...New York State’s long-overdue FY 2027 state budget, adopted late Tuesday, includes a powerful alternative to fund those projects: land value capture. Widely used in Japan, Hong Kong, and elsewhere and known as the “Rail plus Property model,” land value capture encompasses policy tools that connect the private real estate value created by local public investments with the funding needed for those investments to trigger a virtuous cycle of cost-effective growth.
When the MTA expands the transit network, residents near new stations can access more jobs and services in a fixed amount of time, and businesses can access a larger labor pool and customer base. These benefits substantially increase the value of nearby properties. Land value capture allows the public to recoup a share of that windfall — on the principle that public investments shouldn’t exclusively enrich private landowners — and reinvest it for public benefit.
New York City and the MTA should recognize this principle and use land value capture to fund the IBX, finally resuming the continuous expansion of the subway system that stalled before World War II.
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Reed Schwartz
