Commercial Rents and Transportation Improvements (Working Paper)

The Case of Santa Clara County's Light Rail

Author(s): Weinberger, Rachel R.
Publication Date: December 2000

74 pages; Inventory ID WP00RW2; English


Commercial Rents and Transportation Improvements	610 KB

Abstract

Disproportionate benefits or burdens from government projects often fall on individuals. In Santa Clara County, California, property owners sued the County claiming a burden due to the existence of the light rail. Looking at commercial property rents, this research tests several hedonic specifications to determine what effect the light rail has on property values; it compares transit and highway accessibility as determinants of rent; and it uses a series of hedonic indices to analyze effects over time.

Results indicate that, controlling for other factors, properties within a half mile of light rail stations command higher rents than other properties in the County. When controlling for highway access, it appears, because coverage is ubiquitous, there are no particular locational advantages associated with proximity to highway. Furthermore, as the transit system matured, greater benefits accrued to the proximate properties, but, in times of more intense general market pressure, the rent premium was dampened.