RAIL TRANSIT AND JOINT DEVELOPMENT - LAND MARKET IMPACTS IN WASHINGTON, DC AND ATLANTA

Land around urban rail transit stations can be valuable because it is so accessible. Joint development of transit stations and nearby office buildings occurs because both the public and private sectors recognize its financial rewards. This article examines how transit investments and joint development in particular affect five indicators of office market conditions: average rents; vacancy rates; absorption rates; densities; and shares of new and total office and commercial construction near the stations. Data are examined for five rail stations in the Washington, D.C. and Atlanta areas over the 1978-89 period. Average office rents near stations rose with systemwide ridership; joint development projects added more than three dollars per gross square foot to annual office rents. Office vacancy rates were lower, average building densities higher, and shares of regional growth larger in station areas with joint development projects. Where regional market conditions are favorable, rail transit appears capable of positive impacts on station area office markets. Combining transit investments with private real estate projects appears to strengthen these effects. The findings suggest that the rationale behind value recapture and other benefit-sharing programs is economically sound for conditions similar to those of the case study areas.