Estimation of the anticipation effects of the metro project on real estate dynamics in Bogotá, Colombia

Abstract

Studies of the impacts of rail-based mass transit systems on land values and real estate prices are scarce in the Colombian context. Most studies have focused on estimating the impacts of bus rapid transit systems (BRT), mainly in Bogotá. There is an emerging literature on rail-based systems impacts on urban development and land values in Medellín, Colombia, while there is also an emerging interest regarding the effects of the announcements of the two metro projects of Bogotá in the city’s urban spatial structure. This paper develops a quasi-experimental research design looking at the anticipatory effects of the two lines of the Bogota Metro program on real estate market dynamics between 2007 and 2023. We used databases generated by the private sector with new housing developments including housing unit attributes and we estimated spatial variables and urban attributes associated with the location of each real estate development project. Through hedonic price models with control variables that incorporate attributes at different scales, our study estimates the effects of the Bogota Metro Line 1 project (in construction since 2021) on prices per square meter of real estate development projects over time. Results of the analysis suggest that the regulations implemented by the city, establishing an 800-meter impact area along Line 1, have had positive effects on real estate market prices after 2016, while results found no changes on real estate development dynamics in terms of prices per square meter due to the announcements of the planned second line of the metro project. We also included statistical analysis using isochrones based on walking distances to future metro stations. We found that the positive effects are taking place in all isochrones for the first line, while there are differences in the case of the second line of the metro project. Based on these findings, we provide guidelines for future research including public policy recommendations for the local and national government regarding value capture opportunities associated with the announcement of large-scale rail based urban transport projects.