Value Capture Takes Prominent but Controversial Role in Fixing New York Subway
"The notion that property owners should pay extra for their proximity to the subway is called 'value capture' and has long been debated in urban planning circles," writes James Barron for The New York Times on Jan. 29.
In one of many recent New York Times feature articles (posted here Jan. 12) on the subway's woes, Jonathan Mahler noted that the world's most successful subway, the MTR in Hong Kong, derives much of its revenue from its transit-adjacent property holdings. A Brooklyn real estate developer cited in the piece was quick to recognize the importance of subway access.
“Developers build things where the subway works, and we build far fewer things where it doesn’t,” said Jed Walentas.
In his words, it’s “insane” that so little of the wealth that the subway generates flows back into the system.
"Now Gov. Andrew M. Cuomo, a Democrat, has made value capture a prominent part of his plan to salvage the subway system by proposing to give the Metropolitan Transportation Authority the power to designate 'transit improvement subdistricts' and impose taxes," adds Barron. And there's the mayor's office to consider:
"It’s not going to pay in its entirety for the capital requirements for any one project,” said Patrick J. Foye, the president of the transit authority, “but it could over years or decades provide significant new funding.”
At least two groups have announced their support for the use of value capture to fund subway improvements.
And Thomas K. Wright, the president of the Regional Plan Association, an urban policy organization, called value capture an “innovative financing mechanism” that New York is missing out on, even as the subway “is making some people very, very wealthy.
Two NYU economics professors endorsed the concept in November, citing specific values subway proximity adds to midtown properties.
While the aforementioned Brooklyn developer spoke in favor of value capture, a spokesman for "the Real Estate Board of New York, which represents New York’s developers, said the proposal 'raises serious questions that need to be evaluated, especially when it deals with a property tax system that we know already has serious problems,'” adds Barron.
Carl Weisbrod, who was named to the transit agency’s board by Mr. de Blasio and was the chairman of the city’s Planning Commission from 2014 until early last year, said value capture demanded “close cooperation between the M.T.A. and the city on a case-by-case basis.”
“To simply impose it on the city isn’t going to work,” he said.
Value capture was also mentioned as a financing mechanism included in the leaked draft of the Trump infrastructure plan last week.
Lots of good reading in Planetizen on the importance of value capture in terms of funding public transit, among them:
- Mega Project in Suburban Atlanta Gets Final Public Financing Piece: Value Capture, January 25, 2017
Op-Ed Supports Value Capture-Enabled Transit Investment (by Los Angeles Metro), May 31, 2016
FEATURE: Capturing the Value of Transit (in Portland and Denver), May 11, 2009
- New York
- Community / Economic Development
- Government / Politics
- Urban Development
- Land Value Capture
- New York Subway
- Transit Funding
- Transportation Finance
- Value Capture
- New York Metropolitan Transportation Authority
- Metropolitan Transportation Authority
- Partnership for New York City
- Real Estate Board of New York
- Regional Plan Association
- James Barron
- Governor Andrew Cuomo
- Mayor Bill de Blasio
- Jonathan Mahler
- Jed Walentas
- Carl Weisbrod
- Thomas K. Wright
- Kathryn S. Wylde