|M.Sc Student||Assis Dalia|
|Subject||The Tel-Aviv Light Rail Transit and the Price of|
Residential Apartments near Station Locations in
the Planning Period
|Department||Department of Architecture and Town Planning||Supervisor||Professor Pnina Plaut|
|Full Thesis text - in Hebrew|
What is the effect of proximity to LRT (Light Rail Transit) stations on residential property values? Proximity may improve accessibility to business districts, which may increase property values. The same proximity may have a negative impact on nearby properties due to noise, air pollution and congestion. Proximity also has dynamic effects, where the different stages of planning, design and construction processes of new transportation infrastructure could affect property values differently. In a competitive market buyers assess the property values based upon both the present value and expectations of future proximity effects.
The literature emphasizes three main factors that explain the impact of transportation station construction upon property values: 1. the actual distance; 2. the station's environmental effect upon the neighborhood; and 3. the development stage of the station (planning, construction, or operation).
This study examines the impact of the LRT plan in Tel-Aviv on residential property prices during the planning stages. It utilizes the Hedonic Pricing Methodology to examine apartment prices with proximity to different centers before and after the plan approval. The dataset is based on a total of 462 transactions carried out between 1998 and 2006. All transactions were sampled from a radius of up to 1000 meters around the planned Bialik Train Station in Ramat-Gan. The sample was divided into the time before plan approval (October 2003) and after.
Results show that after the approval the pattern that explains residential property prices in the before approval subset disappears. In the before approval period, the closer the property was to the main road, the lower the prices of the residential properties were. Also, the distance from the city center was found to be a significant variable in explaining residential property prices. These results support urban economic models. In contrast, post-approval transaction prices do not show the same pattern with proximity to city center and station.
Several conclusions are drawn: 1. the housing market responses to potential changes the LRT station might bring to the residential area; 2. the formation of this effect is not yet clear as the plan is in its early stage, thus, it is yet too early to predict whether the LRT station will cause price increase or decrease; 3. although the future trend is yet unclear, the study provides evidence concerning overall price changes before and after plan approval. Further studies are required, both during the construction and during operation stages of the LRT.