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The Effect of CTA and Metra Stations on Residential Property Values
Client: Regional Transportation Authority
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The RTA retained Gruen Gruen + Associates (GG+A) to assess the effect of Chicago Transit Authority (CTA) and Metra stations on residential property values in the Chicago metropolitan region. The assessment was primarily based on the use of econometric technique of regression analysis known as "hedonic price" modeling. The study also included a comprehensive literature review both on the urban economic theory on the determinants of residential property values and empirical studies that used hedonic price modeling to estimate the effect of transit stations on property values. The hedonic modeling approach was used to isolate the effects of individual factors influencing single-family residential property values. The use of hedonic price mod eling permitted the estimation of the effect of transit station proximity on residential property values as a function of distance. This statistical approach was augmented with interviews both to facilitate interpretations of statistical results and to suggest the effect of transit stations on multi-family uses not evaluated empirically.

The findings of this study show that the regional benefits or comparative advantages transit provides to neighborhoods by improving accessibility, lessening congestion and reducing transportation costs make residential locations served by transit more valuable than comparable locations without transit service. With respect to micro or neighborhood proximity effects, whether located in lower- or higher-income neighborhoods, proximity to CTA and Metra stations positively affects the value of single-family houses. All other factors equal, home prices decline as distance from a station increases.

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