How Modern Transit and Highways Affect Property Values
The Closer You Are The Better?
As was mentioned above, noise from a busy highway has a seriously negative impact on property value. This would seem especially true for individuals whose property is closer to the highway. However, the opposite may be the case— statistical models from one transit rail study showed that with every meter a house was located to a particular railway station, property values went up by $2.29. While this doesn’t seem like much, the study showed that houses immediately adjacent to the stations sold for 38% more. So is closer always better? Is there some truth to the classic economic theory—when a highway is initially built, large parcels of land that previously had poor accessibility – or none at all – are suddenly undervalued? Yes, it seems intuitive that if you go from limited transit access to the immediate proximity of modern transit, then your home value will increase. However, let’s say a highway was not present during the time your home was purchased or built—wouldn’t the introduction of a busy highway decrease your property value? Well, the answer is— it depends. This study on property values and highway expansions show that home values depend on numerous factors such as proximity, noise, emissions, vibrations, etc… Simply put, it’s complicated.
Highways Create Land-Locked Issues
Highways can also create what is known as a land-locked situation. This situation can also decrease the value of a particular property. This is mostly due to its lack of appeal for buyers when they have to find an alternate route into the property. A land-locked property occurs when the Department of Transportation (DOT) turns a ‘back road’ into a highway. Most often, this happens in rural areas where DOT decides to put a highway through a current farm or farm road. After all, expansion is the name of the game, right? And a new highway usually means the future encroachment of big cities into the suburbs. When DOT does this, individuals may not be able to access their properties as they once had. They may have to go through neighbors’ properties or find new routes. When a property cannot be easily accessed by the owner, it decreases the property value—nobody wants to invest money into a property they cannot get to without a hassle. On the flip side, access to a new highway may drastically increase the value of surrounding homes. It’s all about perspective.
Increased Traffic, Decreased Safety
Obviously, a highway brings more traffic to the area. While this is a positive impact from a business perspective, it can be a negative impact on a residential community. Areas that have been looked at as being good family neighborhoods may not hold this appeal once a highway is put in. Highways bring a lot of vehicles driving at various speeds. Homeowners, particularly those with children, will find this unappealing when purchasing a home. If a home is already built in an area and then a highway comes in, it becomes less appealing, for safety reasons. Parents want to know that their kids can play in the yard without having to worry about a 6-car pile-up, or drunk drivers, or vehicles traveling at high rates of speed. Not to mention, the new accessibility of your home to devious people. All of these factors will make home values decline and make it hard to sell. Try to protect your assets by investigating future city plans before buying. If it is already too late and the highway has been constructed, then be creative with exterior home designs such as fences, gated courtyards, waterfalls to drown out the noise, security, and green walls that beautify and act as sound barriers.
Highways Can Have a Positive Impact on Property Value
As mentioned above, not all properties are negatively impacted by highways. In fact, there are several situations where highways can actually increase property value. This is particularly true for commercial areas. Commercial properties that have limited access can benefit from the addition of a highway. More people passing through equals more business. Of course, this increased exposure increases the profits of the business and the property value. You do, however, want to make sure that when the highway is put in that your business can be easily and safely accessed. You may want to talk with city planners to discuss whether your business needs a traffic light, as safety and available parking can make the difference between a person dropping in, or driving on by.
As you can see, there are numerous ups and downs to having a property near a major highway. There are so many factors to consider, and whether your home value goes up or down truly depends on accessibility, noise, location, safety, and emissions, etc…When purchasing a new home it is important to take into consideration the transitways and highways around the property. If there are plans for a major highway, it could cause some noise issues, causing your property value to decrease. On the other hand, if there are plans for a new transit station that makes the big-city commute more accessible, you could watch your property values soar! Are you living near a busy highway? If so, do you love it or hate it?