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

TLDR

Light rail transit (LRT) is increasingly accompanied by overlay zoning that specifies density and development type to promote transit‑friendly landscapes. The study estimates how LRT accessibility and overlay zoning affect the capitalisation of single‑family houses and condos across different neighbourhood types using hedonic models. Neighbourhoods are classified by land‑use mix, and the analysis compares park‑and‑ride and walk‑and‑ride stations while incorporating overlay zoning to assess their joint impact on housing values. Premiums differ by housing and neighbourhood type: amenity‑dominated mixed‑use (WAR) communities yield 6 % premiums for single‑family houses and over 20 % for condos, with overlay zoning adding an extra 37 % to condo values, while residential (PAR) communities show no benefit for single‑family houses and a discount for condos.

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.