Valuing High Speed Transportation:
Time in money. The question is, in today’s high paced and high-tech world we are able communicate and send information instantly. However, no video conference call or Youtube video will replace the value of being there in person.
The United States moves people at the same speed that we did in the 1960s. However, what will happen when someone can commute 150 miles to work, or have dinner friends who live 75 miles away. This is the future we are looking at where traveling becomes easier and faster.
The truth is, the United States is about to go through a change like the building of suburbs in the 1950s. No longer will Chicago, Milwaukee, Madison, and Minneapolis be totally separate cities. Instead, they will merge into one mega region.
The question is what is the value if creating these new mega regions? In this new mega region where will people live, where will they play, and where and how will they work. Most importantly, where will the most valuable real estate be in the future. That is exactly what we are working on today!
Fast transportation builds big cities.
It turns out that the real value of high-speed transportation is not in the passenger tickets, but in the real estate around the station. This is why - from Hong Kong to New York - cities are seeing a renewed interest in transit stations as not only a solution to housing, but also an increase in their tax base. More importantly, centralized transportation hubs lead to walk-able and sustainable cities.
THE EVOLUTION OF THE CITY
In the latter half of 20th century, the automobile ruled urban design. This resulted in residential areas being separated from retail and office spaces, which required residents to drive everywhere. Increased vehicle traffic not only polluted the environment, but lead to congestion and wasted time.
With new transit-oriented designs the automobile is just one of many options; retail and office spaces can now be a short walk or train ride from your home. The result is not only more sustainable, but also more profitable for real estate developers and cheaper for the city.
TRANSPORTATION INDUCED VALUE
As seen in Japan and Germany, building high speed transportation drives increased land values (such as 67% increase seen in Japan).
When a transit project is announced, speculation occurs. Then once the transit system begins operations there is a long-term increase in real estate values
This increased value is called “Transportation Induced Value”