Growth of Property Values Near Major Transportation Corridors

Principal Investigator(s):

Adeel Lari, Former Researcher, Humphrey School of Public Affairs


  • Gary Barnes, Former U of M Researcher, Humphrey School of Public Affairs

Project summary:

The most expensive part of many transportation projects, especially roadway expansions, is acquiring the right-of-way (ROW). One approach that the Minnesota Department of Transportation (Mn/DOT) has used to decrease these costs is through a practice known as advanced acquisition. This study documents Mn/DOT's current advanced acquisition practices and investigates the appreciation rates of parcels adjacent to transportation corridors. Current practices were documented by surveying the eight Mn/DOT district offices and city officials. These surveys identified current problems with advanced acquisition practices, such as excess land acquisition, lack of guidelines on preservation tools, and the increased need for communication between cities, counties, and Mn/DOT. The corridor case studies showed that the effect of being adjacent to a transportation corridor is heterogeneous across the three corridors studied. A binomial logit model was developed and the only significant variable was the subdivided. This indicates that a parcel that has subdivided is strongly correlated with an appreciation rate above 25% per year. From these findings we developed two recommendations. First, we recommend Mn/DOT develop a set of guidelines for Mn/DOT district managers regarding how and when to use certain ROW preservation tools. Second, we recommend Mn/DOT develop a monitoring program for transportation corridors in the Twin Cities that can identify properties on the verge of subdivision or a land use change.

Project details: