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NYC 9/11 Public Portal Document

CHAPTER ONE

INTRODUCTION

Since the days of the first streetcar lines, access by public transit has been known to increase land values in the areas served. Early transit entrepreneurs frequently derived their income not so much from the carrying of passengers as from the sale of land served by new lines. Indeed, the benefit of access was capitalized into the value of their land.

The advent of the automobile greatly diminished the importance t of access by public transit and severed the link between the providers of accessibility and those who derived revenue from it. The former came to be mostly public bodies, highway departments or transit agencies, and the latter mostly private owners whose land I happened to be located near a freeway interchange or transit station. Decades of public subsidies to highways and then transit obscured the relationship between transportation investment and land rent, irrespective of ownership. In recent years, as constraints on public sector resources became increasingly recognized and efforts to reduce the role of subsidies in society took hold, attention has turned to the i question of how the land value increment created by publicly I provided transportation improvements can be captured to defray a i part of their cost.

Perhaps nowhere does this issue loom larger than in New York. Restoration of worn-out capital stock to a state of good repair together with normal replacement of equipment and facilities on the Metropolitan Transportation Authority (MTA) system will require $1.67 billion per year in 1990 dollars to 2015. New initiatives required to expand capacity over the next twenty years will entail $800 million of outlays annually between 1992 and 1997. As yet, no long term funding sources of this magnitude have been identified. A study of the relationship between land values and transit access, as the necessary precursor to value capture financing for public transit, was undertaken by Regional Plan Association as a research prototype for transit systems serving the Region and the nation, and as an input to preparation for the third Regional Plan of the New York-New Jersey-Connecticut Region. As such, the models developed for the New York Metropolitan Area, and described in this Handbook for transit industry practitioners, are now in process of extension and disaggregation within the broader MTA district and, ultimately, of application to transit policies and initiatives throughout the Tri-State area.

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