A recent Center for Housing Policy review of literature evaluates the relationship between housing and transportation and finds considerable evidence that the cost of housing rises with proximity to public transit. However, the degree to which transit is associated with higher housing costs remains contentious; studies cite a broad range of cost premiums associated with housing situated near transit. Generally, researchers cite a modest cost premium of up to 10%, but other studies suggest negative effects and others find premium prices of upwards to 45%.
According to the review, several factors can contribute to the rising cost of housing near transit. Among these factors, the reliability and quality of the transit system is a key element. Researchers found the highest cost premiums are associated with housing near transit in metropolitan regions with robust transit systems, zoning codes encouraging density and mixed uses, and a strong economy.
While some studies demonstrate that transit accessibility tends to primarily increase the cost of housing in already affluent communities, several other studies in the review suggest that lower income communities are likewise affected. The latter research includes a study that found 15% to 30% housing price hikes in low income communities near planned rail in Atlanta. Such an increase in housing costs can displace long-time residents and increase housing cost burdens on those households who remain.
The Center for Housing Policy suggests several strategies to mitigate rising housing costs and reduce displacement around transit oriented development projects. Preserving affordable housing near transit through public investment in existing properties is noted as the most cost-effective strategy. Other suggested strategies include establishing inclusionary zoning ordinances, setting aside funds from Tax-increment financing (TIF) for affordable housing, and acquiring land for affordable housing. Lastly, the Center for Housing Policy encourages the Federal Transit Administration to consider a municipality’s commitment to affordable housing in their fund allocation process.
The literature review, Public Transit’s Impact on Housing Costs, can be found on the Center for Housing Policy’s website at http://www.nhc.org/media/documents/TransitImpactonHsgCostsfinal_-_Aug_10_20111.pdf