Beijing residents tend to prefer central residential locations, probably because of the centralisation of employment and high transit ridership; both factors are thought to justify rail transit investments. The Beijing government has invested heavily in rail transit in recent years. Meanwhile, new small-sized apartments are also being developed farther away from downtown. Based on data on new housing projects, difference-in-difference estimates show that, on average, station proximity increases housing price and decreases dwelling size, especially in the suburbs, although suburban households may respond to rail transit plans less sensitively. Also, in areas where there are stations, both the estimated increase, after line announcements and openings, and the estimated decrease, after groundbreakings, in prices are greater for large than for small homes, although the negative groundbreaking effects particularly tend to vary considerably across lines. Government policies that encourage small-sized housing and affordable housing to be built around suburban stations also play a significant role. Beijing’s special experience offers a chance to make intercity comparisons.