With the City of Phoenix poised to to extend the light rail down Central Avenue into South Phoenix, debate is raging about whether it is worth the worth the hefty price tag. Affected residents are asking what is the real impact of Light Rail on commercial and residential property values?
Light Rail attracted billions in investments
Research shows land values have increased along the Light Rail line and attracted new development. Transit officials say that by as early as 2008, developers had invested nearly $ 6 billion on public and private projects near the light rail line. But for existing businesses, caught in the turmoil of a three-year construction project, the Light Rail had a definite dark side. Lane closures, blocked access to their property and the general commotion caused economic damage from which many businesses never recovered.
Dark side of Light Rail
Valley Metro Light Rail stretches from 19th Avenue and Dunlap, in central Phoenix, to downtown Mesa. It spans 24 miles and 28 stations, including stops at Sky Harbor International Airport and Tempe’s Mill Avenue. The three years of construction most negatively impacted businesses along 19th avenue near Dunlap, Glendale and Bethany Home Rd. Grant funds did help businesses pay for signage and marketing during the mess. And some business owners say that while customers are not coming directly from riding the Light Rail, being along the route has given them a visibility that attracts customers.
Light Rail lit up commercial and residential property values
Ten years have passed since the Light Rail first left the station. In that time, the Valley has weathered the recession and the chaos of construction—and gathered data. A comparison of land values around Metro Light Rail Stations shows that since 2014, both residential and commercial land values within a half mile of Light Rail stations rose faster than other property.
Where property values increased the most
The study also reveals that, by far, downtown Phoenix and Tempe came out the big winners on the property values front. Commercial and residential property values increased the most in Tempe. In fact, the biggest jump came with the mere announcement of Light Rail construction. Sales volume near the Tempe stations tripled in the three years immediately after Metro released where it would locate the stations.
Out with old and in with the new? South Phoenix says No
It stands to reason that expanding the Light Rail further down Central Avenue into South Phoenix would have a similar impact on real estate values and development. The proposal calls for building Light Rail tracks from Jefferson to Baseline road. The idea makes many South Phoenix residents uneasy. Infill construction along the Light Rail in downtown Phoenix has transformed the landscape. Luxury apartments in high-rise towers, expansion of all three state universities, new restaurants and all the ancillary businesses that come from people moving into the area, have changed the face and cost of living in those areas. The worry is that similar development and higher land values, while good for investors, developers and the City of Phoenix, would not necessarily help out the businesses and residents there now. Rather, they fear it would serve to push out them out, most of whom are black and Latino.
Taking a closer look
Such concerns have motivated the City to take a closer look at the proposed Light Rail expansion. Planners are going ahead with engineering studies, but now must also look beyond the impact on new development and create a plan that does not hurt the business already there along the proposed Light Rail line.
At Landmark Title Agency, we work with both residential and commercial brokers, along with their clients to provide escrow and title services. If you have any questions or need assistance, please contact our office at (602) 768-2800 or visit us at our website.