Estimating the Effects of Light Rail Transit (LRT) System on the Property Values in the Klang Valley, Malaysia: A Hedonic House Price Approach
DOI:
https://doi.org/10.11113/jt.v61.1620Keywords:
Light rail transit systems (LRT), property values, hedonic price model, Klang ValleyAbstract
This study investigates the increased value of land in the form of house prices as a result of improved accessibility owing to the construction of Light Rail Transit (LRT) systems. Kelana Jaya Line LRT system is chosen as the case study in this research. Hedonic house price modelling is employed to estimate the effects of the LRT system on the prices of the house that are located within the radius of two kilometres from the Kelana Jaya LRT stations. Selling prices, structural attributes, land use and socio–economic attributes were collected from the database of Department of Valuation and Services of Malaysia, selected maps and reports. Fifty-five factors that are likely to influence a house price were identified and used to estimate the overall effects of the LRT system on it. However, only significant variables were included in the final deliberation and these were identified by using correlation analysis and modified step–wise procedures. The outcome of this study shows a positive relationship between the existence of the LRT system and house prices. In other words, properties that are located within close proximity to the LRT station are valued more than properties that are located further away.References
Al-Mosaind, M. A., Dueker, K. J. and Strathman, J. G. 1993. Light Rail Transit Stations and Property Values: A Hedonic Price Approach. Transportation Research Record. 1400: 90–94.
Armstrong, R. 1994. Impacts of Commuter Rail Service as Reflected in Single-family Residential Property Values. Transportation Research Record. 1466: 88–98.
Bajic, V. 1983. The Effects of a Subway Line on Housing Prices in Metropolitan Toronto. Urban Studies. 20(2): 147–158.
Bajic, V. 1984. An Analysis of the Demand for Housing Attributes. Applied Economics. 16: 597–610.
Banister, D. and Banister, C. 1995. Energy Consumption in Transport in Great Britain: Macro Level Estimates. Transportation Research A: Policy and Practice. 29A(1): 21–32.
Banister, D. and Berechman, Y. 2000. The Economic Development Effects of Transport Investment. Paper presented at the TRANS-TALK workshop, Brussels, [online], Available: www.iccr-international.org/trans-talk/docs/ws2-banister.pdf
Benjamin, J. D., and Sirmans, G. S. 1994. Mass Transportation, Apartment Rent and Property Values. Journal of Real Estate Research. 12(1): 1–8.
Boyce, D. E., Bruce, A. Mudge, R. R. Slater, P. B. and Isserman, A. 1972. Impact of Rapid Transit on Suburban Residential Property Values and Land Development: Analysis of the Philadelphia-Lindenwold High-speed Line. Final Report. Philadelphia: University of Pennsylvania, Department of Regional Science.
Can, A. 1990. The Measurement of Neighbourhood Dynamics in Urban House Price. Economic Geography. 66: 254–272.
Can, A. 1992. Specification and Estimation of Hedonic House Price Models. Regional Science and Urban Economics. 22: 453–474.
Cervero, R. and Duncan, M. 2001. Rail Transit’s Value Added: Effects of Proximity to Light and Commuter Rail Transit of Commercial Land Value in Santa Clara County, California. Paper Prepared for the Urban Land Institute, National Association of Realtors, Washington, D.C.
Cervero, R. and Duncan, M. 2002. Land Value Impacts of Rail Transit Services in Los Angeles County. Report Prepared for the Urban Land Institute, National Association of Realtors, Washington, D.C.
Cervero, R. and Landis, J. 1993. Assessing the Impacts of Urban Rail Transit on Local Real Estate Markets Using Quasi-experimental Comparisons. Transportation Research Part A. 27(1): 13–22.
Cevero, R. and Kang, C. D. 2011. Bus rapid transit impacts on land uses and land values in Seoul, Korea. Transport Policy. 18: 102–116.
Chen, H., Rufolo, A. and Dueker, K. J. 1997. Measuring the Impacts of Light Rail Systems on Single Family Home Values: A Hedonic Approach with GIS Application. Discussion Paper 97-3, Portland, Oregon: Portland State University.
Cheshire, P. and Sheppard, S. 2004. Evaluating the Impact of Neighbourhood Effects on House Prices and Land Rents: Result from an Extended Model. Discussion Papers in Urban and Regional Economics. University of Reading: Department of Economics.
Chesterton. 2000. Property Market Scoping Report. Prepared for the Jubilee Line Extension Impact Study Unit. Impact Study Unit. London: University of Westminster, Working Paper No. 32.
CURDS, TORG and DTCP. 1990. The Longer Term Effects of the Tyne and Wear Metro. A Report to the Transport and Roads Research Laboratory, Department of Transport by the Centre for Urban and Regional Development Studies, the Transport Operations Research Group and the Department of Town and Country Planning. University of Newcastle upon Tyne.
Dalvi, M. Q. 1978. Behavioural Modelling, Accessibility, Mobility and Need: Concepts and Measurement. Croom Helm.
Damm, D., Lerman, S. R., Learner-Lam, E. and Young, J. 1980. Response of urban real estate values in anticipation of the Washington metro. Journal of Transport Economics and Policy. 18(4): 315–36.
Dewess, D. N. 1976. The Effects of Subway on Residential Property Values in Toronto. Journal of Urban Economics. 3(4): 357–69.
Du, H. and Mulley, C. 2006. Relationship Between Transport Accessibility and Land Value: Local Model Approach with Geographically Weighted Regression. Transportation Research Record. 1977(1): 197–205.
Dueker, K. J. and Bianco, M. J. 1999. Light Rail Transit Impacts in Portland: The First Ten Years. Paper Presented at the 78th Annual Meeting of the Transportation Research Board, Washington, D.C., [online], Available: http://www.upa.pdx.edu/CUS/publications/docs/DP98-9.pdf [17 Jan 2006].
Dvett, M., Dornbusch, D., Fajans, M., Falcke, C. Gussman, V. and Merchant, J. 1979. Land Use and Urban Development Impacts of BART. Report No. DOT-P-30-79-09. Washington DC: US Department of Transportation and US Department of Housing and Urban Development.
Forrest, D., Glen, J., Grime, J. and Ward, R. 1996. House Price Changes in Greater Manchester 1990-1993 and the Impact of Metro Link. Journal of Transport Economics and Policy. 30(1): 15–29.
Federal Transit Administration. 2000. Transit Benefits. Washington, D.C: United States Department of Transportation.
Gatzlaff, D. and Smith, M. 1993. The impact of the Miami Metrorail on the Value of Residences Near Station Locations. Land Economics. 69(1): 54–66.
Garret, T. A. and Castelazo, M. D. 2004. Light Rail Transit in America: Policy Issues and Prospects for Economic Development. Federal Reserve Bank of St. Louis, [online], Available: www.cfte.org/news/garret.pdf
Giuliano, G. 2004. Land Use Impacts of Transportation Investments: Highway and Transit. In: S. Hanson and G. Giuliano (eds). The Geography of Urban Transportation. New York: Guilford Press.
Hanson, S. 2004. The Context of Urban Travel: Concepts and Recent Trends. In: S. Hanson and G. Giuliano (eds.). The Geography of Urban Transportation. New York: Guilford Press.
Henneberry, J. 1998. Transport Investment and House Prices. Journal of Property Valuation and Investment. 16(2): 144–158.
Hess, D. B. and Almeida, T. M. 2007. Impact of Proximity to Light Rail Rapid Transit on Station-area Property Values in Buffalo, New York. Urban Studies. 44(5-6): 1041–1068.
Knapp, G. J., Hopkins, L. D. and Ding, C. 1999. Do plans matter? Effects of light rail plans on land values in station areas. Lincoln Institute of Land Policy Working Paper.
Knight, R. and Trygg, L. 1977. Evidence of Land Use Impacts of Rapid Transit Systems. Transportation. 6: 233–147.
Knowles, R. D. 1996. Transport Impacts of Greater Manchester’s Metrolink Light Rail System. Journal of Transport Geography. 4(1): 1–14.
Landis, J. and Loutzenheiser, D. 1995. BART at 20: BART Access and Office Building Performance. Institute of Urban and Regional Development. Berkeley: University of California.
Landis, J., Guhathakurta, S., Huang, W. and Zhang, M. 1995. Rail Transit Investments, Real Estate Values and Land Use Change: A Comparative Analysis of Five California Rail Transit Systems. UCTC Working Paper No. 285. Berkeley: University of California Transportation Centre.
Lerman, S., Damm, D., Lam-Lerner, E. and Young, J. 1978. The Effects of the Washington Metro on Urban Property Values. Final Report No. UMTA-MA-11-0004-79-1. Cambridge, MA: MIT Press.
Lin, J. J. and Gau, C. C. 2006. A TOD Planning Model to Review the Regulation of Allowable Development Densities Around Subway Stations. Land Use Policy. 23: 353–360.
Litman, T. 2003. Evaluating Rail Transit Criticism. [online] Available: www.vtpi.org/tca
Litman, T. 2004. Rail transit in America: A Comprehensive Evaluation of Benefits. [online]. Available: www.vtpi.org/railben.pdf
Litman, T. 2004. Evaluating public transit benefits in St. Louis: Critique of ‘light rail boon or boondoggle’ citizens for modern transit. [online]. Available: www.cmt.stl.org/images/litman.pdf
Litman, T. 2007. Evaluating Rail Transit Benefits: A Comment. Transport Policy. 14: 94–97.
Litman, T. 2012. Evaluating public transit benefits and costs: Best practices guidebook. [online]. Available: http://www.vtpi.org/tranben.pdf
Loo, B. P. Y., Chen, C. and Chan, E. T. H. 2010. Rail-based Transit-oriented Development: Lessons from New York City and Hong Kong. Landscape and Urban Planning. 97: 202–212.
Marjan, J. M., Radin Sohadi, R. U. and Ahmad, S. K. 2007. Modelling Accidents Along Two Lane Single Carriageway Roads in Malaysia: Research Methodology & Data Collection. Seventh Malaysia Road Conference, 17-19 July 2007, Sunway, Malaysia.
Md Nor, A. R., Rostam, K., Choy, E. A., Mohamed, A., Sakawi, Z., Mat Nor, H. and Che Rose, R. A. 2011. Public Transport in Iskandar Malaysia Development Corridors: An Analysis of the Importance of Service Attributes. Australian Journal of Basic and Applied Sciences. 5 (7): 557–563.
Mohamad, J. and Kiggundu, A. T. 2007. The Rise of the Private Car in Kuala Lumpur: Assessing The Policy Option. IATSS RESEARCH. 31 (1): 69–77.
Nelson, A. 1992. Effects of Elevated Heavy Rail Transit Stations on House Prices with Respect to Neighbourhood Income. Transportation Research Record. 1359: 127–132.
Nelson, A. and McClesky, S. 1990. Improving the Effects of Elevated Transit Stations on Neighbourhood. Transportation Research Record. 1266: 173–180.
Olaru, D., Smith, B. and Taplin, J. H. E. 2011. Residential Location and Transit-oriented Development in a New Rail Corridor. Transportation Research Part A. 45: 219–237.
Orford, S. 1999. Valuing the Built Environment: GIS and House Price Analysis. Aldershot: Ashgate Publishing Ltd.
O’Sullivan, S. and Morrall, J. 1996. Walking Distance to and From Light Rail Transit Stations. Transportation Research Record. 1538: 19–26.
Parsons Brinckerhoff Quade & Douglas, Inc. 1998. Land use impacts of transportation: A guidebook’, [online], Available: http://nepa.fhwa.dot.gov/ReNEPA/ReNepa.nsf/All%2BDocuments/CCECF4D789DB510E85256CE6006142A0/$FILE/land_use_guidebook.pdf
Powe, N. A., Garrod, D. Willis, K. G. 1995. Valuation of Urban Amenities Using An Hedonic Price Model. Journal of Property Research. 12: 137–147.
Pucher, J. 2004. Public Transportation, in S. Hanson and G. Giuliano (eds.). The Geography of Urban Transportation. New York: The Guilford Press. 199–236.
Renne, J. L. 2005. Transit-oriented Development: Measuring Benefits, Analysis Trends and Evaluating Policy. Ph.D. thesis (unpublished), The States University of New Jersey, New Jersey.
Rosen, S. 1974. Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competitions. Journal of Political Economy. 72: 34–55.
Ryan, S. 1999. Property Values and Transportation Facilities: Finding The Transportation-land Use Connection. Journal of Planning Literature. 13(4): 412–427.
Smith, J. J. and Gihring, T. A. 2011 Financing transit systems through value capture: An annotated bibliography’, [online], Available: http://www.vtpi.org/smith.pdf
Sung, H. and Oh, J. T. 2011. Transit-Oriented Development in a High-Density City: Identifying Its Association With Transit Ridership in Seoul, Korea. Cities. 28: 70–82.
The Federal Territory Development and the Klang Valley Planning Devision. 2004. Progress report 5: 2001-2005, The application of geographic information systems (GIS) for the Klang Valley Region, Prime Minister’s Department of Malaysia.
VNI Rainbow Appraisal Service, Inc. 1992. Analysis of the Impact of Light Rail Transit on Real Estate Values. San Diego, CA: VNI Rainbow Appraisal Service.
Victoria Transport Policy Institute. 2011. Transit-oriented development: Using public transit to create more accessible and livable neighbourhoods. [online]. Available: http://www.vtpi.org/tdm/tdm45.htm
Voith, R. 1991. Transportation, Sorting and House Values. American Real Estate and Urban Economics Association Journal. 19(2): 117–37.
Weinberger, R. 2000. Commercial Property Values and Proximity to Light Rail: Calculating Benefits with a Hedonic Price Model. Paper Presented at the 79th Annual Meeting of the Transportation Research Board, Washington, D.C.
Willis, K. G., Powe, N. A. and Garrod, G. D. 2005. Estimating the Value of Improved Street Lighting: A Factor Analytical Discrete Choice Approach. Urban Studies. 42(12): 2289–2303.
Workman, S. L. and Broad, D. 1997. Measuring the Neighbourhood Benefits of Rail Transit Accessibility. Report no. 97-1371. Washington, D.C: Transportation Research Board.
Downloads
Published
Issue
Section
License
Copyright of articles that appear in Jurnal Teknologi belongs exclusively to Penerbit Universiti Teknologi Malaysia (Penerbit UTM Press). This copyright covers the rights to reproduce the article, including reprints, electronic reproductions, or any other reproductions of similar nature.
