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Open Access Publications from the University of California

The Value of Access to Highways and Light Rail Transit: Evidence for Industrial and Office Firms


This dissertation examines the relationship between transportation access and industrial and office property rents. The primary purpose of this research is to evaluate two sparsely studied topics in the transportation-land use literature: the impacts of light rail transit on property values, and the effect of transportation facilities on non-residential land uses.

Multivariate regression analysis is used on longitudinal data for approximately five hundred and twenty office properties and five hundred industrial properties collected from the San Diego metropolitan region over the period from 1986 to 1995. Asking rents ($/square foot/month) is the dependent variable. Straight-line distance of each property to the nearest freeway on/off ramp, the nearest light rail station, and to the San Diego central business district provide measures of access. Other independent variables include building and neighborhood characteristics.

The findings show that access to freeways is consistently significant in predicting office rents. This result indicates that freeways are important in shaping office property values, and by extension office land use patterns. Light rail transit did not have a significant effect on office rents. Access to the CBD was only significant for downtown office properties. The CBD variable in this case may be a proxy for the effect of localization economies. None of the measures of access was significant for industrial properties.

This research underscores the importance of refining measures of access in order to capture and better understand the transportation-land use relationship. In particular, if the distance of an industrial firm to freeways, light rail transit, and the CBD is not important, then what kinds of access do matter? This research also has important implications for planning light rail transit systems. There is strong evidence that light rail systems do not provide enough travel cost savings to increase non-residential property values. This finding should be taken seriously in planning alignments for future light rail systems. Light rail systems need to be aligned with existing activity centers, rather than expected to stimulate new development or the redevelopment of distressed urban areas.

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