The Effects of Accessibility Gains on Residential Property Values in Urban Area: the Example of T2 Tramway in Hauts-de-Seine Department, France
E Boucq, EQUIPPE, Lille I University, FR
We econometrically measure the added value of accessibility gains induced by a transport infrastructure in residential property values, by a hedonic price function. We show that the accessibility improvements are capitalized into housing prices.
The aim of these research works is to analyse how are formed the residential property values in urban area, and the role of transport infrastructures in their formation. More precisely, we want to measure the added value of accessibility gains induced by the transport infrastructure in residential property values.
This question is crucial in a context of public funds scarcity for financing new transportation projects, and these added values could contribute to their financing.
We have taken the example of T2 tramway, opened in Hauts-de-Seine department on september 1997. This line was initially a railway, closed on 1993. This infrastructure improved noticeably the accessibility in the department.
According to the urban economic theory, the accessibility improvements due to the transport project will influence the residential location choices of the households. Hence the demand for land occupation will be affected and the land rents at equilibrium will include the valuation of accessibility gains made by these households. In this case we observe a ?capitalization phenomenon?.
But accessibility is not the only determinant for choosing a housing. This choice also depends on the housing inner characteristics (surface area, equipment, type of dwelling,?) and external characteristics such as environment, school proximity, other public goods proximities?
After having listed all these variables and for taking into account all these determinants, we have used the hedonic analysis method. This method suppose that the value of a good results from the combination of all these characteristics values.
So we have econometrically estimated a hedonic price function of residential properties.
The data used are sales of residential dwellings in Hauts-de-Seine department, that contain prices and inner characteristics of the dwellings, and the population census and other sources, that contain external characteristics. We have used a long term period, from 1993 to 2004, to take into account anticipation and learning effects.
The results show that the T2 tramway accessibility improvements are capitalized into housing prices. We measure the amount of all these added values.
The Henry George Theorem states that, in an optimal city, the urban public infrastructures are financed by differential land rents.
A land taxation for the landowners would allow recovering the added values due to accessibility improvements.
Association for European Transport