Regular readers of this newsletter already know lots of good reasons to build ARC — that nearly all the growth in commuters to Manhattan is west of the Hudson River, that ridership on NJ TRANSIT has quadrupled since 1980, that the one and only train tunnel under the Hudson is at capacity, that a new source of workers is going to be necessary to fill out the Far West Side with a new office district, and so on.
Well, here's a new reason: that the significantly improved commutes that ARC will make possible will boost home values near train stations, increase municipal tax bases and reduce the pressure to raise property tax rates.
A new study released today by RPA analyzed 45,000 home sales before and after recent NJ TRANSIT improvements — Midtown Direct, Montclair Connection and Secaucus Junction — to determine how the reduced commute times they brought about affected property values around train stations. By then estimating the reductions in commuting times that ARC will enable, RPA calculated the potential effect of ARC on home values.
The bottom line? That ARC could increase home values within two miles of train stations by a cumulative $18 billion. For stations within 70 minutes of Midtown, this translates to an average of $19,000 per home. The effect is most pronounced nearest the stations, with an estimated increase of $29,000. Higher home values means higher tax bases, and higher tax bases reduce the pressure to raise property tax rates.
The report also found that thanks to faster and more frequent service, the number of people in New Jersey who live less than a 50-minute train commute to Midtown will double when ARC is completed. The number of people who live less than a 70-minute train commute will increase 25%. Considering that wages are 60% higher in Manhattan than west of the Hudson River, this is big news to both suburban households' income potential, and Manhattan's businesses who want access to New Jersey's fine labor pool.
ARC will have a tremendous impact on the region's economy. Both the short-term benefits of infrastructure spending and the long-term economic and environmental benefits of new rail service far outweigh the costs.