With MTA’s recent transportation cuts in New York City, property values are taking a hit. In an article by the Wall Street Journal, one real estate agent in Astoria said apartments that “easily sold for $500,000 with the express bus nearby are now languishing on the market at prices about $420,000.” That is an $80,000 decrease, multiply that along the potential length of the route and the result is a huge financial impact – an amount far greater than the cost of maintaining the line.
MTA does not reap any rewards from the surrounding property value, atleast on the balance sheet. Stephen Smith points out in Internalizing Transit Externalities, that at “the turn of the century, when America’s great mass rail-based transit systems were being built, they were often built by developers who had large stakes in land around their stations.” Also, he adds that Japan and Hong Kong are backtracking and investing in land around their transportation hubs to generate high ridership. It is unlikely that the rail in NYC will become privatized. However, private bus services are trying to make a comeback and deemed a “palatable stepping stone.”
