Comparing the Capitalisation Benefits of Light-rail Transit and Overlay Zoning for Single-family Houses and Condos by Neighbourhood Type in Metropolitan Phoenix, Arizona

Abstract

Light rail transit (LRT) is increasingly accompanied by overlay zoning which specifies the density and type of future development to encourage landscapes conducive to transit use. Neighbourhood type (based on land use mix) is used to partition data and investigate how pre-existing land use, treatment with a park-and-ride (PAR) versus walk-and-ride (WAR) station and overlay zoning interrelate. Hedonic models estimate capitalisation effects of LRT-related accessibility and overlay zoning on single-family houses and condos in different neighbourhoods for the system in metropolitan Phoenix, Arizona. Impacts differ by housing and neighbourhood type. Amenity-dominated mixed-use neighbourhoods—predominantly WAR communities—experience premiums of 6 per cent for single-family houses and over 20 per cent for condos, the latter boosted an additional 37 per cent by overlay zoning. Residential neighbourhoods—predominantly PAR communities—experience no capitalisation benefits for single-family houses and a discount for condos. The results suggest that land use mix is an important variable to select comparable neighbourhoods.