The Quantitative Impact of Transportation on Real Estate
Commissioner Bovo was very open with his concerns regarding transportation development and the means by which it will happen.
“Ultimately, our success developing, building and operating an integrated system of mass transit will depend on identifying viable funding sources,” he said. “To that end, I will encourage county administrators to explore leveraging existing half-cent sales-tax dollars to develop, and break ground on, at least one major signature mass-transit capital project by the end of 2016.”
Whether Bovo commands enough political gravity to influence such changes remains to be seen, but a 2013 report on the relationship between residential real estate and fixed-rail transit from the National Association of Realtors may provide the commissioner with enough ammunition to fill out his legislative arsenal.
The report examined data from a number of major metros to determine “how well residential properties within one-half mile of a fixed-rail transit station held their value between 2006 and 2011.” Across all studied areas, results were heavily in favor of building near transit hubs, as adjacent homes “outperformed the regions as a whole by 41.6 percent,” researchers found, adding that such properties also proved more resilient to the impacts of the recession.
Jed Smith, a senior economist for NAR, noted that economic benefits were only one piece of a larger puzzle. He said that erecting residential properties near transit stations also provided high social value.
“Transit is important for building communities,” he said, specifically refrencing improvements in mobility, jobs and walkability. “High frequency public transportation also reduces congestion, fosters economic development and mitigates local air pollution.”
Significant Roadblocks to Miami Transit
Developers in Miami have certainly expressed their interest in helping the city decongest and build a stronger, more maneuverable city, but as Bovo explained, funding remains a major roadblock.
According to a report from the Herald, Miami’s transit system is operating at a significant loss, making improvements fundamentally difficult and at odds with tax payer interests.
The article reads:
The good news: Riders of Miami-Dade Country’s transit system pay about $1 million in fares every 72 hours. The bad news: Miami-Dade’s transit system costs about $1.5 million a day to operate.
Between operational costs and incoming fares, that’s a daily margin of roughly $315,000.
Recouping those losses will be a difficult challenge for Miami in coming years, but as John Keynes, father of Keynesian economics, might say: you have to spend money to make money. And the new and forthcoming additions to Miami’s rail network should provide additional streams of revenue and community investment that could shore up losses. In the long run, the city will need a more concrete plan and more sustainable funding sources.