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CHAPTER 12. LAND PRICES AND PROPERTY VALUES OVERVIEW Scholars and practitioners have long recognized that highway projects influence land and property values. Importantly, the influence of a highway project on land or property values is based on many of the other impacts that are discussed earlier in this guidebook. Highways can influence the accessibility of various parcels and may produce disamenities such as noise, air quality, and visual impacts. Construction disruption can also influence property prices near a transportation facility. The net effect of these and all other impacts can be reflected in changes in the value of the property. Thus changes in property value are not distinct from the other impacts that have been discussed in this guidebook. Instead, property values reflect the broad range of impacts from highway projects, and so provide another window into understanding both the effects of transportation system change and the implications for environmental justice. Property prices reflect the full range of positive and negative impacts of transportation system changes. More generally, property prices reflect all location-specific characteristics of a parcel, including characteristics that are not related to transportation, such as desirable views, proximity to good schools, crime rates in the area, and noxious nearby land uses, such as toxic waste dumps. The fact that property prices reflect all impacts, both positive and negative, has both advantages and disadvantages. On the plus side, once the impact of a highway project on property prices has been determined, one has a good summary measure of the net impact of all of the possible effects of the highway. In some cases, rather than assessing each of the various effects discussed in this guidebook individually, an environmental justice analysis might focus on the total impact of the highway by examining impacts on property values. On the negative side, like many summary measures, a property value analysis can obscure information on specific effects of the highway. If the property value analysis does not distinguish between the various effects of the highway, one might be unable to comment on how the influence of a highway can be disaggregated into impacts based on accessibility, noise, air quality, and other effects of the highway.1 STATE OF THE PRACTICE The link between property values and transportation has long been recognized. Models of urban development often incorporate the influence of transportation on land values. See, for example, descriptions of classic models of urban form in Alonso (1964; 1972) and Fujita (1989). Empirical studies of highways and property values date to the early years of the Interstate Highway System (Adkins 1959; Mohring 1961). 1 This is not necessarily the case. A property value analysis can be designed to illuminate the independent effects of, for example, changes in accessibility, noise, air quality, and other impacts of the highway. In that case, the result of a property value analysis is not a summary measure but, rather, an analysis of the influence of several types of impacts on property values. 275