Mass Transportation, Apartment Rent and Property Values

J. OF REAL ESTATE RESEARCH, Vol. 12 No. 1

Posted: 6 Jun 1997

See all articles by John D. Benjamin

John D. Benjamin

American University - Kogod School of Business

G. Stacy Sirmans

Florida State University - Department of Risk Management/Insurance, Real Estate and Business Law

Abstract

Rent plays a vital role in property valuation because anypositive or negative influence on rent will in turn affect aproperty's value. This paper examines the effect of masstransportation on apartment rent. Specifically, this studyinvestigates the impact on rent and value for residentialincome properties located in close proximity to Washington,D.C. Metrorail stations. After reviewing the empiricalresearch which has focused on the effect of masstransportation availability on property values, this paperexamines the benefits on apartment rent of Washington, D.C.apartment buildings from location near Metrorail stations.Our empirical results show that distance from a metrostation has an adverse effect on apartment rent, i.e., eachone-tenth mile increase in distance from the station resultsin a decrease in rent per apartment unit of about 2.50%.This analysis should be of interest to a host of domesticand international market participants including academicswho study real estate markets, tax assessors who determinemarket value, appraisers who make market-derived rentadjustments, and property managers who set apartment rents.

JEL Classification: R32

Suggested Citation

Benjamin, John D. and Sirmans, G. Stacy, Mass Transportation, Apartment Rent and Property Values. J. OF REAL ESTATE RESEARCH, Vol. 12 No. 1, Available at SSRN: https://ssrn.com/abstract=9276

John D. Benjamin

American University - Kogod School of Business ( email )

4400 Massachusetts Avenue NW
Department of Finance
Washington, DC 20016
United States
(202) 885-1892 (Phone)
(202) 885-1946 (Fax)

G. Stacy Sirmans (Contact Author)

Florida State University - Department of Risk Management/Insurance, Real Estate and Business Law ( email )

College of Business
Tallahassee, FL 32306
United States
850-644-8214 (Phone)
850-644-4077 (Fax)

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