Suburban rail stations lift value of houses nearby, says SEPTA report

It drives up home values in the suburbs, reduces the need for parking in the rapidly growing city, and powers a $3 billion segment of the state's economy. What's not to love?

SEPTA on Thursday laid out its case to reporters for how essential mass transit is to the well-being of the Philadelphia region and the state. The pitch came as a warm-up to a fairly large ask. The public transit agency is seeking $6 billion over the next 15 years from state and local agencies for ambitious improvements.

"We're handling 53 percent more riders than we did in the '90s, without adding track or cars,"  said SEPTA general manager Jeff Knueppel during a morning news conference. "We're constantly running near capacity, and that's tough on equipment. We're worried about being able to keep supporting the economic activity in the region."

Among SEPTA's big priorities for the next decade: expanding Market-Frankford Line trains from six cars to eight; modernizing trolleys to make them compliant with the Americans with Disabilities Act and able to carry more passengers; updating Regional Rail lines to replace "231 cars dating from the Nixon era"; adding a second set of tracks north of Ardsley on the Warminster Line; and extending the Norristown High Speed Line to King of Prussia.

SEPTA's achievements — and proposals for the next phase of growth and service —  were detailed in what chairman Pasquale Deon called "the most comprehensive economic study on SEPTA ever done."

The report, titled "SEPTA Drives the Economy of Pennsylvania," was paid for by the agency and prepared by Econsult Solutions. It arrives as the agency is facing possible funding battles with Harrisburg and Washington, Knueppel said. The report, which cost $120,000, will be presented to local and state officials who can help pay the bills.

Regional Rail has a significant impact on the prices of suburban homes, according to the Econsult analysis.

"Real estate values are up," Deon said. "And much of that increase is added because of SEPTA."

Commuters, seeking to cut costs in both dollars and time, put a premium on housing within walking distance of  train stations. In some neighborhoods, the value of that premium ranged between $17,300 and $46,600 per house, according to the Econsult analysis. Homes near stations served by more lines and peak trains realized the higher premiums.

Econsult looked at 10 years of real-estate transactions involving single-family homes in the Pennsylvania counties surrounding Philadelphia. They analyzed the sales prices of comparable houses within three miles of a station and contrasted those to the sales prices of homes outside the  radius. The data-crunchers determined that rail service added $14.5 billion in residential property value in Bucks, Chester, Delaware, and Montgomery Counties.

The study also recounted how Philadelphia's Market-Frankford and Broad Street Lines have served as a catalyst for real estate investment along their routes. The city's population grew by 40,000 residents during a six-year period between 2010 and 2016, representing the reversal of a long, painful trend. Of those new Philadelphians, about 31,400 settled in tracts along the subway lines.

The Econsult report congratulated the transit agency for helping to reduce the volume of commuters who drive into the city. Despite the explosion in development and a rising population in Center City, the number of parking spaces since 2010 declined from 50,000 to 46,400. The decrease in available spaces was paired with a slight decrease in the occupancy rate, "indicating that parking demand fell even further than supply."

SEPTA's operating expenditures in 2017 were about $1.35 billion. The agency's economic impact, estimated at more than $3 billion, represents SEPTA funds that recirculate through the state economy. Econsult's Ethan Conner-Ross said it includes money spent on construction projects, train parts, and equipment bought from around the state, and the wages of 9,400 SEPTA employees. Those dollars in turn generate "spillover impacts" that support a range of non-SEPTA jobs. And tens of millions of those dollars find their way into counties in the central and western part of the state.

"It's important to remind people how valuable we are to the people in the region," Knueppel said. "And how valuable we are to the state."