The Tucson Modern Streetcar celebrates its 1st Anniversary of operation this weekend, with ridership that has exceeded goals - averaging over 4,000 riders per month (11% over the expectation of 3,600 monthly riders). The Sunlink Streetcar posted 1,000,000 passenger rides about 6 weeks ahead of schedule this May. Many new businesses and tens of millions of dollars in private investment have started transforming the corridor along the route to great fanfare, but lost in the hype & hoopla was the answer to the question: "What effect has the streetcar had on residential real estate values?" Nobody had performed a study on that subject!
Earlier this year, the Arizona Senate Transportation Committee was taking a look at public transit infrastructure & wondering whether there had been side benefits to fixed-route (streetcar, light rail, etc) projects. Senator Bob Worsley (R-Mesa), the Chair of the Senate Transportation Committee asked me to put together an analysis for the committee - to show positive or negative the effect, if any, the Tucson Streetcar had on residential real estate values. The results were much more than what I expected, given the timing of the Great Recession between voter approval & construction of the line. The areas serviced by the route are Downtown Tucson, 4th Avenue & the University of Arizona - with the Mercado District of Menlo Park at the west end of the streetcar line.
What I did is compare the average price of all residential properties within 1/2 mile of the Tucson Streetcar route to that of the base Tucson Metro. In order to get a solid baseline to begin with, I went back to the year 2000 - well before the creation of the Regional Transit Authority (approved by voters in 2006) which included plans for a streetcar as one of the projects.
Basically, property values were virtually the same in the Tucson Metro and the Streetcar Corridor in 2000. Prior to the RTA being approved by voters in 2006, we started seeing some separation between the values in the 2 areas - partially due to a high-end "green" housing development selling historic-style homes with solar electric panels beginning in 2004.
The startling difference was seeing the value performance of the Streetcar Corridor vs the Tucson Metro during the crash: residential property within the corridor only lost 12.7% of value vs 23.1% for the metro! As the market started digging out of the rubble in 2010 to the end of 2014, values in the corridor rose at a rate 100% faster than the rest of the Tucson Metro.
Another point of interest to me was the spike in numbers of transactions each time a milestone was reached to bring the Modern Streetcar project to fruition in Tucson. I am interested to see if there will be another surge in purchases around the July 25 anniversary date.
Whether people see investment in light rail or streetcars as a worthy use of public dollars - if your community has a new project in the works for the near future, predicting greater performance near the rail lines might well be a reasonable expectation vs the rest of the market...at least in the beginning. You know I'll be following the data for long-term performance measures.