Impact on the value of rental and purchase values for residential and commercial properties, related to distance from the axis of the tram system in Cuenca, Ecuador

Abstract

The implementation of transport projects improves access and urban mobility, influencing localization decisions of people and companies. Likewise, it generates impacts on its environment, which can be positive or negative. Among the possible impacts, fluctuations in the land values stand out. The aim of this paper is to report the process and the results of an exploratory study carried out to collect data on rental and purchase offered values for residential and commercial properties, related to distance from the axis of the tram system in Cuenca, Ecuador. The data was collected in November 2017 using kobo toolbox and telephone calls, and analyzed through the hedonic pricing model. The results showed that rental prices for residential properties increase as their location moves away from the main axis of the system (still under construction at the time of data collection), and that, on the contrary, leases for commercial properties increase with closer proximity to the axis. With respect to the sale price of residential or commercial properties related to this distance, there was no evidence of changes. Civil works can cause these results, however, they are an interesting first approximation to the subject that should be contrasted with historical and future studies (when the tram is operating).