Characterizing the Relationships between Real Estate Values and Communizing Time: a Case Study in Te

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Urban Planning and Design Research, Volume 4, 2016 www.seipub.org/updr doi: 10.14355/updr.2016.04.001

Characterizing the Relationships between Real Estate Values and Communizing Time: a Case Study in Texas Suburban Cities Fengxiang Qiao 1, Ling Liu 1, Wen Long 2, Qing Li *1, Lei Yu 1 1 Innovative Transportation Research Institute, Texas Southern University, 3100 Cleburne Street, Houston, TX 77004, USA 2 University of Houston, 4800 Calhoun Road, Houston, TX 77004, USA * Corresponding author, liq@tsu.edu Abstract The transportation cost is an essential factor that impacts land and house values in urban areas. In a classical monocentric city model, residents who work in the Central Business District (CBD) are facing a trade‐off between rent and commuting distance to the CBD. In most metropolitan areas, the real estates that are located in or close to a CBD are able to command a higher rent in equilibrium than those at the suburban areas. Nevertheless, longer distance may not always imply higher transpiration costs for commuting, since alternative commuting modes could shorten the physical distance by shortening commuting time or improving fuel consumption efficiency, such as riding on freeway instead of on local roads, or riding on public transportation rather than individual vehicle. This paper intends to explore how the average commuting time affects the housing price in four suburban cities in Texas, including Houston, Dallas‐Ft Worth, San Antonio, and Austin, using real data from an online real estate database. The statistical relationships between the Median List Price (MLP) and the Average Commuting Time (ACT), after controlling family characteristics such as Median Household Income (MHI), are analysed by linear regression. In addition, the social cost of urban sprawl when residents make a use of lower housing cost in suburban cities and spend more time on commuting to work was discussed. Results show that an increase in one additional minute on average commuting time raises 1.9 dollars less housing price per square foot (p‐value: 0.038). The incurred costs in the form of significant vehicle emissions and highway congestion have important policy implications. The analytical framework and results in this paper could be references for research and practices in land use, transportation economics, transportation planning, transportation impact analyses, and real estate markets. Keywords Land Use, Transportation Economics, Transportation Planning, Real Estate Markets, Emission, Highway Congestion

Introduction A number of developments in the quantitative modelling of land use and land values demonstrate that urban spatial structure may affect housing prices (Todd, 2009). There are many common regularities of urban spatial structure in a majority of monocentric cities. One of the most notable regularities is that the price of residential housing generally decreases with the increase in the distance to the Central Business District (CBD). The farther from the downtown that a house located, the lower price that the house may be valued. TABLE 1 presents the Median List Price (MLP) of houses in four suburban cities on the southwest of the Houston metropolitan area and their distances from the city centers to the downtown of Houston, connecting by the Highway US 59. It is clear from TABLE 1 that the housing price declines as the distance to downtown increases. The house prices may decline by more 8 % per 1.6 km (1 mile) to a CBD, stated by McMillen (1964). Munneke (1969) pointed out that the land prices at the rate that is nonlinearly correlated to the distance to an urban center. TABLE 1 DISTANCE TO CBD AND HOUSING PRICE IN FOUR CITIES OF HOUSTON METROPOLITAN AREA

City Name

MLP (Dollars)

Distance to Houston Downtown (km)

Missouri City

205,000

33.49

Stafford

219,900

34.45

Richmond

150,000

54.10

Rosenberg

125,000

58.12

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