Comparing Rail Transit Capitalization Benefits for Single-Family and Condominium Units in San Diego, California

Abstract

This research analyzes and compares the effects that rail transit stations have on values of condominiums and single-family homes in San Diego, California. It is hypothesized that households on the market for a condominium will value proximity to rail stations more than those on the market for a single-family home will and therefore the capitalization benefits are greater for condominiums. Past research has shown that property near rail stations sells at a modest premium (between 0% and 10%) in many U.S. cities. However, most of these studies focus on single-family homes. The hedonic price analysis presented in this paper indicates that condominiums receive capitalization benefits in excess of 10%, whereas the benefits received by single-family properties fall within the more typical range (<10%).