Is the Light Rail 'Tide' Lifting Property Values? Evidence from Hampton Roads, Virginia

29 Pages Posted: 5 Dec 2016

See all articles by Gary A. Wagner

Gary A. Wagner

University of Louisiana-Lafayette; University of Louisiana-Lafayette

Tim Komarek

Valdosta State University

Julia Martin

Old Dominion University

Date Written: November 30, 2016

Abstract

In this paper we examine the effect of light rail transit on the residential real estate market in Hampton Roads, Virginia. The Norfolk Tide light rail began operations in August 2011 and has experienced disappointing levels of ridership over its first four years of operations. We estimate the effect of the Tide using a difference-in-differences model and consider several outcome variables for the residential housing market, including sales price, sales-list price spread and the time-on-market. Our identification strategy exploits a proposed rail line in neighboring Virginia Beach, Virginia, that was rejected by a referendum in 1999. Overall, the results show negative consequences from the constructed light rail line. Properties within 1,500 meters experienced a decline in sales price of nearly 8 percent, while the sale-list price spread declined by approximately 2 percent. Our results highlight the potential negative effects of light rail, when potential accessibility benefits do not outweigh apparent local costs.

Keywords: light rail transit, housing market, difference-in-difference

JEL Classification: R3, R4

Suggested Citation

Wagner, Gary A. and Komarek, Timothy and Martin, Julia, Is the Light Rail 'Tide' Lifting Property Values? Evidence from Hampton Roads, Virginia (November 30, 2016). FRB of Cleveland Working Paper No. 16-26. Available at SSRN: https://ssrn.com/abstract=2879588

Gary A. Wagner (Contact Author)

University of Louisiana-Lafayette

LA
United States

University of Louisiana-Lafayette ( email )

Lafayette, LA 70504
United States

Timothy Komarek

Valdosta State University ( email )

1500 N Patterson Street
Valdosta, GA 31698
United States

Julia Martin

Old Dominion University ( email )

Norfolk, VA 23529-0222
United States

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