Investigating the Effect of Train Proximity on Apartment Prices: Haifa, Israel as a Case Study
Portnov, Boris A., Genkin, Bella, Barzilay, Boaz, The Journal of Real Estate Research
The present study investigates the effect of urban rail on the market prices of residential properties, considering train proximity as both a source of improved access and a local disamenity. For the analysis, 926 housing sales in the city of Haifa, Israel were used. The analysis indicates a relatively narrow buffer zone near train tracks (about 50-100-meters wide) that "absorbs" about 13% of price decline. Beyond this zone, apartment prices rise to their "peaks" at approximately 100-150 meters from the train tracks, and then decline by an average of 0.7% for each additional 100-meter increase in the train line distance.
Urban rail is often the main form of access to jobs and places of entertainment in large cities; in many cases, the train system spurs the establishment of new businesses along the rail lines, and migrants are encouraged to settle down near new commercial and labor areas created nearby (Cervero, 1984).
In real estate studies, the effect of train access on property prices is perceived as twofold. First, according to several empirical studies, property prices are likely to be higher near train stations than elsewhere, due to improved access to business areas, shopping, schools, and entertainment venues (Landis, Cervero, Guhathukurta, Loutzenheiser, and Zhang, 1995; Lewis- Workman and Brod, 1997; and Debrezion, 2006). Second, as indicated by several other studies, there may be a price-dumping effect of train proximity, due to noise pollution and unattractive views (Weinberger, 2001; and Simons and Jaouhari, 2004).
From the real estate perspective, the entire train system may thus be split into two principal components: 1) train stations, which provide access to urban activity foci and connect to other modes of urban transportation, and 2) areas surrounding rail lines (often saturated with dilapidated industrial estates and warehouses), proximity to which is a disamenity for adjacent residential development.
Most studies investigating the influence of urban rail systems on housing property market have been focused mainly on proximity to train stations (see Appendix 1) and generally overlooked the fact that train stations and rail lines may have different effects on residential property values. Only a handful of empirical studies attempted to evaluate separately the effects of train proximity on housing prices in areas adjacent to train stations and to rail lines (e.g., Armstrong, 1994; and Cambridge Systematic, 1999).
The present study attempts to investigate the effects of urban rail on the market prices of adjacent residential properties, considering train proximity as both a source of improved access and a local disamenity. To investigate these effects, data on 926 recent housing sales in the city of Haifa, Israel (approx. 270,000 residents) were used. As the study indicates, proximity to train tracks appears to have stronger effect on apartment prices than proximity to stations. According to the explanation proposed, this outcome may be explained by the fact that in the study area, train stations do not form large transportation and commercial hubs and thus do not serve as obvious "reference points" for either property sellers or buyers. Although the proximity to rail lines appears to have a positive effect on residential property prices overall, the study also detected a relatively narrow (about 50 meters) buffer zone in which housing prices tend to be lower than elsewhere.
The paper starts with a brief outline of previous studies dealing with the effect of urban rail on house prices. It is followed by a brief description of data sources, techniques of the analysis, and the main findings of the research. Topics for future research and applications of the study for appraisal and urban planning practice are introduced in the concluding section of the paper.
Studies of the Effect of Urban Rail on Residential Property Values
The effect of neighborhood amenities and disamenities (such as open spaces, thoroughfares, landscape views, etc. …