Abstract
Empirical evidence supports the hypothesis that greater accessibility to opportunities can have a positive impact on real estate values. However, this capitalisation of the benefits of accessibility could vary between different study areas. This research estimates hedonic and spatial hedonic models in two urban areas to compare if differences can be found in the impact accessibility using public transport has on residential property values. The two study areas chosen for comparison are a medium sized city without any major mobility problems (Santander, Spain) and a very large city with major congestion problems (Rome, Italy). The estimated hedonic models have considered the possible presence of spatial effects, a common occurrence with real estate data which may generate dependency in the residuals of hedonic models. Accessibility has been measured using two types of indicators: relative and gravity based. The results confirm that accessibility was a positive factor on property prices in both cities, although in Santander this was only true using the relative indicator to the city centre. These results are relevant for supporting the introduction of value capture policies which provide finance for new projects to extend and encourage greater use of public transport.
Highlights
The benefits generated by transport in terms of accessibility to different opportunities can be capitalised by property owners (Martínez, 2000)
Value capture policies are currently being applied in various cities using different mechanisms like coordinated urban and public transport development (Hong Kong, San Francisco, Atlanta), the application of direct taxes on property owners who are directly benefitting from transport infrastructure (Portland, Washington) and services or taxes levied on new real estate developments (Chicago) (Fogarty and America, 2008)
In the case of the dummy variables, the effect of the parameter should be estimated by using the expression: [exp(bn ) -1]*100, where bn is the parameter of the dummy variable being considered (Halvorsen and Palmquist, 1980)
Summary
The benefits generated by transport in terms of accessibility to different opportunities can be capitalised by property owners (Martínez, 2000). Value capture policies are currently being applied in various cities using different mechanisms like coordinated urban and public transport development (Hong Kong, San Francisco, Atlanta), the application of direct taxes on property owners who are directly benefitting from transport infrastructure (Portland, Washington) and services or taxes levied on new real estate developments (Chicago) (Fogarty and America, 2008). These policies have generally proved to be effective in improving the economic sustainability and financing of public transport
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