Category:  Thoughts

High-Speed Rail Linked to Real Estate Boom

As a follow-up from my latest piece discussing the economical benefits of a high-speed rail system, I decided to do more research on other effects that high-speed rail might have on the U.S. A recent study published in the UCLA Newsroom, in conjunction with China’s Tsinghua University, explains how high-speed rail can lead to a real estate market boom.

The Surface Transportation Board recently voted in favor of allowing the California High-Speed Rail Authority to begin construction on their initial 65-mile project. The Miami Herald recently published an article detailing the construction and planning of the project.

According to the UCLA Newsroom study, second tier cities grow as a result of the development of high-speed rail.  The study explains how high-speed rail drastically reduces the amount of time people spend traveling, which gives them the option of finding more affordable living in smaller cities. This trend would transform less populated areas around large cities into suburban communities.  For example, less populated areas, like Bakersfield, Ca., could become suburban communities for people who work in Los Angeles or Fresno, but don’t want to live there.

Skeptics can study the effects of high-speed rail in the real estate market by evaluating China.  An article from Northwestern University states, “In 2007, China built new 185-miles-per-hour bullet train lines to connect Beijing, Shanghai and Guangzhou to nearby cities, some of the construction coinciding with the 2008 Beijing Olympic Games. Based on the real estate appreciation recorded between 2006 and 2010, the researchers estimated that when "market potential" (defined as access to goods, services and labor) is boosted 10 percent by a new bullet train line, housing prices rise 4.5 percent.”

For more on this story please read the Miami Herald, UCLA Newsroom or the Medill Reports from Northwestern University.


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