Urban Economic Perspectives on Residential Real Estate: Does Access Matter?
Smith, Cameron J.
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This thesis explores the transportation-land use connection through an investigation of accessibility and residential property values. Accessibility, broadly defined as the ability for locations to interact (Hansen, 1959) is considered a key principle of urban economic theory. This project builds upon the recommendations and conclusions of the literature calling for simultaneous consideration of both the quantitative (measured) and qualitative (perceived) impacts of accessibility on residential property values. This thesis utilizes a two stage research methodology in order to investigate the influence of access to amenities on residential property values. First, accessibility is quantified via an accessibility calculation for sample properties from three study areas within the Greater Toronto Area. This calculated access value is then correlated to real property sales data in order to explore the association between access and value. Second, a survey of real estate professionals explores the influence of perception and behavioural characteristics of accessibility and amenities in the residential location decision making process. The quantitative results are statistically significant however, the association between value and access is weak and varying in direction. The qualitative results indicate consistently that homebuyers are willing to pay for access to the amenities that they value. The average value of this access premium is determined to be approximately $10,000 or 3.5% of the average price for a single-detached home in the GTA. Given the methodological challenges experienced in the quantitative measurement of access, the overall results suggest that access does in fact matter. This research contributes to the literature by considering the impact of perception and behavioural characteristics on accessibility. Further this project serves to inform the debate around transportation-land use interactions.