Few things can guarantee a premium price for new housing like transit access. Demand so far outstrips supply in the United States, that the relative handful of walkable, transit-rich neighborhoods often become the most expensive places to live in their respective cities. A study by the National Association of Realtors and the American Public Transit Association found as much, with homes in transit-rich regions commanding double-digit premiums.
But as transit options multiply, how are services such as ridehailing and dockless biking changing the equation?
A new analysis tracking the relationship between transit access and apartment rent seeks to put some numbers behind the dramatic shifts in urban mobility. The new study by RCLCO, a real estate consultancy, and TransitScreen, a company that provides real-time arrival and departure info, analyzed 40,000 apartment developments nationwide, which contained roughly 9 million units, to determine how access impacts costs in different cities and neighborhoods.
The results underline the value we place on transportation access and the ways new mobility options are changing that calculus.
The study crunched data to arrive at MobilityScores, rankings on a 100-point scale based on the availability of services, and the frequency of access, for a specific location. For instance, being near a streetcar line that came every 10 minutes earned more points than a bus that only stopped during peak hours, and a stop on the immediate corner outside a building earned more points than one that’s 10 blocks away. Adding a new bikeshare dock to an area without transit also added more points than a neighborhood already flush with mobility options.
Scoring was also mode agnostic, meaning ridehailing services like Uber and Lyft, or bikehare, earned as many points as a bus line. That may seem unfair, or skewed, since increasing Uber and Lyft pickups can easily be boosted based on user demand on the app, and dockless bike (and scooter) operators can just dump tons of vehicles within a popular service area. This reality just underlines the challenges that traditional transit faces as riders get accustomed to the ease and flexibility of new transit tech companies.
As one would expect, areas with great transit access demand a significant premium, given they’re usually centrally located near jobs and downtown commercial districts. The analysis found that in communities built since 2010, those with an Excellent Mobility ratings (80-plus points) charged 59 percent higher rent than average, while those with a Good Mobility ranking (60-90 points) cost 22 percent more than the market average. Overall, a 10 percent rise in an area’s MobilityScore resulted in a 12-cent increase in rent per square foot.
That all may come as no surprise. But what makes the study different is how it took a more contemporary look at what mobility means. The analysis broke out the impact of different forms of transportation—transit, carshare, bikeshare, and ridehailing—and quantified how access to each impacted rent.
Improvements in access to bikesharing and ridehailing made a more significant difference nationally than access to traditional transit or carshare services. The breakdown found that a 10 percent increase in access ridehailing or bikesharing increased rents by 10 and 9 cents per square foot, respectively. A similar boost in access to carshare only added 8 cents per square foot, while traditional transit lagged behind with an increase of 3 cents per square foot.
Could this be explained by the fact that newer, higher-end apartment developments may attract a demographic of riders more likely to use Uber or Lyft? That could certainly skew some of the data. But if this is the case, it also suggests that more nimble ridehailing companies, by quickly reacting to changing housing patterns, can grab market share before transit lines can adapt, and that there’s real value for apartment developers to promote new mobility options by adding amenities such as a ridehailing waiting room, on-premise bikeshare docks, or dedicated carshare spots.
The report also found that while transit access is a sought-after amenity, the market is far from meeting demand. Only 5.6 percent of the apartment communities studied earned an Excellent score, with an additional 8.2 percent receiving a Good score. While its encouraging that newer apartments tended to have higher scores, clearly there’s room for more transit-oriented development.