Housing Value and Light Rail Transit Construction: Evidence from Three Essays

Abstract

In three essays, this dissertation explores what’s the determinants of multifamily rents and whether an anticipated investment in light rail transit influences multifamily rents and single-family housing prices in the rail transit pre-service period. In the first essay, I applied a multilevel linear model approach to account for the multifamily housing hierarchical data structure, and assessed the effects of service provision and management on multifamily rents. The findings show that pet allowance, availability of a short-term lease, and storage service increase rents significantly, while general renovations and availability of services for those with disabilities do not increase rents.

The second essay empirically tests whether light rail transit in the pre-service period impacts multifamily housing rent in the transit corridor. Two approaches, a first-difference method and a difference-in-difference method, are used to test the research question. The results indicate that the rents of two-bedroom, three-bedroom, and four-bedroom units within a half-mile from planned light rail stops have significantly increased from 2015 to 2018 compared with the rent of units in other areas in Montgomery County.

The third essay examines the temporal and spatial variation of the effect of the Purple Line on single-family home prices during the rail line pre-service period. The results show that the housing market saw a premium in 2012, the year the Purple Line project progressed into the preliminary engineering phase. The results also show that the effect of the new light rail transit line is distributed unevenly across the catchment areas of newly built stations and established stations.