3 miles away, with a smaller loss of a little more than 2 percent for homes 4 to 5 miles out. On the other hand, properties sold after the River Line went into operation rose in value 12 to 14 percent within a half-mile of the station, about 11 percent from a half-mile to a mile out, and roughly 5 percent from 1 to 4 miles out.
Taken on average, however, those results are hardly positive. All told, the fluctuations amounted to no statistical change in value for properties up to 1 mile out, and a loss of 3 to 5 percent in value for those homes 1 to 4 miles out.
The researchers made some other interesting findings as well. Using another data model, they determined that low-income properties within a quarter-mile of River Line stations appreciated 35 percent on net, but that those gains were offset by a negative effect on properties 2 to 3 miles away. Once again, on sum, the economic benefits were pretty neutral. In this case, the gains near the station may simply have been "redistributed" from losses farther away from the station, the authors report.
But the diverging outcomes for the pre- and post-completion home values remain particularly intriguing, because they highlight the role of public perception on the economic benefits of light rail (and, perhaps, transit more generally). Before the River Line was finished, residents of the Camden-Trenton corridor expressed concern about its potential negative effects on their communities. Some feared the line would "invite desperate criminals from downtrodden Camden to plunder the suburbs," according to a Philadelphia Inquirer article from 1995, when the line was still under consideration.
Such expectations may well have played a role in the pre-construction depreciation of home values near the line, the authors report:
More explicitly than past studies of this kind, our study suggests an important influence upon the land market of public and media perceptions of the planning, construction and implementation process.
Concern that light rail generates crime is nothing new in urban America, but it remains wildly out of proportion with the available evidence. As we've shown before, the best recent research suggests that crime may even decrease along a new light rail corridor. The changes that may follow a major transit project can seem frightening, but if the negative perceptions of rail do influence economic outcomes, then it's the changes that follow this fear that should really scare us.
Top image: New Jersey's River Line (Flickr user K_Gradinger, used under a Creative Commons license).