When Jane Brumbaugh bought her condominium in July 2006, the possibility of light-rail transit definitely factored into her decision.
Brumbaugh, a resident physician at the University, owns a condo in The Metro Lofts, located on University Avenue near Highway 280 .
“I avoid using my car in any way possible,” she said. “The location is really convenient.”
When it’s completed in 2014, the Central Corridor is slated to stop right in front of her building. Developers and experts agree: If the line goes in as planned, development will increase in the area and property values will go up.
Brumbaugh said she’ll either use the line to commute to hospitals in Minneapolis and St. Paul or take advantage of a higher resale value of her condo once the line is completed.
The Metro Lofts, a $15 million, 67-unit condominium complex, is one of several similar buildings created by Wellington Management Inc. near present and future light-rail lines.
Wellington owns about $375 million in commercial properties in the Twin Cities.
It owns Emerald Gardens, a $52 million condominium development near the Central Corridor’s path in St. Paul , and condos near the Hiawatha Line .
Jason Cao, who specializes in land use and transportation at the Humphrey Institute of Public Affairs, said a light-rail line would almost certainly drive up property values along University Avenue.
As gas prices go up, so does demand for housing along transitways, especially along light rail lines because of “rail bias,” he said.
“Light rail is sexy,” Cao said. “People don’t take the bus. They will take the light rail.”
Numerous factors, including population trends and the economy, could contribute to the demand too.
However, higher property values and expensive housing could cause problems for the people who will likely need the light rail the most.
Developers want revenue, and condos are more profitable than affordable housing.
Low-income residents already live near University Avenue because of the bus route, and higher housing prices could push them out of the area, Cao said.
At Emerald Gardens, condo prices range from $244,900 to $385,900. A two-bedroom condo with two bathrooms runs about $240,000 at Metro Lofts.
David Abele , a realtor with Edina Realty, sells property at multiple locations in the Twin Cities, including several that belong to Wellington. He has 20 years of experience in Twin Cities real estate .
Although property would be pricier right next to the Central Corridor, the values would “tier down” as you step back from the line, he said. There are cheaper duplexes and houses a few blocks away.
Abele said some people have anticipated property values will go up along the line.
“Prices are as low as they’re going to get,” Abele said. “It’s a great opportunity.”
Tanya Bell, director of acquisitions and development for Wellington Management Inc., said the company created an LRT living Web site to market living and working near transit.
She said she thinks the condos will eventually outperform the rest of the market. However, real estate values along University Avenue might have escalated prematurely.
“The market isn’t there yet to validate those land prices,” Bell said. “The train isn’t there, and the funding isn’t there.”
