Erich the Green, Dec 19. Prices of land near new transit stops rise in value, clearly the result of the improved transit. Mass transit can pay its own way.

Transit can pay its own way with Land Value Capture

Erich Jacoby-Hawkins
Thursday, December 19, 2013

Excerpt:

“Imagine a new streetcar or subway line were built and extra money started magically appearing in cash registers of businesses along it; along the route, especially at stops, landlords suddenly got a cash bonus with their monthly rent cheques. Meanwhile, businesses along this line saw costs drop because they needed to provide less parking for employees and customers even as employee retention and sales traffic went up, further boosting bottom lines.

If all this were clearly marked as coming from the transit service, which the government paid to install and run, would it be fair for businesses or landlords to pocket that cash? Would it make more sense for that free extra money to be collected by the government that created it? Of course it would, and doing so would let transit pay for itself without expensive taxpayer subsidies.

This approach is called Land Value Capture (LVC), and is how Ontario should finance improvements in transit. The beauty of LVC is that it doesn’t increase anyone’s real tax burden at all, it just reclaims some of the extra revenue public infrastructure creates from the landowners who didn’t do anything to earn it.”