The Hiawatha Line: Impacts on Land Use and Residential Housing Value

Abstract

This report presents the results of an examination of the economic and land-use impacts of the Hiawatha Light Rail Line. Specifically, the report contains findings on the impact of the line on residential property values, housing investment, and land-use patterns. Property value impacts were determined through the creation of a hedonic pricing model for single-family and multi-family residential properties within a one-half mile radius of the Hiawatha Line stations. Price trends within station areas were examined both prior to and after completion of the Hiawatha Line in 2004 and in comparison to a control area of southeast Minneapolis. Housing investment trends were investigated through an examination of building permit data, also broken down into pre- and post-construction periods. Land use patterns were examined through analysis of the Metropolitan Council’s seven-county land use data base. The findings indicate that construction of the Hiawatha Line has had a positive effect on property values within station areas. The effect is limited to the west side of the line; on the east side a four-lane highway and a strip of industrial land uses intervenes and eliminates any positive impact of the line. Results also show a high level of residential investment (as measured by dollar value of the investment) within station areas compared to the control area. No changes in land use patterns were detected since completion of the light rail line. This study demonstrates that completion of the Hiawatha Line has generated value and investment activity in the Minneapolis housing market.