A ground-breaking new report from the Regional Plan Association confirms that the Access to the Region’s Core project will have immense economic benefits. The $8 billion project broke ground last year, and when complete in 2017, will double rail service between Manhattan and New Jersey.
The report found that home values within two miles of the 10 NJ TRANSIT lines and two MetroNorth lines that will benefit from ARC will increase by an average of $19,000, generating an additional $375 million in annual property tax revenue for New Jersey’s struggling municipal budgets.
To determine the effect that ARC could have on home prices, RPA’s Juliette Michaelson looked at the effect on home prices of three previous improvements to NJ TRANSIT rail service: Midtown Direct Service on the Morris & Essex Line; the Montclair Connection; and the Secaucus Junction. Michaelson performed a statistical analysis on 45,000 home sales within two miles of stations along those lines, and found that home values increased by an average of $23,000 (in 2009 dollars) as a result of the trip time reductions from those three projects. For homes within walking distance (1/2 mile) of stations, property values increased by $34,000. Cumulatively, the three projects produced about $11 billion in increased home values, and generated $250 million per year in additional property tax revenues.
Michaelson calculates that each minute of time savings from NJ TRANSIT rail improvements results in a $1,959 increase in home value (houses within a 1/2 mile of a station can expect a $2,902 increase per minute of time savings). By applying those rates to the anticipated time savings from the ARC project — averaging 10 minutes across the region — Michaelson determines that the ARC project will produce a cumulative increase in housing prices of nearly $18 billion.
Given the poor way the ARC is designed, whoever is coming up with those benefits is smoking what David Gunn calls funny cigarettes. The line doesn’t connect to the existing Penn Station. It doesn’t connect to Grand Central to allow through running thus reducing bottlenecks on both Metro North and NJT. The loop through Secaucus Junction is ridiculous and that is just for starters.
It’s only a benefit when you sell your house. Unless you sell quickly after the new service starts, it’s likely any gains will be consumed by increased property taxes.
[…] New Transit Tunnel Under Hudson Will Be a Property Tax Windfall For NJ (MTR, […]
@clever-title,
The same can be said about projects which decrease housing value. Suburban homeowners frequently howl like mad about “property values” when trying to build a new prison, low-income housing, etc – but that loss of property value only occurs when you sell your home, and in the meantime, you are seeing the benefit of reduced property tax. So that sword cuts both ways.
Do we really want to promote this as a welcome development in a metro area that is one of the most stratified in the world? Report after report has shown how NYC’s suburbs are growing grayer as members of Generations X and Y are unable to purchase suburban homes due to the outrageous asking prices and property taxes within these communities. ARC will surely increase mobility, but it’s not going to do any favors for the crushing supply and demand problem plaguing the housing stock Bergen County and other NYC suburbs.
[…] hope for reduced congestion and improved transit connections across the Hudson, not to mention economic benefits for homeowners. The next governor should continue to support ARC, and ensure the Port Authority also works for […]
This study may or may not be accurate. We will never know for sure. What we do know for sure is that some NJ residents will benefit from this but others will not likely benefit much if at all. And other residents will pay for it.
East Brunswick is a perfect example. We got hammered by the NJ Turnpike and Parkway toll increases and will get hit again when they go up again. But virtually no one from our community takes the train since no train station is convenient and parking has historically very difficult to get. Instead our commuters go by bus and our issues are virtually ignored (tunnel problems, proposal to eliminate special NJ Turnpike express lane, PABT congestion, etc.)
Why don’t we have these lucky residents near a train station pay for this instead? Most towns make it hard to impossible for non-locals to take the train anyhow. Why should we pick up the tab for this? Try to get parking in Millburn if you are not a resident. Should I just mail a check to every Montclair resident every month as part of the deal? They have 5 train stations in one town, we have none. How does this make sense?
While I don’t doubt that the improved rail transit options will raise home values close to rail lines, the TSTC should be more concerned with ARC’s important shortcomings. 1. By failing to connect the new tunnel with Penn Station NJT has greatly reduced operational flexibiltiy during breakdowns, emergencies and for routine track repairs. 2. By failing to connect the new tunnel with Penn Station NJT has provided very little increased capacity for intercity passenger rail service for travel north and south of NYC. 3. By failing to connect the new tunnel with Penn Station NJT has doomed NJT riders to use of an extremely deep cavern station that will require long travel times to the street and subway connections.
NJT is penny wise and pound foolish with the ARC as currently designed.
“Trying to Drum up Support for the Tunnel” — The study is clearly based on ASSUMPTIONS about what the home values will be and how it will impact jobes and real estate in that particular area of NJ. NJ will spend Billions it does not have for this tunnel and a few will supposedly benefit. We all have seen & will see our taxes increase drastically in the next few years as a result of the State Legislature and our “don’t care about the people” governor because of the reductions in school aid and staff. All the while giving our tax money to “charter schools”. The $18 Billion of benefits is clearly fiction. The money for a tunnel that many experts have said will not do what the designers claim should be spent elsewhere or not at all. The final cost will be 2 to 3 times what has been advertised. It always is. A waste from start to finish. Vote out the proponents of this fiasco.
[…] Higher property values for New Jerseyans living near rail stations, as well as the potential for increased transit-oriented development. […]