Limited impact of roadway construction and traffic congestion on nearby housing prices
The research examines the impact of roadway construction and traffic congestion on nearby housing prices, finding that homes near major roads tend to sell for less. While congestion-reducing improvements lead to small average increases in home prices, the negative effects on housing values are primarily due to the proximity to major roads, regardless of traffic levels.
College of Health researcher(s)
Highlights
- Homes near roadways face price penalty, regardless of traffic on the roadway.
- Roadway construction increases home prices only slightly.
- Co-located amenities likely mute effect of traffic on home prices.
Abstract
Constructing new roads and upgrading existing roads are two common approaches to address congestion caused by increasing traffic volumes. But they can also impact local communities if roads are built through neighborhoods or existing roads and intersections are widened and placed closer to nearby homes. In this paper, we estimate how local communities are impacted by these changes using data on housing prices near roads and roadway construction projects. We find that homes near major roads sell for less than homes further away, but that congestion-reducing road improvements only lead to small average increases in nearby home prices. Our results suggest that major roads in close proximity negatively impact housing prices by affecting neighborhood aesthetics, and this relationship is not contingent upon the level of traffic on the roads. Our results can help policymakers consider the external costs borne by local communities when conducting cost–benefit analyses of roadway expansions or improvements.