California Eminent Domain Report

Light rail and rapid transit appear to be the hot ticket in California.  Most of our right-of-way acquisition and eminent domain work over the last few years has centered on such projects.  One interesting dispute that regularly pops up between the land owner's appraiser and the public agency's appraiser is whether or not there are "project benefits".  In analyzing the property's "before-condition" value, such benefits need to be excluded (whether positive or negative).  (See Code Civ. Proc., sec. 1263.330.)  But when assessing the property's "after-condition" value in the case of a partial acquisition, such project benefits should be included and can offset severance damages.  (See Code Civ. Proc., secs. 1263.410 and 1263.430.)  So in the case of rapid transit, are there any benefits from being located near transit stations?  According to a recent study, the answer is yes.

The American Public Transportation Association, the Center for Neighborhood Technology and the National Association of Realtors recently studied the beneficial impacts of transit-oriented development by analyzing home values in San Francisco, Phoenix, Boston, Chicago, and Minneapolis-St Paul between 2006 and 2011.  What they found was that homes closer to public transit performed 42 percent better (in terms of resilience of property values) than those further away.  

Price resilience was highest for properties near transit stations with the most connections and most frequent service.   Interestingly, housing type (apartment, single-family, townhouse etc.) had no impact on the study, with the results holding true across all property types.   Residents in a transit shed (within a half a mile of selected transit) also had better access to jobs and lower average transportation costs than the study area as a whole.

The full text of the report is available on the American Public Transportation Association website, and it is probably something that can be considered by appraisers when analyzing potential project benefits.