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Transportation

Does Transit Always Increase Land Value?

Cities are harnessing future land values to pay for new infrastructure. But the research behind this approach may be flawed.
People enter the 34th Street and 11th Avenue subway station, New York City's first new station in a quarter-century.
People enter the 34th Street and 11th Avenue subway station, New York City's first new station in a quarter-century.AP Photo/Mark Lennihan

In transportation planning, the logic is pretty consistent: Build a rapid transit station, and land values are supposed to jump up.

That’s because rail and bus rapid transit provide all kinds of benefits—reduced cost, time, and stress for commuters; cleaner air; more walkable neighborhoods—that can be translated into dollars and factored into property values. Cities can “capture” this “land value uplift” to pay for transportation infrastructure projects (for example, by creating a special tax on certain developments that are projected to benefit most from the expanded transit access). This is the basic financing mechanism behind many recent major projects across the country, including Hudson Yards in New York City. Land value uplift is also important information for potential developers, who might eye land more hungrily when there’s a new train station on the way.