Metro station inauguration, housing prices, and transportation accessibility: Tehran case study

Authors

  • Yekta Yazdanifard Sharif University of Technology
  • Hosein Joshaghani Sharif University of Technology
  • Masoud Talebian Sharif University of Technology

DOI:

https://doi.org/10.5198/jtlu.2021.1622

Keywords:

Bus Rapid Transit (BRT), transit stations, Metro stations, public transport, residential property values, real estate prices

Abstract

The opening of a new metro station, as a mode of the transportation corridor, potentially could have different effects on housing prices. We have investigated its effect on the value of residential properties around those stations, using data from large expansions of the metro network in Tehran, Iran. In the period of our study (April 2010 to December 2018), forty-five metro stations were inaugurated in Tehran. We use a difference-in-difference regression method to identify the causal effect of interest, where adjacent properties are used as the treatment group and similar but distant properties as the control group. The results indicate that, on average, the adjacent properties are affected by a 3.7 percent increase in price relative to distant properties. We also extend our study by categorizing new metro stations according to the extent of ex-ante access to other modes of public transportation such as bus rapid transit (BRT). We find 2 to 11 percent positive effect of new metro stations in regions with lower public transport, while in regions with ex-ante extensive public transportation system, we find less than 2 percent positive effect.

References

Badoe, D. A. and E. J. Miller. 2000. Transportation–land-use interaction: Empirical findings in North America, and their implications for modeling. Transportation Research Part D: Transport and Environment, 5(4):235–263.

Bajic, V. 1983. The effects of a new subway line on housing prices in metropolitan Toronto. Urban Studies, 20(2):147–158.

Baker, C. 1983. Tracking Washington’s Metro. American Demographics, 5(11):30–35.

Billings, S. B. 2011. Estimating the value of a new transit option. Regional Science and Urban Economics, 41(6):525–536.

Bohman, H. and D. Nilsson. 2016. The impact of regional commuter trains on property values: Price segments and income. Journal of Transport Geography, 56:102–109.

Bowes, D. R. and K. R. Ihlanfeldt. 2001. Identifying the impacts of rail transit stations on residential property values. Journal of Urban Economics, 50(1):1–25.

Bryan, G., E. Glaeser, and N. Tsivanidis. 2019. Cities in the developing world. Technical report, National Bureau of Economic Research.

Chen, H., A. Rufolo, and K. J. Dueker. 1998. Measuring the impact of light rail systems on single-family home values: A hedonic approach with Geographic Information System application. Transportation Research Record, 1617(1):38–43.

Chica-Olmo, J., R. Cano-Guervos, and I. Tamaris-Turizo. 2019. Determination of buffer zone for negative externalities: Effect on housing prices. The Geographical Journal, 185(2):222–236.

Coffman, C. and M. E. Gregson. 1998. Railroad development and land value. The Journal of Real Estate Finance and Economics, 16(2):191–204.

Debrezion, G., E. Pels, and P. Rietveld. 2011. The impact of rail transport on real estate prices: An empirical analysis of the Dutch housing market. Urban Studies, 48(5):997–1015.

Diao, M. 2015. Selectivity, spatial autocorrelation and the valuation of transit accessibility. Urban Studies, 52(1):159–177.

Diao, M., D. Leonard, and T. F. Sing. 2017. Spatial-difference-in-differences models for impact of new mass rapid transit line on private housing values. Regional Science and Urban Economics, 67:64–77.

Diao, M., Y. Qin, and T. F. Sing. 2016. Negative externalities of rail noise and housing values: Evidence from the cessation of railway operations in Singapore. Real Estate Economics, 44(4):878–917.

Forouhar, A. and M. Hasankhani. 2018. The effect of Tehran metro rail system on residential property values: A comparative analysis between high-income and low-income neighbourhoods. Urban Studies, 55(16):3503–3524.

Forrest, D., J. Glen, and R. Ward. 1996. The impact of a light rail system on the structure of house prices: A hedonic longitudinal study. Journal of Transport Economics and Policy, pp. 15–29.

Giuliano, G. 2004. Land use impacts of transportation investments. The Geography of Urban Transportation, 3:237–273.

Hess, D. B. and T. M. Almeida. 2007. Impact of proximity to light rail rapid transit on station-area property values in Buffalo, New York. Urban Studies, 44(5-6):1041–1068.

Hu, L., S. He, Z. Han, H. Xiao, S. Su, M. Weng, and Z. Cai. 2019. Monitoring housing rental prices based on social media: An integrated approach of machine-learning algorithms and hedonic modeling to inform equitable housing policies. Land Use Policy, 82:657–673.

McMillen, D. P. and J. McDonald. 2004. Reaction of house prices to a new rapid transit line: Chicago’s Midway line, 1983–1999. Real Estate Economics, 32(3):463–486.

Mohammad, S. I., D. J. Graham, and P. C. Melo. 2015. The effect of the Dubai Metro on the value of residential and commercial properties. Journal of Transport and Land Use, 10(1).

Murat Celik, H. and U. Yankaya. 2006. The impact of rail transit investment on the residential property values in developing countries: The case of Izmir subway, Turkey. Property Management, 24(4):369–382.

Pope, D. G. and J. C. Pope. 2015. When Walmart comes to town: Always low housing prices? Always? Journal of Urban Economics, 87:1–13.

Railway-Technology.com. 2014. Tehran Metro, Iran. Technical report, Archived from the original on 2014-07-01. Retrieved 2014-06-29.

Ransom, M. R. 2018. The effect of light rail transit service on nearby property values. Journal of Transport and Land Use, 11.

Ryan, S. 1999. Property values and transportation facilities: Finding the transportation-land use connection. Journal of Planning Literature, 13.

Stewart, O. T., A. V. Moudon, and B. E. Saelens. 2017. The causal effect of Bus Rapid Transit on changes in transit ridership. Journal of Public Transportation, 20(1):91.

Sun, H., Y. Wang, and Q. Li. 2016. The impact of subway lines on residential property values in Tianjin: An empirical study based on hedonic pricing model. Discrete Dynamics in Nature and Society, 2016.

Vessali, K. V. 1996. Land use impacts of rapid transit: A review of the empirical literature. Berkeley Planning Journal, 11(1).

Wu, W., G. Dong, and B. Wang. 2015. Does planning matter? Effects on land markets. The Journal of Real Estate Finance and Economics, 50(2):242–269.

Yang, J. Z., Linchuan and O. F. Shyr. 2019. Does bus accessibility affect property prices? Cities, 84.

Downloads

Published

2021-04-25

How to Cite

Yazdanifard, Y., Joshaghani, H., & Talebian, M. (2021). Metro station inauguration, housing prices, and transportation accessibility: Tehran case study. Journal of Transport and Land Use, 14(1), 537-561. https://doi.org/10.5198/jtlu.2021.1622

Issue

Section

Articles