Housing Values Higher Near Most Buffalo Metro Rail Stations

BUFFALO, N.Y. -- A study by a University at Buffalo urban planning researcher has found that houses located within a half-mile radius of Buffalo's light rail stations are assessed at $1,300 to $3,000 more than similar properties that are not within walking distance of the stations.

The study, "Impact of Proximity to Light Rail Rapid Transit on Station-area Property Values in Buffalo, New York," was published in the May 2007 issue of the international journal Urban Studies.

It was conducted by Daniel Hess, Ph.D., assistant professor of urban and regional planning in the UB School of Architecture and Planning, and his former student Tangerine Almeida, now of LSC Transportation Consultants, Inc., in Colorado Springs, Colo.

Hess says the premium on homes close to Buffalo's 14 rail stations may appear modest compared to many faster growing cities with rail systems, such as Atlanta, Dallas, Portland, San Diego and San Francisco, but that it is significant given the short length of Buffalo's light rail route (6.4 miles) and the fact that it does not serve the suburbs. "The gain in property value around rail stations," he says, "suggests that lower property values in the City of Buffalo compared to its suburbs and other U.S. metropolitan areas offer a distinct advantage for economic development.

"This is because an expanded rail system offering greater opportunity for access and a one-seat transit ride to regional destinations could result in even higher property values near stations," Hess says.

Using city assessment data, the team examined values for residential parcels within a half-mile radius of Buffalo's 14 transit stations. Hess points out that the housing premium varied greatly from station to station according to neighborhood.

"Low-income neighborhoods, where residents are likely to have fewer cars than higher income neighborhoods and so use the Metro Rail more frequently, experienced lower price premiums, and in some cases price penalties due to their proximity to a station," he says.

Proximity decreased property values near the Utica, Summer-Best, Theater and Lafayette Square stations.

Hess says this is because some stations, like the one at Utica and Main Streets, are surrounded by auto-oriented enterprises like car washes, auto parts stores and restaurants with drive-through windows. When you add these to other surrounding "negative" land uses like check-cashing enterprises, liquor stores and empty storefronts, it reduces the neighborhood's residential appeal.

There was insufficient data for analysis at the Humboldt-Hospital, Church Street, Seneca Street and Erie Canal Harbor stations, Hess said.

Increased property values were recorded in neighborhoods proximate to Metro Rail stations at the UB South (Main) Campus, LaSalle Street, Amherst Street, Humboldt Avenue-Sisters Hospital, Delavan Avenue-Canisius, Allen Street-Buffalo-Niagara Medical Campus and Fountain Plaza.

"We found property value assessed at a premium in neighborhoods close to these stations, even when we controlled for house size, size of parcel, number of bathrooms, number of bedrooms, number of fireplaces, etc. and neighborhood features such as nearby parks, average neighborhood income and area crime rate," Hess says.

"We did, however, find three property characteristics that have greater influence than proximity to metro rail stations -- the number of bathrooms, size of the land parcel and location on the east side or west side of Main Street."

The study team employed city assessment data because it is based on appraisals of homes at 100 percent of the market value, allowing them to use a larger number of homes in the study. Had they used sales-price data only, they could have considered only houses recently sold.

Light-rail systems were built in the 1970s and 1980s in various cities throughout the nation with the hope they would help spur economic revitalization. Urban planners generally agree that light-rail can increase land value, although the degree of price premium varies from place to place. Understanding the relationship between proximity to transit and land values, they note, can help municipalities better manage the areas surrounding transit stations and better plan for multi-modal access.

Past research by Hess on transit pass programs was awarded the 2004 Chester Rapkin Award by the Association of Collegiate Schools of Planning. His recent research on the costs and benefits of bus rapid transit systems received the top research award from the Region 2 University Transportation Research Center in New York City, and in 2005 he was named a UB Exceptional Scholar.

The University at Buffalo is a premier research-intensive public university, the largest and most comprehensive campus in the State University of New York. UB's more than 27,000 students pursue their academic interests through more than 300 undergraduate, graduate and professional degree programs. Founded in 1846, the University at Buffalo is a member of the Association of American Universities.