Causal identification of transit-induced property value uplift in Canada's Waterloo Region: A spatio-temporal difference-in-differences method application

Abstract

Renewed interest in light-rail transit (LRT) in North America has heightened the need for an improved understanding of transit impacts on land value uplift (LVU). A number of studies have investigated the relationship, with findings varying with local contexts and estimation methods. Most of these studies focus on the aggregate effects of transit using cross-sectional models, but do not examine the spatial and temporal heterogeneity in transit impacts through quasi-experimental approaches. To bridge this gap, we build a set of spatio-temporal difference-in-differences (STDID) models for the causal identification of transit-induced land-value uplift, taking the new LRT line in Canada's Waterloo Region as the case study. The study contributes to the transit-induced LVU literature in several ways. First, we account for the space-time influence of recent comparable sales in price determination, a transaction data-generating process often excluded in hedonic studies. Second, our models reveal the disaggregate effects of transit policies in different station areas and transit phases. Third, we provide a pre-LRT analysis in a car-dependent mid-sized urban area, which offers insight into speculative investment in TOD areas and/or resident anticipation of future accessibility benefits. The findings can provide guidance for value-capture programs and cost-benefit analysis for transit-oriented development in mid-sized cities.