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NYC 9/11 Public Portal Document

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CHAPTER FOUR

ILLUSTRATIVE APPLICATIONS OF NYREG AND VALUE CAPTURE IMPLICATIONS We now report the results of seven equilibrium simulations performed by means of the calibrated NYREG model. Simulations 1 through 5 are based on travel times between model zones derived from the reported 1980 Census times. Simulations 6 and 7 are based on network travel times between model zones. The results of several variants of the major simulations are also shown. In each of these simulations, the base travel times are changed in some assumed manner and NYREG is run to determine the impact of the change on mode splits for commuting and shopping trips, on changes in housing rents by housing type and model zone, on changes in commercial rent per square foot by shopping zone, and on the benefits (consumer surplus, producer surplus in the housing market, and producer surplus in the commercial floor space market). Each simulation is presented in three sets of tables (Set 1 for I modal splits. Set 2 for rents. Set 3 for benefit changes) . Variants of a simulation are presented only for benefit changes. The most important of these simulations are now discussed in detail. Equilibrium Simulation 1; A Decrease in Subway Commuting Times 'f

In this simulation subway commuting times are reduced by 5% for all origin destination pairs on which subway travel is feasible. It can be seen from the table on modal splits, that subway ridership increases by nearly 1.5% while the competing modes lose some ridership. Because of the savings in commuting time, shopping trips by both modes increase as households allocate some i of the time saved in commuting to shopping travel. Because most subway commuting is oriented to Manhattan, the reduced subway travel times allow some households to relocate to the surrounding boroughs. Hence, rents in Queens, the Bronx and Brooklyn increase while rents in Manhattan decrease. Relatedly, vacancies in Manhattan increase while those in the other boroughs decrease. Because of the increased shopping demand, commercial rents increase in each borough. From the benefits table, we can see that the benefits are significant. The producer surplus in the housing market increases by a little over $50 million dollars per year and that in the commercial market by close to $9 million per year. This occurs despite the fact that 97%, of the benefits are in the form of higher utility levels captured by the travelers.

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