4 Literature Review of Bus Rapid Transit's <br />Impact on the Real Estate Market <br />The purpose of this literature review is to summarize research to date on the impact of transit <br />investments, particularly Bus Rapid Transit (BRT), on real estate markets, including impacts on <br />residential rents, commercial rents, and property values. The project team will use this <br />information to evaluate how future transit service could affect both the financial feasibility of <br />new development and the risk of displacement for existing residents. <br />This section is organized as follows: <br />■ Theory and methods <br />■ Findings from research on LTD's BRT network <br />■ Findings from the national literature with a specific focus on the effects of BRT <br />Theory <br />The theories of urban economics are clear that transit service can increase property values, <br />because landowners will pay more for land that is accessible to more places. For commercial <br />businesses, the economic benefits of being close to other businesses will cause many businesses <br />to desire central locations. Those demands will cause developers of those locations to bid up the <br />prices of that land. Reducing the cost of accessing central locations through transit or other <br />transportation services makes it easier for businesses to cluster and further drives up land rents. <br />Retail businesses benefit from this clustering especially. <br />For households, transit can provide an additional transportation option, and can reduce travel <br />time and decrease the need for a car (in some cases). Some households will be attracted to <br />dense, mixed-use areas with a concentration of commercial businesses and large public <br />investments in streetscapes and open space. <br />The literature also outlines several drawbacks associated with transit service. Providing new <br />transit where there is little demand may have a modest or even negative effect on property in <br />certain circumstances. Noise and construction costs and impacts are the most significant <br />negative effects of transit investments. However, unlike heavy rail, BRT has little noise and <br />vibration, thus the offsetting impacts to property values are smaller. 17 <br />17 Bartholomew, Keith and Reid Ewing. 2011. "Hedonic Price Effects of Pedestrian- and Transit -Oriented <br />Development." Journal of Planning Literature: 26(18). <br />ECONorthwest 37 <br />210 <br />