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TOD's Impact On Single-Family Neighbors

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Transit-oriented development is valuable for transit, increasing the number of potential riders near stations. But what impact does situating a mixed-use, higher density project in a suburban setting have on nearby single-family neighborhoods?

The Mineta Transportation Institute at San Jose State University sought to answer that question in its study, "Effect of Suburban Transit Oriented Developments on Residential Property Values."

"The development of successful transit-oriented developments often encounters several barriers," the study notes. "These barriers include: a lack of inter-jurisdictional cooperation, auto-oriented design that favors park and ride lot over ridership-generating uses, and community opposition. The community opposition may be more vocal in suburban areas where residents of predominately single-family neighborhoods may feel that the proposed high-density, mixed-use TOD will bring noise, air pollution, increased congestion and crime into their area. Community opposition has been instrumental in stopping many TOD projects in the San Francisco Bay Area."

Little research exists on the subject of TOD impact on surrounding residential neighborhoods. To fill that research gap, the researchers empirically estimated the impact of four San Francisco Bay Area suburban TODs on single-family home sales.

"Economic theory suggests that if a TOD has a negative effect on the surrounding residential neighborhoods, then that effect should lower land prices and in turn, the housing prices in these neighborhoods," the researchers explain. "Similarly, an increase in the housing prices would mean a positive effect of TODs on the surrounding neighborhoods." 

Of the four suburban Bay Area transit-oriented developments studied, none had a negative  impact on single-family home prices and one TOD project was shown to have increased the value of neighboring properties by  1.5 percent.

"All levels of public officials and professional staff can use the study results as they educate the existing residents about the potential impacts of TODs," the researchers explain. "Furthermore, accurate estimation of the monetary benefits of the TODs will help in assessing the use of these developments as an economic development tool."

This study has been added to the Best Practices.

Effect of Suburban Transit Oriented Developments on Residential Property Values