Estimating the Land Value Uplifts Resulting from Rapid Transit - a Stated Preference Approach

Estimating the Land Value Uplifts Resulting from Rapid Transit - a Stated Preference Approach


O'Brien, R Fickling, Mott MacDonald, UK


This paper investigaties the propensity to pay more for properties based on the accessibility of Light Rapid Transit. The aim is to estimate the land value uplift that LRT schemes add to property, which could compound the case for many schemes.


It is widely accepted that proximity to transport infrastructure plays an important role in influencing where many people choose to live. During the last decade a period of unprecedented activity has taken place in the housing market, with both house prices and rents increasing rapidly in most countries in the EU. It may be expected that properties with good access to transport infrastructure, including light rail services, will have experienced greater increases in value than identical properties with inferior access. At this moment in time, however, little evidence exists on which to base estimates of the likely ?land value uplift? that transport adds to individual properties, though analysis has been made as to the benefits accruing to land value for heavy rail schemes in London. It is therefore difficult to fully estimate the housing and property impacts of new infrastructure in conventional transport scheme appraisal, particularly for the mode of Light Rapid Transit (LRT).

This paper seeks to go some way towards bridging this knowledge gap for LRT by investigating the propensity of house buyers and renters to pay more for properties based on the relative accessibility of light rail services, based upon the use of stated preference techniques. It is believed that the conclusions argue in favour of the levering of development-related funding for major public transport schemes.

Most previous studies taking place in the UK concerning transport-stimulated land value uplifts have tended to focus on a top-down approach to measuring impacts using longitudinal, aggregated datasets. The methodology employed in this study consisted of a stated preference experiment in which respondents were presented with alternatives involving ?identical dwellings? which differed only in terms of their price/rent and the availability of a LRT service, the latter expressed as either LRT or not, and then the access time to and the frequency of LRT when offered. Surveys were undertaken on both a corridor with existing LRT provision and on one without LRT, for both buyers and renters, and with a stratified sample reflecting high and low house prices and rents. In total 371 surveys were completed, each consisting of an attitudinal questionnaire and a stated preference exercise of seven ?games?. The research was undertaken in the City Region around Birmingham on behalf of Centro, the West Midlands Passenger Transport Authority.

Estimates were derived from the resulting dataset of respondents? willingness to pay for a dwelling given access to LRT services, and then the value of good access and the service frequency. The primary objective of this is to estimate the difference in value between an ?average? dwelling with and a dwelling without LRT nearby. Across all responses the results suggest that all other things being equal, proximity to LRT would add approximately £5,000 to the average price of a property, and £17 to the average monthly rent of a property in the study area. A ten minute improvement in access walk time to LRT would add approximately £1,250 to a house price, and £2.50 to the monthly rent of a property. Evidence was however found that a lower value is placed on proximity to LRT by respondents living along a corridor without LRT, suggesting that habitual car use and perhaps negative views towards current public transport modes had coloured the view towards a new mode of LRT.

The net effect of this uplift is potentially very substantial in terms of the land value benefits that may be accrued from major corridor-based schemes. When allied to the positive impacts also brought to commercial and retail properties (as found in other UK studies), this evidence on housing cements the idea that land value uplifts offer policy makers a compounded argument for promoting and funding LRT schemes.


Association for European Transport