End of the line: The impact of new suburban rail stations on housing prices

Abstract

This study leverages the staggered opening of new Metro stations in a suburb of Washington, DC to estimate the impact of proximity to public rail transit on housing prices. Both hedonic and repeat sales models indicate that housing prices increase as distance increases, suggesting that living near public transportation in Prince George’s County is primarily viewed as a disamenity. For properties at one mile from the nearest station, the preferred repeat sales model estimates a marginal price increase of 4.6 percent for a one-mile increase in distance. I argue that the suburban environment may be key in explaining the results. In the suburbs, a greater share of the population relies on automobiles, and rail stations are typically equipped with large parking lots. The suburban environment allows households the opportunity to both benefit from public transportation access and mitigate the negative externalities associated with living right next to the station.