Does an Improved Urban Bus Service Affect House Values?

Abstract

ABSTRACT This study aims at testing whether, and to what extent, the overall quality in the supply of an urban bus service translates into higher house values for properties located along the lines; Quebec City, Canada, is used as a case study. The study relies on a database provided by the former Quebec Urban Community Assessment Division and, once filtered, includes 11,291 detached and attached single-family house sales that took place in Quebec City between January 1993 and February 1997. In addition to sale prices and conditions, property specifics, local amenity and taxation, time trend as well as socioeconomic and overall accessibility attributes, the database also includes mass transit (MT) network quality attributes accounting for bus frequency, route diversity and bus stop accessibility. Three bus service levels are considered—namely regular routes, the Metrobus and the Express—while four mutually exclusive buffer zones are used for measuring house value impacts. All information is handled through a regional geographic information system (GIS). The hedonic approach is resorted to in order to assess the magnitude and direction of MT-related externalities for properties located along bus routes and in the vicinity of bus stops. Findings suggest that increasing regular bus frequencies results, by and large, in lower house values for properties located in the vicinity of regular routes; and the reverse is true for Express lines, which exert a substantial, positive influence on prices. Thus, by offering a more direct and efficient (fewer stops) as well as more comfortable mode than both the regular and Metrobus services, the Express actually proves to be a convenient substitute to the private car for suburban homeowners with a regular working schedule. Findings also suggest that a greater destination choice for homeowners, expressed as the number of routes available within a five-minute walk from home, affects property values upward. Finally, the number of bus stops available at a distance of between 100 and 400 meters from home drives house prices down by a factor that lessens with distance. Thus, the additional noise and traffic disturbances thereby generated seem to prevail over an easier access to the MT network.