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Boosting Property Values Near BRT
Evidence of land development impacts of BRT has been noted in other countries (like around Bogota's Transmilenio, above); now we know that BRT can boost property values here in the U.S. as well.  Photo: pattoncito.

Evidence of land development impacts of BRT has been noted in other countries (like around Bogota's Transmilenio, above); now we know that BRT can boost property values here in the U.S. as well. Photo by pattoncito.

Many transit advocates agree that bus rapid transit (BRT) can provide high-quality, efficient transportation at a fraction of the cost of rail. However, a common concern about BRT is that routes are not as permanent as tracks – in theory, they could be moved if land use patterns change – so BRT has a limited ability to attract transit-oriented development. But recent research shows that BRT can spur development around its lines and stations. With new BRT systems opening up across the United States, this finding can help guide development and transportation policy.

Until now, there had been no quantitative modeling studies on the property value impacts of BRT in the U.S. Research has focused on the impacts of rail modes on property values, finding positive, but relatively small, impacts from nearby rail transit.  (Property values are used as a proxy for the desirability of land.)

But a recent paper from the National Bus Rapid Transit Institute and the University of South Florida’s Center for Urban Transportation Research shows that BRT can have similar impacts to rail transit on property values. The authors examined the effect of distance to the nearest BRT station on assessed property values, controlling for other measurable factors that influence values. Their study was focused on the Pittsburgh East Busway, which serves downtown Pittsburgh, the eastern side of the city and the eastern suburbs.

THE CLOSER THE BETTER

The study found that closer proximity to a BRT station increases property values. The effects on property values are stronger nearer to stations. For instance, moving from 101 feet to 100 feet away from a station (1 foot closer) increases a property’s value by approximately $19.00, while moving from 1,001 to 1,000 feet away from a station (also 1 foot closer) increases value by approximately $2.70.

Another study from the Breakthrough Technologies Institute examined the attitudes of developers and city planners toward development near BRT lines. Through surveys of twelve developers and seven transit/planning agencies, the author found that developers had positive opinions about BRT’s impact on their properties, and that transit/planning agencies believed that development around BRT stations would be comparable to development around rail transit.

Developers indicated that the proximity of BRT had strong positive impacts on the market potential of development sites and their ability to attract financing. It also helps raise property values and boost the overall appeal of a site to tenants/purchasers. The developers also noted the importance of the “permanence” of transit infrastructure, and rated the permanence of BRT very high. Dedicated runningways, sizeable ridership, streetscape improvements and station quality contribute most to permanence in respondents’ minds.

The study provides supporting evidence from Cleveland, Ohio and Boston, Mass. in the United States, as well as Brisbane, Australia and Ontario, Canada. For detailed case studies of how BRT impacted property values in these cities, check out the Breakthrough Technologies Institute’s report, Case Studies on Transit Oriented Development around Bus Rapid Transit Systems in North America and Australia.

As more BRT systems begin operation, these studies should be expanded. Findings like these are crucial to building the virtuous circle around BRT and land use. Transit-oriented development around BRT can facilitate access to busways, increasing ridership and in turn strengthening demand for nearby real estate. With the knowledge that the market will likely respond, cities can encourage this process by implementing policies to encourage BRT-centered development, such as tax incentives, density bonuses, streamlined development application processes, and targeted land use planning and zoning.

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  • Matt Fisher

    Oh yeah. Ottawa’s Transitway is a success, giving OC Transpo a substantial ridership of 250,000, and I see middle class people on the buses in Ottawa, which I myself use every day. Ottawa has a transit mode share of 20%. Most cities in North America do not have a mode share this large. Nevertheless, I don’t see myself as a BRT proponent or as somebody who says, “Well, BRT is just as good as rail”. But at the same time, bus rapid transit has its place and rail can coexist with it in the same city, and this will be true in Ottawa.

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  • It is very interesting to see emerging evidence of positive changes in land use, and rent, around Bus Rapid Transit lines in developed countries (especially the US where there are still very few applications of full scale BRT systems). Land use and land value impacts are already common in developing cities like Curitiba and Bogota. Curitiba example has been widely reported. It is included in the review of Transit Oriented “best practices” by the Transit Cooperative Research Program (see http://onlinepubs.trb.org/onlinepubs/tcrp/tcrp_rpt_16-4.pdf)

    Bogota’s BRT, launched 10 years ago, has also shown emprical evidence of positive land value changes. See for example the studies by Vivian Barrios, “¿Influye la Accesibilidad en la Renta Inmobiliaria? Estudio de Caso del Sistema de Transporte Masivo TransMilenio de Bogotá”, Facultad de Economía, Universidad de los Andes, 2002; Rodriguez, D. A., Targa, F. “Value of Accessibility to Bogotá’s Bus Rapid Transit System,” Transport Reviews, Vol. 24, Number 5, pp. 587-610, 2004. http://terpconnect.umd.edu/~ftarga/downloads/Papers/MP-Felipe%20Targa.pdf; and Ramon Munoz-Raskin, “Walking accessibility to bus rapid transit: Does it affect property values? The case of Bogotá , Colombia”, Transport Policy ,Journal of the Transport Conference on Transport Research Society, Volume 17 (March 2010), pp. 72–84, which show significative influences in land values of the proximity to TransMilenio stations. The studies use hedonic prices techniques to control for different property characteristics, as well as spacial economic models.

    Commenters and advocates for rail transit solutions can argue the applicability of these results to the US context, and even controvert the evidence in US cities, but it is difficult to dismiss BRT as an actual mass transit alternative in several corridors on the basis of “I doub it” or “I just prefer rail”.

    It is important to do adequate alternative analysis, including full life cycle costs and benefits. In many cases, such as the proposed “Purple Line” for Maryland’s Montgomery and Prince Charles Counties, it has been showed that BRT is more cost effective, less risky and even more convenient from the climate change perspective (see http://www.wri.org/press/2009/01/enhanced-buses-best-option-dc-area-purple-line-wri-finds). Still, the community, the planning bodies, and the elcted officilas select Light Rail option, as better option to provide land development in its area of influence, just because there is not enough evidence in the US context, or because they are not familiar with good BRT applications. This was the case of the “Purple Line-Light Rail”, which is now in the process of getting funding from the Federal Government as the locally preferred altervantive. The capital cost of this decision will be 3 times the one of the BRT option. The riding experience could be somewhat better, but not neccesarily worthed and additional billion dollars in capital spenditures. The development impacts may be similar because the people is concerned with accesibility, not with the technology behind tranist service, as the studies from NBRTI and The Breaktrought Technologies Institute are showing.

    Thank you for bringing new evidence to the ongoing disucussion on transit options.

  • Matt Fisher

    Oh yes. And BRT works in Bogota and Ottawa. TransMilenio is a good model worth exploring.

  • Matt Fisher

    I agree with what many of the commenters say. However, I believe BRT can coexist with rail, and Ottawa’s Transitway is a success. BRT is not that bad, if we can regard it as a step towards rail.

  • Alek F

    I disagree about those wonderfully sounding benefits of BRT.
    It may work on some other countries, but not in the U.S.
    Rail transit has proven to be much more effective.
    Yes, the initial investment is certainly cheaper, but the operating expenses are considerably higher than Light Rail.
    Now,
    those who support BRT are usually people of two categories:
    1) Those who never use mass transit (of course, they wouldn’t care! They will just continue driving their SUV’s and could care less about high-quality transit); and
    2) Those who do not know much about mass transit.
    The thing is,
    BRT is no more than a mediocre transit alternative to help transit-depended people to move around. BRT will rarely, if ever, attract middle-class, and especially upper class, people. Limited capacity, uncomfortable & lousy ride, slower speeds, high number of accidents, and polluting vehicles – are among the reasons why BRT never ever will be as successful as the Rail transit. While the Light Rail shows a completely opposite quality of service, becoming much more attractive to everybody – discretionary riders, investors, and even homeowners, as a Rail line causes property values to increase.
    The LACMTA’s Orange line is a sad example of how a corridor with great potential for a Light Rail was built only as a BRT corridor. Sardine-packed ugly & noisy buses, long rides, are only a few of the reasons why many people (including myself) are not too thrilled with BRT.
    Light Rail (or Subway) should be the way to go,
    and the idea of BRT should be put to rest!

  • Nice article, BRT’s impact on the real estate has been underestimated for a long time.

    Anto6n:

    “But the vehicles themselves may be cheaper (on a per seat basis), and the upkeep of both the vehicles and the tracks are cheaper for light rail compared to a BRT system.”

    The vehicles and their upkeep may be cheaper, but it isn’t always true. As for the roads, those used by buses are also used by common traffic, whereas light rail tracks are only used by the trains – the upkeep is surely cheaper, but it’s not an additional expense.

    In my opinion, the environmental issues are BRT’s greatest disadvantage, but they can be avoided by using more trolleybuses and hybrid vehicles.

  • Ant6n

    “Many transit advocates agree that bus rapid transit (BRT) can provide high-quality, efficient transportation at a fraction of the cost of rail”

    I am not entirely sure that BRT is so much cheaper than light rail. Sure the initial investment is usually much smaller (especially if the expensive roads used already exist). But the vehicles themselves may be cheaper (on a per seat basis), and the upkeep of both the vehicles and the tracks are cheaper for light rail compared to a BRT system.

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