Road construction can have a major effect on property values.
The increasing or decreasing value of property is perhaps the principal factor in determining the wealth of the middle class around the world. Most property owned by the middle class and others is in the form of housing. The effects of road construction on property values is great. Both in the positive and the negative, road construction can have a large effect on property values. For this reason road construction is often very controversial and politically charged.
Construction
The actual process of constructing a road can lead to lower property values if the construction is due to take a long time to finish. The constant noise and interruptions as well as the dust and pollution associated with living or running a business near a major construction project can scare away potential buyers to a real-estate market. At the same time, knowledge that a new thoroughfare may be on its way can also drive up values in places.
Location
Construction of roadways is a major factor in making life easier in any area, particularly areas farther away from the urban center. For this reason road construction can be a major boon for property values, both residential and commerical. At the same time, if road construction leaves areas excluded at the benefit of others it can lead to lower property values. The construction of the interstate highway system in the United States offered classic examples of both phenomenons. For instance, interstates split neighborhoods in major cities and sped up their decay. In other instances, interstates brought new vitality and life to formerly isolated communities.
Politics
The construction of new roadways has such a major effect on property values, a big concern for the average voter, that it's only natural that road building has become a hot-button political issue. At local, state and federal levels of government, the use of public money to construct roadways is a major tool of politicians seeking to get reelected. On the other hand, there are many critics of road construction projects that seem only politically motivated.
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