Impacts of transportation infrastructure on single-family property values

Abstract

ABSTRACTNew or long-standing public infrastructure such as highways, airports, and ports of entry (POE) can increase adjacent property values generating a value premium for private developers and adjacent property owners. States and local governments aim to determine the geographic footprint and anticipate the economic value created by transportation infrastructure proximity and accessibility since it represents an opportunity to capture some infrastructure costs. Hence, it is desirable to understand the degree of correlation between transportation infrastructure proximity and changes in real property values in a spatial context particularly when defining economic development zones where transportation investments are planned and where governments expect to recover some of the infrastructure cost from increases in real property values. This research applies geographically weighted regression (GWR) analysis to determine the geographic footprint and quantify the impacts of transportation infrastructure proximity and accessibility on real property values in El Paso, Texas using a 2013 cross-sectional data set. The presence of spatial nonstationarity and heterogeneity confirms that transportation infrastructure proximity and accessibility might generate premiums on real property values, but that such premiums are not always positive and are occasionally negative. GWR shows that benefits from a transportation facility can be capitalized by non-adjacent parcels. Finally, GWR maps can help better policy development by estimating how much value is added by infrastructure proximity and accessibility throughout particular locations.