The effect of bus rapid transit on local home prices

Abstract

Bus Rapid Transit (BRT) systems have become increasingly common in US cities. BRT stations provide a local amenity by improving transportation options for local residents, but may also represent a local nuisance due to noise or displacement of other road users. We estimate whether BRT is priced into local real estate by studying a recently opened BRT project in Vancouver, Washington. We use a difference-in-difference method with both hedonic and repeat sales estimators to test for a price effect. We estimate a 5%–7% price premium for homes located within a 20 min walk of a BRT station. Overall, BRT generated new real estate value that exceeded the project's construction costs by a factor of six. We discuss how government could leverage future residential property value increases to fund construction of BRT projects.