The economic effects of elevated and depressed freeways on adjacent property owners

Abstract

An economic assessment of a community is detected by indicators that signal a change in the functioning of an economy. These indicators can either mean a good or a bad year for consumers and merchants. There are many factors that affect how businesses operate, with location and accessibility rating as two of the main factors. Past research focused on the impacts that the freeway had on the adjacent property values. Little research examined the effect that geometric design could play. The elevated, depressed and at-grade designs were the focus of this research. Interstate Highway 27, in the city of Lubbock Texas, was the site chosen for this study. The yearly commercial, residential and industrial property values were collected and plotted to observe the trends over the study period. The values fluctuated between periods of increasing and decreasing for all three design types. Next, the before and after construction values were converted to 1982-84 dollars using the Consumer Price Index (CPI). Once the before and after construction values were converted, they were compared using the paired t-test. The paired t-test indicated that the values for residential properties adjacent to the three designs were statistically different with one exception. There was insufficient evidence to determine if the construction values for elevated residential structures were different. There was also insufficient evidence to determine if the values (land, structure, and total) for commercial properties adjacent to the at-grade and depressed sections were statistically different between the before and after periods. The commercial values (land, structure, and total property) adjacent to the elevated section were statistically different. There was also insufficient evidence to determine if the before and after values for industrial land, structure, and total property adjacent to the elevated section were different. Finally, this study examined the percent change in property values. The elevated and depressed designs caused all the commercial and residential property values to decrease. The at-grade design also caused the residential property values to decrease. However, the at-grade design caused an increased in the commercial values of structures and total property while causing the land values to decrease.