Transit Development, Consumer Amenities and Home Values: Evidence From Beijing’s Subway Neighborhoods.

Posted: 11 Nov 2019

See all articles by Siqi Zheng

Siqi Zheng

Massachusetts Institute of Technology (MIT) - Center for Real Estate; Massachusetts Institute of Technology (MIT) - Department of Urban Studies & Planning; Hang Lung Center for Real Estate, Tsinghua University

Yangfei Xu

Tsinghua University - Hang Lung Center for Real Estate

Xiaonan Zhang

Tsinghua University - Department of Construction Management

Rui Wang

University of California, Los Angeles (UCLA)

Date Written: October 30, 2019

Abstract

While numerous studies have shown that rail transit investment increases property value close to stations, not much has been said on the transit-induced indirect changes in neighborhood amenities and their role in property market's response to transit investment. The rapid expansion of Beijing's subway system over the last decade provides a precious opportunity to research the transit — retail amenities — property value connection. This paper enhances our knowledge by studying how local consumer amenities react to urban rail transit development and subsequently reflect in consumers’ willingness to pay. Using multiyear subway construction history, station neighborhoods’ restaurant activities and rental housing transactions in Beijing, we find a new subway station positively contributes to the number of new openings and the diversity of nearby restaurants. The changes in neighborhood restaurant activities capture 20–40% of the home value appreciation following the construction of a subway station. Our findings support the “multiplier effect” of neighborhood retail amenities in rail transit's impact on local home value. The public investment in transit and the private market responses complement each other and together contribute toward urban quality of life, as revealed by the appreciation in local property values.

Suggested Citation

Zheng, Siqi and Xu, Yangfei and Zhang, Xiaonan and Wang, Rui, Transit Development, Consumer Amenities and Home Values: Evidence From Beijing’s Subway Neighborhoods. (October 30, 2019). Available at SSRN: https://ssrn.com/abstract=3478243

Siqi Zheng

Massachusetts Institute of Technology (MIT) - Center for Real Estate ( email )

Building 9-323
Cambridge, MA 02139
United States

HOME PAGE: http://https://siqizheng.mit.edu/

Massachusetts Institute of Technology (MIT) - Department of Urban Studies & Planning ( email )

77 Massachusetts Avenue
Cambridge, MA 02139
United States

Hang Lung Center for Real Estate, Tsinghua University ( email )

HeShanHeng Building
Beijing, 100084
China

HOME PAGE: http://https://siqizheng.mit.edu/

Yangfei Xu

Tsinghua University - Hang Lung Center for Real Estate ( email )

HeShanHeng Building
Beijing, 100084
China

Xiaonan Zhang

Tsinghua University - Department of Construction Management ( email )

Heshanheng Building
Tsinghua University
Beijing, 100084
China

Rui Wang (Contact Author)

University of California, Los Angeles (UCLA) ( email )

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States

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