Essays on Property Values and Urban Corridors

Abstract

This dissertation contains three essays that are related to property values and urban corridors. Urban corridors are loosely defined as public infrastructures that promote economic activities. The first essay describes a procedure for estimating household willingness to pay (WTP) for housing and location attributes using a hedonic pricing model of property values with spatial autocorrelation. To model taste heterogeneity, I consider household-specific utility coefficients for parcel-level attributes. The application provides a way to determine the price impact of urban corridors on residential homes. In particular, separate analyses are used for single-family and multifamily parcels in Minneapolis. Ultimately, this essay addresses the question of how much do households residing in different types of properties value different neighborhood development and housing characteristics. The other two essays involve applications of the hedonic price model to light rail transit (LRT). Light rail transit (LRT) alignments are chosen because there are multiple transit extensions planned for the Twin Cities region.The second essays are coauthored by Ed Goetz and Aaron Hagar. Together, we analyze the property value impacts of the Minneapolis Blue Line LRT. Impacts are assessed in terms of the accessibility effect of proximity to an LRT station and the nuisance eect of proximity to the LRT track. We estimate the proximity effect on sales prices for single-family and multifamily homes using parcel data predating construction and postdating completion of the line. The findings confirm our expectations about the differential impacts of light rail completion and location. Accounting for regional fluctuations in the housing markets, we find thehousing premiums generated after completion of the line. Using parcel data from Saint Paul, Minnesota, a study of the residential property value impact of the Metro Green LRT is conducted. The goal of the third essay pa- per is to test for benefit transfer of results found in previous studies that assess the property value impact of the Metro Blue Line LRT. The essay compares the property value impacts in Saint Paul and those found in Minneapolis. The found similarities in return of investment specific to station area economic development can inform regional transportation planning and funding strategies that concern value capture.