The effects of introducing light rail on urban development

The aim of this master thesis is to determine the wider economic effects of the introduction of a light rail system on urban development. The paper focuses on tramline 1 in The Hague, proposed for an upgrade to light rail and was done upon the request and with the cooperation of The Hague Region Authority (Stadsgewest Haaglanden), which wants to get an insight about the added value of the project for the quality of urban life. The study is narrowed down to a specific intersection of the line route, namely Hollands Spoor-Scheveningen. This part of the route is of particular interest because it includes key economic areas of the city that could be affected by the upgrade in various aspects. As a first step of the assessment, the stakeholder groups concerned with the upgrade and the potential effect of the upgrade on them are identified. As a result, two particular stakeholders are chosen for further study: businesses and (international) organizations located in proximity to the line, and the real estate market (i.e. properties within the catchment area of the upgrade). In order to evaluate the effects of introducing light rail on these parties, a survey was conducted. Semi-structured interviews were collected with employers aiming to reveal in what way the upgrade will affect their performance and what would be the added value for them. Also, interviews with real estate agencies were done, in order to determine the impact of the project on the real estate values. The findings revealed that the main benefit of the upgrade is perceived to be an improvement of the accessibility to the area through solving/reducing current issues the employers experience with regard to accessibility, mobility and the quality of the current tram service. Also, the upgrade is considered to be beneficial for the city image, as it would increase the attractiveness of the entire area. The expert judgment of real estate agents recognized that the upgrade can affect positively the property prices, as the status of a location is a key factor in the property price formation. However, the real estate agencies could not make a precise forecast of the effect of the upgrade on the property values. One reason is that often the effect of the project is indirect and also the results could be seen in the long term, rather immediately. Moreover, the assessment that real estate agencies use when forming the asking property prices takes into account general factors regarding the environment, thus do not look at the quality of public transport. Hence, the approach taken in this respect does not give an in depth prediction. As a general conclusion of this master thesis, it can be said that the introduction of light rail will add value to the urban development on the long term through increased accessibility, which has beneficial effects on the stakeholders.