The Relationship Between Property Value And Urban Rapid Rail Transit: Based On Improved Hedonic Price Model(s)

Urban Rapid Rail Transit (URRT) is a safe, comfortable, convenient, fast, effective, environment-friendly urban infrastructure system that provides mass public transportation services with subsidies from the Government. URRT plays an active and key role to reduce problems such as shortage of land resources, traffic congestions and air pollution that many cities are facing. Ironically, while there are problems such as shortage of fund and operation losses in many cities' URRT development, the benefits of increase of property around stations due to URRT development are only enjoyed by property owners and users without any contribution to sustainable development of URRT. It is imperative to analyze the quantified effects of URRT development on the adjacent property and establish a complementary relationship between URRT development and the use of the adjacent land.Firstly, the characteristics of URRT and the usage of affected land are analyzed based on the results of relevant analyses from overseas and China. The factors influencing the price of real estate and the mechanism on how URRT boosts the value of properties along the route of URRT development are highlighted. By employing case studies from overseas and China, the effects on the price increase of the adjacent properties due to URRT development and the relationship between the revenue from URRT operation and land usage mode and efficiency are outlined. Secondly, the econometrics models are analyzed to find the effect of URRT on the price of properties adjacent to the route. Hedonic Price Model (HPM) is chosen as the main methodology of the thesis after the comparison of the existing Travel Cost Model, HPM, and Linear Expenditure System Hedonic Model. HPM is modified to rectify the issues inside HPM. Expenditure System Hedonic Price Model (ESHPM) and Variable Coefficients Expensive System Hedonic Price Mode (VCHPM) are thereafter proposed.By employing the proposed Models together with HPM, the improving effect of URRT on the price of properties adjacent to the route is analyzed – taking residential buildings, commercial buildings and office buildings along the route of Shenzhen Metro Line (Phase 1) as an example. It is found that HPM and ESHPM are able to work well for the above three types of properties. However, HPM may overestimate the results while ESHPM's results are relatively accurate. VCHPM works well in residential properties, whereas it has problems in cases related to commercial and office buildings. It is found that the prices of residential buildings, commercial buildings and office buildings within the region of 500 m around stations increase 16.95%, 14.7% and 10.11% respectively. Within the region of 300 m around stations, the increment of prices is 30.62%, 26.47% and 20.43%, respectively. The overall incremented value of properties due to the development of Shenzhen Metro Phase 1 is RMB 33.536 billion which is as high as 2.916 times of overall investment for Shenzhen Metro Phase 1. Finally, by using the results from the previous studies together with the advanced experiences from Hong Kong, Japan and Singapore, the strategy for integrated development of URRT with land use is proposed which is applicable in China.