Impacts of rail transit access on land and housing values in China: a quantitative synthesis

ABSTRACT

Rail transit investment has been viewed as a prominent policy instrument for local and regional development. However, little is known about to what extent the theorised changes in land and housing values arising from rail transit access can be substantiated by evidence in a large developing country context. This paper presents a quantitative review of empirical studies that analysed the impacts of rail transit access on land and housing values in China. We review empirical analyses in 67 studies from 1997 to 2018 for which we encode quantitative results along with a range of theoretically combinations of spatially contextual characteristics, data and methodological-design characteristics. The results show that there are significant variations in the size estimates of effects of rail transit access across studies. Such variations are associated with rail project types, data and methodological designs. Our study provides the insights on what has already been known and what needs to be known on evaluating real estate consequences of rail transit improvements in developing countries.     

The impact of rail transit on land use: Evidence and a change of perspective

On the basis of available evidence we cannot clearly establish a causal relationship between rail transit and changes in land use and development patterns. At best, such changes would seem to occur only in the presence of other favorable factors, such as supportive local land use policies and development incentives, availability of developable land and a good investment climate. In any event, however, determining the precise extent of rail investment's effect on urban structure is less important than assessing the role it could play in an overall strategy for reaching larger urban goals.     

Hedonic modeling of commercial property values: distance decay from the links and nodes of rail and highway infrastructure

Transportation - This study investigates the impacts of positive and negative externalities of highways and light rail on commercial property values in Phoenix, Arizona. We hypothesize that the...     

The impact of urban rail transit on commercial property value: New evidence from Wuhan,China

The interaction between rail transit and the urban property market is a vital foundation for planning transit-based policy such as Value Capture and Transit Oriented Development (TOD). Yet only few studies have reported the impact of transit access on commercial property value. This paper presents empirical evidence from Wuhan, China, to enrich the knowledge in the subject area. Spatial autoregressive models were employed to estimate the commercial value capture, based on 676 observations along Wuhan’s metro rail line through the main business districts. Value appreciation was discovered within the 400 m radius of road network distance from Metro stations. The transit access premiums present as two tiers: 16.7% for the 0–100 m core area and approximately 8.0% within the 100–400 m radius. The result demonstrates the potential benefit of adopting value capture and optimising TOD planning to support sustainable urban rail transit investment. Amid rapid urbanisation in China, the evidence reported here could help better inform cities, across the developing world and beyond, of the benefits of adopting rail transit-based policy.     

Modelling the impact of rail fare increases

Rail fares in South-East England have been increasing in real terms for several years, and are expected to continue to do so. In this paper, the impact of such increases is examined in terms of the choices of mode of travel, home and job location, and residential migration. Forecasts are made using a model in which the population is partitioned into four sets according to whether they have changed home and/ or job over the forecast period. The model allocates population to homes and workers to jobs, and commuters to the three modes of travel considered. The impact of an increase of 25% in real fares over a five-year period is examined and a number of conclusions are drawn. The model shows that rail patronage will decline even if transport costs remain constant in real terms, because of decentralisation of jobs and rising car ownership. The overall long-term rail fare elasticity is found to be –0.7, but this is the mean of a wide range of values for different parts of the study area. People ceasing to commute by rail would divide almost equally between car and bus, the latter being used particularly to Central London. Those people who commute to London who are seeking new homes would tend to choose to live nearer London than they would have otherwise. The paper concludes with a discussion of the findings in terms of the assumptions implied in the model.     

Enhancing the developmental impact of rail transit

A number of forces currently at work in the United States are fostering the rebirth of urban rail transportation. In order to maximize the beneficial economic and developmental impact of future rail investment, certain procedures and techniques must be employed in the planning, design, and implementation of rail systems. The paper offers a set of guidelines and principles for transportation and land use policy makers.     

Appraisal of rail investment projects: recent British experience

There has long been conflict over the degree to which railways should follow commercial or social investment criteria. This paper outlines the components of a comprehensive social cost‐benefit analysis of railway investment, and then describes the current approach in Britain. British Rail investment proposals are subject to a purely financial appraisal, although in the subsidized sectors of the railway this is subject to the proviso that a ‘broadly comparable’ level of service should be maintained. Local authorities and private operators are able to apply for a central government grant towards the cost of schemes they sponsor. But grant is only payable in respect of external benefits—that is, benefits other than to public transport users. Sponsors are also expected to seek contributions from private developers wherever possible. The difficulties to which this approach leads are discussed, and illustrated with two case studies of actual schemes. In one, it appears that failing to consider disbenefits to bus operators (and in turn to users of bus services) could lead to investments being undertaken which are not justified. In the other, a scheme which yields a high Net Present Value could not go ahead, in the form that we evaluated, because there is no way of recouping enough of the user benefits as revenue. Both are examples of the sort of distorting effect on decision‐making the current regime may have.     

The impact of planned disruptions on rail passenger demand

Transportation - Disruptions to rail journeys are experienced by rail passengers on a daily basis throughout the world, with the impacts on passengers ranging from minimal to major. Such...     

Financing urban rail projects: The case of Los Angeles

This paper describes the potential use of the financing strategy of value capture or benefit assessment for an urban mass transportation project. The paper describes the legal background to the use of benefit assessment, and the process of implementation for the first construction phase of the Los Angeles Metro Rail project. The process of developing the benefit assessment structure was a consultative one, utilizing technical inputs from a team of specialist consultants, a task force consisting of major developers and property owners in the affected area, and politicians representing many of the interests in the region. The initial benefit assessment districts were set up to raise $130 million of the cost of the first 4.4 miles of the rail project, and are based on the benefits accruing to certain categories of property in the vicinity of stations. The assessment would be collected for about 18 years and bonding would be used to provide the capital at the time of construction.The paper describes the procedure for setting boundaries, the structuring of the assessment rates, the definition of benefiting properties, and the uses and tenure of the assessment. In almost all cases, the theory of value capture indicated a different result than was achieved from a consensus of the task force, and the nature of these differences is explored in the paper. The establishment of the benefit assessment districts withstood early court challenges, but has subsequently been appealed and was overturned on appeal. Action is pending with the Supreme Court currently, and efforts are also underway to pass new legislation to deal with some of the issues raised in the court proceedings.     

The impact of rail access on condominium prices in Hamburg

Using hedonic price functions, we study the influence of access to public railway stations on the prices of surrounding condominiums in Hamburg, Germany. The study examines the influence of rail infrastructure on residential property prices, not only of individual lines, but for the entire rail network of a metropolitan region. We test the stability of the coefficients for different sets of control variables. The study also estimates public-transit-induced increases in tax revenues due to real estate price increases for a study area outside the United States. We control for spatial dependence and numerous variables correlated with the proximity of railway stations and show that access to the public transit system of the city of Hamburg is to be rated with price increases of up to 4.6%. Such premiums for higher-income neighbourhoods and for subterranean stations tend to be higher. The premiums calculated are significantly lower than average price premiums reported in previous studies, which were mostly based on much fewer variables that rail access might be correlated to.     

The impact of high-speed rail investment on economic and environmental change in China: A dynamic CGE analysis

This study investigates the impact of high-speed rail investment on the economy and environment in China using a computable general equilibrium (CGE) model. The analysis is implemented in a dynamic recursive framework capturing long-run capital accumulation and labor market equilibrium. A national level impact was simulated through direct impact drivers including land use conversion, output expansion, cost reduction, productivity increase, transport demand substitution and induced demand. The results suggest that rail investment in China over the past decade has been a positive stimulus to the economy, while the effect on CO₂ emissions generation has been large. Overall, the economic impacts of rail investment are achieved primarily through induced demand and output expansion, whereas the contribution from a reduction of rail transportation costs and rail productivity increases were modest. In addition, negligible negative impacts were found from land use for rail development and the substitution effect among other modes. Emissions reduction from substitution of rail for other modes was small and offset by output expansion due to lowered rail transport costs and induced demand.     

Assessing the CO2 impact of current and future rail track in the UK

This paper investigates the CO₂ impact of current and future UK rail track and estimates the material, process and transport emissions associated with construction, maintenance and end-of-life activities for designs at high and low traffic loads. Analysis shows that for current track configurations, track with concrete sleepers has the lowest CO₂ impact, followed by steel, hardwood and softwood. Several potential future rail track designs have been analysed including embedded rail and double and quadruple-headed rail. All future track designs have a lower impact than current designs, but this improvement is more marked at high traffic loads. Up to a 40% reduction in CO₂ impact could be achieved if the UK rail network was to move from conventional track design to a double-headed embedded rail design. Key levers for reducing the CO₂ impact of track are identified as service life extension, traffic load reduction and the selection of low impact track designs.     

Long-term impact of the Shinkansen on rail and air demand: analysis with data from Northeast Japan

This paper analyses how the high-speed rail construction in Northeast Japan (Tohoku) has affected total demand and interregional travel patterns. We use annual interregional passenger data from 1989 to 2012 and apply regression analysis with the demand between Tokyo and the Tohoku prefectures as the dependent variable. We distinguish particularly between the ‘Full-’ and the ‘Mini-’ Shinkansen, where the latter are branch services running with reduced speed. We find that the ‘Full-Shinkansen’ quickly increases rail and total public transport trips and generates additional rail demand year on year. The ‘Mini-Shinkansen’ impacts are less pronounced. Furthermore, our analysis shows that the Shinkansen has shifted some demand from air to rail once it started operation and increased rail share gradually. We therefore suggest that predictions of demand impacts should carefully distinguish immediate from gradual impacts. We also discuss differences in regional demand in that not all prefectures have gained equally from Shinkansen construction.     

The impact of U.S. rail regulatory reform on railroad management and organizational structure

The management structure of U.S. railroads has been historically characterized as static and bureaucratic. Many writers have attributed this to years of restrictive government regulation. This paper tests the hypothesis that observable characteristics and organizational structure of railroad management have changed in conjunction with recent regulatory reform. Management characteristics are analyzed in both 1977 and 1983. Major findings are that managers in 1983 are significantly younger and better educated with fewer years of company and industry service. Railroad organizational structures are also reviewed before and after deregulation to assess whether management structures are becoming leaner and less mechanistic.     

Assessing network vulnerability of heavy rail systems with the impact of partial node failures

Much of the literature in recent years has examined the vulnerability of transportation networks. To identify appropriate and operational measures of nodal centrality using connectivity in the case of heavy rail systems, this paper presents a set of comprehensive measures in the form of a Degree of Nodal Connection (DNC) index. The DNC index facilitates a reevaluation of nodal criticality among distinct types of transfer stations in heavy rail networks that present a number of multiple lines between stations. Specifically, a new classification of transfer stations—mandatory transfer, non-mandatory transfer, and end transfer—and a new measure for linkages—link degree and total link degree—introduces the characteristics of heavy rail networks when we accurately expose the vulnerability of a node. The concept of partial node failure is also introduced and compare the results of complete node failure scenarios. Four local and global indicators of network vulnerability are derived from the DNC index to assess the vulnerability of major heavy rail networks in the United States. Results indicate that the proposed DNC indexes can inform decision makers or network planners as they explore and compare the resilience of multi-hubs and multi-line networks in a comprehensive but accurate manner regardless of their network sizes.

     

TRESIS: A transportation,land use and environmental strategy impact simulator for urban areas

The Institute of Transport Studies has developed a Transportation and Environment Strategy Impact Simulator (TRESIS) as a decision support system to assist planners to predict the impact of transport strategies and to make recommendations based on those predictions. A key focus of the simulator is the richness of policy instruments such as new public transport, new toll roads, congestion pricing, gas guzzler taxes, changing residential densities, introducing designated bus lanes, implementing fare changes, altering parking policy, introducing more flexible work practices, and the introduction of more fuel efficient vehicles. The appropriateness of mixtures of policy instruments is gauged in terms of a series of performance indicators such as impacts on greenhouse gas emissions, accessibility, equity, air quality and household consumer surplus. In this paper we introduce TRESIS to the research community, focussing on the structure of the system and the diversity of applications. Applications are presented to illustrate the diversity and richness of TRESIS as a policy advisory tool.     

Modeling the impact of government guarantees on toll charge,road quality and capacity for Build-Operate-Transfer (BOT) road projects

Government guarantees are frequently used to attract private investors’ participation into Build-Operate-Transfer (BOT) road projects. In this paper, we investigate the impact of government guarantees on toll charge, road quality and road capacity by taking perspective of the private investor. The main results are: (1) Minimum traffic guarantee increases toll charge while decreasing road quality. Under a low guarantee level, minimum traffic guarantee has no impact on road capacity. However, it improves road capacity when a high guarantee level is performed. (2) Under minimum revenue guarantee, if the guarantee level is sufficiently high, the optimal toll charge will be sufficiently large, but road quality and road capacity will approach zero. (3) Price compensation guarantee decreases toll charge and increases both road quality and road capacity. This paper further investigates the impact of government guarantees when the contract is auctioned. We find that auction reduces the impact of government guarantees on toll charge while failing to affect the impact of government guarantees on road quality and capacity. Some policy implications are also derived from our model results.     

A simulation model of train travel on a rail transit line

A simplified simulation model for the operational analysis of a rail rapid transit train is presented. The model simulates the movement of a train along a route, and develops the relationships of time—distance, time—speed and distance—speed. The inputs to the model are the profile of speed limits and the dynamic characteristics of the train. Without the information on the track geometry and tractive effort, the model determines the speed of the train at a location based on the previous and future speed limits relative to the location. It was found that the model can fairly accurately simulate the relationship between travel time and distance. A comparison of the train travel times between the actual and simulated runs is presented. Because of the simplicity of input and calculation method, the model can be a useful tool for the “desk-top” analysis of frequently occurring planning problems of a commuter rail or rail rapid transit line, such as the impacts of changes in speed limits, station locations, station stopping policy, addition/elimination of stations, and types of rail cars.     

Privatisation and the quality of rail services

Using the concept of generalised costs to reflect quality in rail services, we consider the level of provision and quality of these services in the various forms they may take in a privatised environment within a model where we assume linear and separable demand and cost functions for analytical simplicity. Using the Pareto-efficient output and quality outcomes under a fully integrated system for reference (as well as those for a fully integrated profit-maximising monopolist) we show that if either bilateral monopoly or complementary monopoly emerge as a market structure the output of train services and their quality will generally fall. In the case of the emergence of both bilateral monopoly and complementary monopoly our analysis again suggests poor welfare outcomes. The implication that can be drawn from our analysis is that a regulator of a privatised rail system faces some severe problems if she is to attain the appropriate welfare targets.