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.