Impacts of the Hiawatha Light Rail Line on Commercial and Industrial Property Values in Minneapolis

Abstract

Metropolitan Council has proposed a network of dedicated transitways in its 2030 Transportation Policy Plan to coordinate transportation and land use development and ultimately manage congestion. Since transitways require substantial funding from federal, state, and local governments, the public is interested in knowing if transitway investments bring about meaningful economic benefits to local communities. In this report, we analyzed the impact of proximity to Hiawatha light rail line stations on sales prices for commercial and industrial properties. We applied a linear hedonic pricing model on the 2000-2008 sales data spanning before and after completion of the line (2004). We expect the findings will illuminate questions about light rail transit’s economic benefits. They can provide evidence for transit agencies to justify transitway investments and address concerns of local developers and lenders regarding economic benefits of transitways.