Light Rail Proximity: Benefit or Detriment in the Case of Santa Clara County,California?

Abstract

When the public sector sponsors projects to promote general welfare, disproportionate benefits or disproportionate burdens often fall on individuals. In Santa Clara County, California, private property owners sued the county for damages, claiming a burden due to the existence of light rail transit (LRT). By looking at rental rates for commercial property, the present research tests several hedonic specifications to determine what effect, if any, LRT has on proximate property values. It also compares transit accessibility with highway accessibility as determinants of rent. An understanding of this effect allows the county to make informed decisions in its defense against the suits brought and allows other government entities to make informed decisions with respect to the building of future LRT systems. The results indicate that, when controlling for other factors, properties that lie within 0.8 km (0.5 mi) of a light rail station command a higher lease rate than other properties in the county. When controlling for highway access, the rail proximity benefit was maintained, and it was shown that highway coverage in the county is so dense that there are no particular locational advantages associated with highway coverage.

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