Should the Rising Value of Homes near Transit Stations Fund Public Transit Projects? The Impact of Warm Springs BART Station on the Value of Neighboring Residential Properties in Fremont

MTI research finds that the increase in property value could have funded the entire Warm Springs BART extension
May 29, 2019
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San José, CA

Mineta Transportation Institute (MTI) research finds that the addition of a BART station in Fremont, CA drove property values high enough to have paid for the entire BART project, raising the question of using the increased home values or “value capture (VC)” to fund such transit projects. In “Value Capture to Fund Public Transportation: The Impact of Warm Springs BART Station on the Value of Neighboring Residential Properties in Freemont, CA” MTI Research Associate, Dr. Shishir Mathur, used statistical analysis to estimate the property value changes around the new station before and after the project’s announcement. Using tax assessor data for Alameda and Santa Clara Counties, the report findings revealed that:

  1. Proximity to the Warm Springs Station is associated with a 9-15% increase in the price of single-family houses.
  2. The entire Warm Springs extension, an $802 million project, could have been funded if owners of single-family houses had shared around 18% of the property value increase.

The study findings support advocacy efforts in the San Francisco Bay Area and nationally for using value capture tools to fund transit projects. Furthermore, these findings also quell the concerns expressed by NIMBYs (“Not in My Back Yard”), regarding rail transit’s negative impact on property values.

“While some may argue that requiring property owners to share property value increment is akin to taxing them, it is important to note that publicly funded infrastructure projects lead to private gains,” explains Dr. Mathur, adding that “in the long run, the private property owners also benefit, because more of the publicly-funded infrastructure can be provided if VC revenues are available to fiscally-constrained public agencies.”

ABOUT THE MINETA TRANSPORTATION INSTITUTE

At the Mineta Transportation Institute (MTI) at San Jose State University (SJSU) our mission is to increase mobility for all by improving the safety, efficiency, accessibility, and convenience of our nation's’ transportation system. Through research, education, workforce development and technology transfer, we help create a connected world. MTI was founded in 1991 and is funded through the US Departments of Transportation and Homeland Security, the California Department of Transportation, and public and private grants. MTI is affiliated with SJSU’s Lucas College and Graduate School of Business.

ABOUT THE AUTHOR

Dr. Shishir Mathur is an MTI Research Associate as well as the Associate Dean of Research at the College of Social Sciences and a Professor of Urban and Regional Planning at San Jose State University.

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Contact:

Irma Garcia, MTI Communications & Workforce Development Coordinator

408.924.7560

irma.garcia@sjsu.edu