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NYC 9/11 Public Portal Document

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3 In a generic way, the research effort documented in this Handbook contributes to a technical basis for value capture financing by advancing our knowledge in several areas:

o It makes possible linking financing of transit more closely to the benefits transit produces. This will improve the efficiency of the urban economy, reduce the need for more arbitrary forms of taxation, provide secure funding to maintain existing systems in a state of good repair, and help improve or expand systems where sufficient benefits can be captured. t o It makes possible measuring not simply how the market for land responds to transit access, but also how it responds to different qualities of access, including: service frequency, speed, reliability, equipment condition, and the like. This provides an objective yardstick of the importance of various performance characteristics and may improve a public transit system’s ability to deploy funds cost-effectively.

o To the extent that land value taxation is implemented, it makes possible enhancing transit-supporting locations for new real estate development. Higher taxes on land in transit-accessible locations will encourage owners to use land more intensively, thereby increasing transit patronage.

Objectives of Land Value/Transit Access Models

Transportation investments play an important role in determining the efficiency and productivity of urban areas. A large part of the benefits created by’ transport improvements in existing transit systems and in access to transit stations are enjoyed by users of these systems in the form of travel time and travel cost savings, and resultant increases in personal welfare; In economics, such welfare related increases are known as the "consumer surplus" measure. Additional benefits of transport improvements accrue to owners of real estate which is located in close proximity to improved transit facilities. These benefits take the form of increased rents and sales prices. Land and real estate located at some distance from the improvements can be adversely affected because it is at a relative disadvantage. The net effect is the sum of increases in vaTue in positively affected areas less the sum 6f I decreases in value in negatively affected areas. This net effect I can be positive or negative depending on the type of transportation improvement. '• To give a historically valid example, let us consider th6 effect of urban-suburban road building in the nation's cities ‘in the post World War II era. Such roads increased the accessibility

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