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Tuesday, December 2, 2008

TRAX in Daybreak - Real Estate Boost?

As we experience a declining housing market in the U.S., it is important to consider the geography of areas both losing and gaining property value. In Utah we are currently seeing some neighborhoods decline as they are primarily constituted of homes in the higher price ranges. Beyond this trend, there is another subtle trend that I have noticed taking place across the country. Homes within a walkable distance to light-rail stations are fairing better in this down market and some are even gaining value.

The Washington post reported on this trend, showing the percent change in the median home price of individual zip codes of Washington D.C. and its surrounding counties. The paper found that areas without direct access to metro stations - ones that were typically suburban in nature - experienced greater losses in median home value.

In Denver, where they have pushed light-rail construction heavily, the Denver Post reported that values have increased for homes near light-rail stations:

Margarete Humphrey knows her bungalow near the Louisiana Station light-rail stop is in a hot neighborhood. But she was surprised to learn the value of her home has increased over the past two years as much of the metro Denver housing market has declined. Homes near light-rail stations along the southeast line, which opened in November 2006, have increased by an average of nearly 4 percent over the past two years, according to an analysis by Your Castle Real Estate. But the rest of the Denver market declined an average of 7.5 percent.
While most of the studies indicate that transit increases property values, there are a few that have found that it decreases property values. In looking at these studies these negative impacts occur because of the negative side effects that are realized by those properties located right next to rail facilities. The noise, aesthetics, and traffic were cited as the primary culprits. In these studies homes that were in extreme close proximity lost value, but homes further away (but still within walking distance) gained value. However, most of these negative impacts can be mitigated by proper planning. The Daybreak plan looks to mitigate these factors as the TRAX line follows commercial, industrial, and retail properties in its penetration of the community. So these "nuisance effects" are absorbed by these non-residential areas that actually benefit from the traffic of cars and people. Further benefit is realized as these non-residential properties will be using the TRAX parking to their benefit.

So how does transit increase property values? Because it increases access to area destinations for residents in close proximity to transit stations. It is for this very reason that TRAX may be able to add maximum value to the Daybreak community. Daybreak essentially lies on the fringe of development in Southwest Salt Lake County. To get to most destinations, residents must travel either East or North to arrive there. Right now there are limited options to do this and accessibility is definitely a problem. TRAX offers a direct route to Salt Lake City, the University of Utah, various sports complexes, shopping centers, commuter rail, etc. While gas prices have recently gone down drastically, I do not expect them to stay there. The more gas prices increase the more people will see TRAX as their best transportation option. This will only increase property values more.

Overall, transit adds value to communities like Daybreak regardless of the economic climate. Neighborhoods and communities with strong connectivity will thrive in the long-term. Transit has the ability to increase (or at least sustain) value because it provides more people with access to essential destinations in a given area; it also improves one's quality of life in congested metropolitan areas such as the Wasatch Front.


Anonymous said...

Where does the Trax budget reside in the recent announcement about budget and roadway construction project cuts?

Daybreak Man said...


I know a couple of people at UTA and while this is not official, they claim that the mid-jordan line will not be affected in the foreseeable future. It seems that the mid-jordan line is the priority at this point, but I would not call that fact unless Mike Allegra states it in the press.

Anonymous said...

UTA retains its own funding seperate from UDOT (which is where the funding was cut). In the mid-jordan rail's situation, the funding had been allocated several years ago and won't be going anywhere anytime soon. Besides, the UDOT cuts will be relieved in the near future... many of my colleques believe that this was done in an attempt to gain federal money from a plan that Obama is putting together for when he takes office. Huntsman is working on a plan as well to relieve the funding challenges that exist.