Oh, the Places You'll Move: Urban Mass Transit's Effects on Nearby Housing Markets

The primary objective of this dissertation is to examine the externalities associated with LRTs during its the construction and operations phases. In particular, three areas of concern are addressed: (1) The effect that proximity to LRT stations

have on nearby single family residences (SFRs) throughout the LRT life-cycle; (2) the effect that directional heterogeneity between LRT stations, the central business district (CBD), and the SFR; and (3) the longer term effects on nearby populations due to LRT operations. To answer the first two research objectives, quasi-experimental spatial econometric models are used; to address the last objective, a-spatial fixed effects panel models are developed. The analyses primarily relies on SFR sales data from 2001-2019, publicly available geographical information systems data, as well as demographic data from eight 5-year American Communities Surveys (ACS). Charlotte, NC, a medium-sized US city, is chosen as the site of analysis, both due to the relative novelty factor of its LRT in the region and data availability.

The results show that SFR values are positively associated with proximity to LRT stations in the announcement and construction phases but negatively associated with proximity to stations once the LRT is operational. Additionally, potential homeowners with prior experience with LRT do not behave any differently than potential homeowners with no prior experience with LRT in terms of willingness to pay to live a certain distance from LRT stations. Further, directional heterogeneity is shown to be a statistically significant source factor in deciding the extent to which house-buyers are willing to pay to be near LRT stations. Lastly, distance from LRT stations are found to have no statistically significant effect on changes in the racial composition of nearby areas but have significant positive effects on educational attainment and average median incomes of residents living in nearby areas over time.

The contributions of this research are twofold. First, in addition to highlighting the need to use spatial econometric methods when analyzing the effect that LRTs have on surrounding real estate markets, this research provides a framework by which directional heterogeneity can be incorporated into these analyses. Second, this research adds to the existing pool of knowledge on land use externalities of LRT through incorporating the life-cycle of LRT from announcement to operations. Furthermore, this research examines the effects that LRT have on surrounding populations in transit adjacent areas to provide a look at the broader effects of LRT over time.

A major challenge in the analyses conducted in this dissertation is its reliance on SFR sales data. Urban areas near LRT may contain additional land uses. In order to fully determine LRT’s effects on its surrounding area, one should examine the proximity effects on all land use types. Furthermore, LRT stations and rail lines are assumed exogenous, which may not be the case as public hearings and town halls during the planning phase may influence stations’ locations. Future research should seek to understand how the circumstances surrounding the planning process could indirectly affect the socio-demographic characteristics in transit adjacent areas over time. Finally, additional research is needed to better understand the extent to which LRT affects urban intra- and inter-migration. Knowing the population repulsion and attraction of LRT can help planners design facilities to better serve the public.