Modeling the effects of integrated rail and property development on the design of rail line services in a linear monocentric city

This paper proposes a new model for investigating the effects of integrated rail and property development on the design of rail line services in a linear monocentric city, in which the property development rights at railway station areas are conferred to a private rail operator. The proposed model allows an explicit consideration of the interaction between two types of agents in the economy: (1) a private rail operator who seeks to optimize rail service variables–rail line length, number and spacing of stations, headway and fare–to maximize its own net profit, which is the sum of revenues from passenger fare‐box and property development; and (2) households who choose the residential locations that maximize their own utilities subject to a budget constraint. The solution properties of the proposed model are analyzed, and a heuristic solution algorithm is presented. An illustrative example is used to show the application of the proposed model. The findings show that integrated rail and property development can change a city’s land‐use pattern and housing market (in terms of housing density, space, and price), and its economic viability is closely related to household income level and residential density of the city.