Ottawa locals know: The LRT is here! In light of the recent launch of the Confederation Line, key questions remain. Our friends, clients, and collaborators are all curious about the ways in which the LRT will influence property values and other trends in real estate. We sat down with Blue Panda agents Will Beaugé, Krystal Hess, Steve Peippo, and Thomas Desjardins to discuss the ins and outs of the LRT and its future impact on local markets.
Let’s first consider the topic from the big-picture perspective. How would you summarize the broader impact of the LRT on Ottawa’s image as major city centre?
Will Beaugé: Assuming that the LRT runs as smoothly as expected, it will contribute to the modernizing of our city and encourage more efficient city transportation. In turn, it will hopefully minimize the notion of Ottawa’s “car culture” and have broader environmental impacts such as reducing our collective carbon footprint.
Krystal Hess: I believe that Ottawa is absolutely overdue for an LRT system considering the bicycle accidents, traffic jams, and density of cars in the financial district and central areas. Not to mention, our city is known to have only two seasons: winter and construction. So, good luck with cars, taxis, and busses throughout the year. Overall, the greater image of Ottawa as a major city centre will improve due to the ability for the population to flow more freely.
In any metropolis or larger city, you’ll find an underlying consideration of movement amongst citizens. For example, don’t even try to stand on the left side of escalators in London, England – there are 10 million people moving up and down to the tube and ground streets….there is a sense of order to the masses that keeps the city clean, organized, and desirable to live in.
Stephen Peippo: The LRT system will revolutionize our city’s transit infrastructure for the next 100 years, bringing us up to date as Canada’s capital.
Thomas Desjardins: This is a huge step forward in advancing Ottawa’s metropolitan city status. You look at the other great Canadian cities and an efficient rail system is central to people’s ability to enjoy and access different areas. The LRT will be instrumental in reducing congestion downtown due to bus traffic and I’m hopeful that it will make the urban core a safer and more pleasant place to be.
How do you see the LRT affecting property values in the resale market? And how will it influence future trends in the realm of new construction?
KH: Assuming that the construction noise is not disrupting businesses or causing congestion and noise, then the resale market at time of construction could increase with the hope of future benefits. On the other hand, short term pain for long term gain. It is possible that the resale market will remain stagnant at the time of implementation due to noise, congestion, and consumers not wanting to eat, shop, and live in a construction zone.
Most of my clients want to have access to public transit given the fact that a large portion of the city works in central areas with high parking prices. Our aging population is another factor to consider here. Many older people have either chosen not to drive or cannot drive any longer. In addition, a growing number of young people are foregoing vehicles for environmentally friendly approaches to living.
SP: If the service is reliable and the LRT does in fact shave off 5-15 minutes from your commute, property values will rise in areas around major LRT stations. Renting and buying in the downtown core will likely become less affordable for the average person, but hopefully the LRT will ease the commute from neighbourhoods further out. The rise in home prices around the current and future stations will plateau at some point, and by then it is more of a question of the personal value attributed to public transportation.
TD: In the resale market, we have already seen strong levels of appreciation in neighbourhoods abutting light rail development. This applies to homes and commercial spaces adjacent to phase 1 LRT development, but phase 2 is not far behind. The markets in neighbourhoods to be serviced in phase 2 have already started reacting to future expansions. As for new construction, we have seen developers react quickly to changes in zoning that come with the Transit Oriented Development strategy directed by Ottawa’s Official Plan. We will undoubtedly continue to see developers build high density, mixed use development in areas that have or are slated to experience LRT development in the future.
What about the LRT’s long-term influence on demographics and population growth in the central neighbourhoods? How do you see these changes impacting local markets?
WB: Population growth and housing availability are interdependent. If there are enough new developments located close to the Confederation Line, then higher population density in central neighbourhoods is inevitable. In this case, the result would likely be a further saturation of local markets, both in driving rental/purchase prices up and in encouraging out-of-town relocations to Ottawa.
KH: The aging population may opt not to drive or may not be able to drive. This will help seniors get around easier and safer. Also, younger generations now have the ability to move around freely in an eco-friendly manner.
SP: The central neighbourhoods located near the current phase of the LRT line are already fairly well-served by public transportation, but the City of Ottawa intends on updating zonings to maximize dwellings on certain plots of land in these neighbourhoods. I am predicting that we will see the greatest impact during the second and third phases of LRT expansion into the suburbs. These neighbourhoods will become much more popular with households that prefer to have no car and those that have only one car.
TD: We are certainly going to continue to see increased density alongside rail infrastructure in the city. I wouldn’t say that there is likely to be a significant change in the demographic makeup of these areas, but typically higher density will result in fewer families in spaces that were previously more suburban. Also, given the associated higher property values, we may start to see development around light rail infrastructure push lower-income individuals out of certain areas, though the city seems ready to address this eventuality by including zoning provisions requiring developers to dedicate square footage to “affordable” housing. It’s a bit too early to tell if their efforts will be successful. Success on this front is especially important since individuals in lower tax brackets are the most reliant on the transit system.
Stay tuned for part 2, coming soon.