Abstract
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 positive externality (i.e., accessibility) of highway and light rail accrues at exits and stations, whereas nodes and links of highways and light rail emanate negative effects. Positive and negative effects decay with increasing distance and are captured by multiple distance bands. Hypotheses are tested using a spatial error regression model. Results show that commercial property values are positively and significantly associated with the accessibility benefits of transport nodes. The distance-band coefficients form a typical distance decay curve for both modes with no detectable disamenity donut effect immediately around the nodes. Unexpectedly, impacts of light rail stations extend farther than those of highway exits. Only the links of light rail are negatively associated with property values, as hypothesized. When the sample is subdivided by type of commercial property, the magnitude and distance extent of impacts are surprisingly consistent, with light rail stations having stronger impacts than highway exits on all three classes of commercial property: industrial, office, and retail and service. Rail links have a significant negative relationship with price for all three types of commercial property, but highways have a significant negative relationship only with industrial properties.
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Notes
However, if a freight rail network exists in the study area, industrial property may be found near freight rail stations to reduce transport cost of inputs and outputs based on the traits of industry.
The limited property value is a unique approach that is used to calculate primary tax in Arizona.
In Nelson (1982)’s review paper, 300 m or 1000 feet is considered as a noise zone. However, we used 350 m as the impact zone because highway centerline was used to measure distance. Thus three multiple bands are 0–150, 150–250, and 250–350 m.
Hedonic models were estimated with and without the 2009 data because of the sharp fluctuations of the real estate market caused by financial crisis. Results, however, did not differ substantially, and therefore the final results include all years of data.
The original model included distance variables to both the airport and the CBD, but due to multicollinearity we removed the weaker variable (CBD). The Phoenix CBD not only is well known for being weak for a metropolitan area of its size, but also has a very unusual shape, with the core downtown spreading for several miles along the Central Avenue spine. Removing the distance from CBD variable had little effect on the main results.
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Seo, K., Salon, D., Kuby, M. et al. Hedonic modeling of commercial property values: distance decay from the links and nodes of rail and highway infrastructure. Transportation 46, 859–882 (2019). https://doi.org/10.1007/s11116-018-9861-z
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DOI: https://doi.org/10.1007/s11116-018-9861-z