Investigation of the impact of railways on housing values; the case of Istanbul, Turkey

Abstract

Housing units located near transportation facilities tend to have a higher market value than those that are at a greater distance to transport facilities but have similar characteristics. Provision of public infrastructure has a great impact on urban areas, especially on urban development patterns, spatial distribution of urban land use and real estate values. Mass transit systems are one of the most important public infrastructures in cities. Mass transit operations have a significant effect on property values, since they increase accessibility in urban areas. Railway projects are long-lasting investments and by their nature are extremely expensive when compared to other land transportation modes. It is not always possible or reasonable for many countries to fund these high-price projects only with their national budget generated by taxes collected from all citizens. Literature suggests that property values tend to rise in parallel to land values after any kind of public infrastructure investment. Nowadays transportation, especially railway system investments, is regarded as the most important public infrastructure in urban areas impacting land values maximally. Railway investments are becoming widespread in Turkey, especially in Istanbul as Istanbul is the most important and most populated city in country. As due to their high operation costs urban public transport systems, especially railway systems, rarely make a profit, private investors are not willing to get involved in these projects. Furthermore, it is not possible to finance all rail system investments from public funds. This article aims to prove the impact of railway systems on housing values and investigate the possibility of internalizing this increased value for financing railway investments. The main objective of this article is to calculate the impact of distance to a railway station on the value of properties by using the hedonic price model on an existing railway corridor and applying this anticipated impact on a proposed railway corridor. Finally, the calculated value is used as a preliminary basis as a funding model for railway projects in developing countries like Turkey.

Nonlinear Rail Accessibility and Road Spatial Pattern Effects on House Prices

“…To be specific, Ronghui Tan et al, (2019) researched subway traffic in Wuhan, finding that ordinary rail stations affected the price of surrounding properties within 1600 m, while transfer stations influenced that within 4800 m [5]. Moreover, Elif Can Cengiz et al, (2019) pointed out that the price of properties was higher near subway station facilities than those in the distance [6]. Since the road's spatial pattern is very decisive for road accessibility, the quantitative evaluation of the spatial pattern form can deeply reflect the degree of road accessibility.…”

Where and how much?

“…Our methodology differs from existing studies reviewed in section 1.2 (e.g. Cengiz et al, 2019;Gallo, 2018;Pettit et al, 2020). The land value model proposed in chapter three, further developed in Chapter four and utilized in Chapter five relies on explicit accessibility as it accrues to users and not as a function of aerial proximity to transport infrastructure.…”

“…The planning of sustainable transport infrastructures -such as Light Rail Transit (LRT) and Bus Rapid Transit (BRT) systems -is of growing interest in many Global South countries as a sustainable strategy to meet the challenges of rapid urbanization (Alade, Edelenbos & Gianoli, 2020;Banister, 2007;Cengiz & Çelik, 2019;Ferbrache & Knowles, 2017;Gleave, 2005;Ingvardson & Nielsen, 2018;Liu & Shen, 2011).…”

“…The model was calibrated using observations of asking prices aggregated at the district level for Naples. Cengiz et al (2019) also used a non-spatial linear regression approach to estimate elasticities of property values as a function of Euclidian distance to existing transport stations. The model was calibrated using property values within the commonly used 0.5 km catchment area of an existing transport corridor.…”

“…The planning of sustainable mobility such as Light Rail Transit (LRT) and Rapid Bus Transit (BRT) systems is of growing interest in many global south countries as a sustainable strategy to face the challenges of rapid urbanization (Banister, 2007;Cengiz et al, 2019;Ferbrache et al, 2017;Gleave, 2005;Ingvardson et al, 2018;Liu et al, 2011). These accessibility improvements can have wider effects such as economic land values uplifts (Ahlfeldt et al, 2011;Banister et al, 2011;Filatova et al, 2009;Giuliano et al, 2010;Mohammad et al, 2013).…”