A Philadelphia construction project called The West Tower at Schuylkill Yards is right next to 30th Street Station, the city's main train station. Would investing in a project like this be lucrative, drawing a commuter crowd? Or would this location be too loud and bustling?
When you invest in real estate, you're probably doing so with an educated guess regarding what the future might hold for the area. Urban locations near train stations have for the most part been safe bets, appealing to a market of single renters who use public transportation to get around.
Before the pandemic, things were looking rosy for living near public transportation. In late 2019, the American Public Transportation Association released ridership statistics that showed property values perform 24% better when there's public transportation nearby.
The drawback is noise. A train station can have decibel levels between 80 and 96, as what the trains in Times Square in New York City register. This is similar to a jet engine. Some trains register even higher. The Occupational Safety and Health Administration (OSHA) sets exposure level for workers who pull an eight-hour shift at no more than 90 decibels. Because of possible hearing damage, some people won't rent too close to a noisy train station.
Why near train tracks?
Developers looking for new places to build in congested urban areas have been buying parcels near train stations where warehouses or tenements once stood. The new living spaces tend to be high rise rather than the low-rise structures that were once there. And they tend to be high-end structures with noise mitigation features like double-pane or even triple-pane windows.
How COVID-19 changed the appeal of public transportation
Living near a train station has traditionally been a good selling point for convenience, but because of noise levels it turns off a sizable amount of folks, too. Throw COVID-19 into the mix and you have even more people who aren't interested in living near a train station. Why? Because fewer people are riding public transportation these days due to the coronavirus.
In Washington, D.C., for example, there's been a 90% reduction in the use of the city's Metrorail. And New York City's ridership suffered even more, with a 95% reduction in ridership in July 2020. The numbers have improved since then, but ridership is still significantly lower, both from the reluctance to board crowded trains and from reduced need due to an increase in working from home.
The Millionacres bottom line
Is living near public transportation the draw it once was? In some cases, it could be. The West Tower at Schuylkill Yards project, slated to complete in October 2023, will be a desirable ultramodern building with state-of-the-art systems that include fresh air intake and filtration, co-working places, recreation areas, and light-infused spaces.
In other cases, living too close to a train station might not be as desirable. People aren't using public transportation as much as they did before COVID-19. And if they aren't, is the change temporary or permanent?
These are some of the questions investors need to ask themselves before investing in rental property near a train station.