Changes in single family housing prices due to the planning and construction of Interstate 476 in Pennsylvania

Abstract

It has been suggested in various studies that increasing accessibility to a transportation network would influence local property values and their pattern of change over time. This thesis examines the capitalization into single-family housing prices of the construction investment for Interstate 476 (I-476), which had faced public opposition for more than two decades. While the majority of previous capitalization studies have been limited to the areas adjacent to transportation facilities, this thesis analyzes the effect over time of increased accessibility on a larger part of the Philadelphia Metropolitan Statistical Area (MSA). Repeat sale single-family home price indices for zip codes covering the five counties in the greater Philadelphia area for 18 years are used. I find that the area within 7,500m of 1-476 had higher annual appreciation rates than the entire Philadelphia MSA by 0.3% - 2.6% between 1989 and 1994. The higher appreciation began after all the necessary construction approvals were obtained in 1987 and lasted two years after the opening of the last section of the highway.