Location, Regional Accessibility and Price Effects: Evidence from Twin Cities Home Sales
Regional location factors, with measures of regional accessibility foremost among them, exert a strong influence on urban property markets. While accessibility represents an important regional-scale factor, more local influences such as proximity to urban highway links may also positively or negatively influence the desirability of a location. In this paper, we use a cross-section of home sales in Hennepin County, Minnesota from the years 2001 through 2004, along with a set of disaggregate regional accessibility measures, to estimate the value of access to employment and resident workers. We also estimate the (dis)amenity effects of locations near major freeway links that have recently undergone, or were scheduled to undergo (as of the time period covered by the home sales), major construction to add capacity. The richness of the home sales data set allows us to control for a number of structural attributes, as well as some site characteristics, while additional neighborhood characteristics (such as income levels and local educational quality) are added from supplemental data sources. Empirical results indicate that households highly value employment access, while access to other resident workers (i.e. competition for jobs) is considered a disamenity. Proximity to local highway access points is positively associated with sale price, while proximity to the highway link itself is negatively associated with price. The paper concludes with some implications for research and practice of the concept and measurement of the relationship between location and land value.
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