Regional rail proximity boosts suburban home values
In the latest effort to convince residents and legislators statewide that SEPTA is worth funding, the authority has shared a study that finds regional rail boosts property values in SEPTA’s suburban counties. The study, commissioned by SEPTA and conducted by Econsult Solutions, suggests that housing prices could take a downturn if SEPTA is forced to suspend service on regional rail lines.
“The Impacts of SEPTA Regional Rail Service on House Prices” looked at single-family home transactions between 2005 and 2012 in Bucks, Chester, Delaware and Montgomery counties. According to the results, SEPTA’s regional rail service is responsible for an average $7,900 property value premium per-house across each of the four counties. For homes closer to regional stations with high levels of service and parking capacity, the property value premiums are even higher – ranging from an average of $31,000 to $37,000 per house.
Applying the $7,900 average home value premium to the more than 754,000 single-family homes in the four counties, the Econsult report estimates that SEPTA’s regional rail service is responsible for approximately $6 billion in aggregate property value impacts across the four counties.
The study looked at three important factors: a property’s proximity to regional rail, level of service at each station and the availability of parking. The results are what one could expect. Homes located less than half a mile from a station with high service levels and more than 100 parking spots had the highest property value premiums. Homes located two to three miles from stations with fewer than 100 parking spots and low service levels had the lowest property value premiums.
The study found that increased service levels have a greater impact on property values of homes located further from stations than on homes closer to stations. Increased service levels generated an additional 2.6% in property value impacts for homes located within half a mile of a given station and an additional 4.9% for properties located between one and two miles from the station.
The impact of parking ranged from a 1% increase in property value for homes located near stations with fewer than 100 parking spaces to a 10% increase in property value for homes located near stations with more than 100 parking spaces.
SEPTA’s doomsday plan, impact on home values
Last month SEPTA announced that without an additional $6.5 billion for capital projects over the next 10 years, SEPTA will shut down nine regional rail lines and implement a number of other cutbacks. Without the additional funding, an estimated 30,243 daily riders on regional rail alone would lose service. That’s a loss of 24,166,974 annual regional rail passenger trips.
Based on its findings, Econsult concludes that eliminating regional rail service would reduce the value of single family homes in these four counties by an average of $7,900 per home and an aggregated loss of nearly $6 billion.
This does not seem to take into account the fact that at least some portions of four regional rail lines would not be eliminated under SEPTA’s potential cutbacks. The report does note, though, that the potential $6 billion home value loss does not take diminished economy or roadway congestion – side effects of shuttering regional rail lines – into consideration, and because of that, this $6 billion loss estimate should be thought of as a lower bound estimate of the property value impacts resulting from the suspension of regional rail service in SEPTA’s suburban counties.
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