New York City proposes to use value capture to finance the Brooklyn Queens Connector (BQX), a proposed state-of-the-art streetcar. Read on…
New Plan for Streetcar: Shorter, Pricier and Not Coming Soon
New York Times
August 31, 2018
Excerpts from Completion of Design Report, Aug. 2018, and the New York Times article.
The Brooklyn Queens Connector (BQX) is a proposed state-of-the-art streetcar envisioned to link the rapidly growing and evolving waterfront communities from Brooklyn to Queens.
BQX’s modern and fully accessible vehicles will run along a largely exclusive right-of-way and have signal priority at intersections, giving passengers a comfortable ride as they by-pass on-street vehicle traffic. At full build-out, BQX will connect over 400,000 New Yorkers—including 40,000 New York City Housing Authority (NYCHA) residents, many of whom live more than half-mile from a subway—to emerging employment hubs along the corridor. In addition, BQX will provide much needed connections to the City’s existing public transit system, including subways, buses, ferries, and CitiBike. Greater connectivity with the existing public transit system will increase access to the many parks, academic institutions, job opportunities, and cultural centers within the corridor.
The proposed BQX project is expected to cost $2.7 billion and generate $30 billion in economic impact, plus $1.3– 1.4 billion in value capture—a strong return on investment.
Economic Benefit
BQX is projected to generate significant economic benefit. The City examined two dimensions to economic benefit: economic impact and value capture.
Economic Impact
BQX is projected to generate $30 billion in gross economic impact over 40 years. This includes the creation of approximately 16,000 temporary construction jobs and almost 4,000 permanent jobs.
Value Capture
Value capture is a mechanism governments utilize to finance the capital costs of new infrastructure. The basic concept behind value capture is that public investment in infrastructure benefits the community and increases the value of private property. Governments can use various tools to harness a portion of the increased property value—including property taxes and special assessments—to repay bonds issued to fund the initial infrastructure investment.
In the case of BQX, the City conducted an in-depth assessment of the potential impact of BQX on property taxes for properties within ½ mile of the route over a 40-year period. The City also assumed no major rezonings over the same time period.
The property tax-based value capture due to BQX from Red Hook to Astoria is estimated at $1.3–1.4 billion. This includes planned projects along the corridor.
But a $1.3 billion funding gap has opened up, mostly because much of the increase in tax revenue for other purposes, including affordable housing, making it unavailable for the streetcar, Deputy Mayor Alicia Glen said.
Comment: Common Ground – ORWA is also proposing to use the value capture mechanism in the Southwest Transit Corridor linking downtown Portland to Tigard. The difference is that our proposal uses the revenue captured from benefiting property owners to finance transit-oriented development including affordable housing rather than transit infrastructure. If New York City did the same, it might avoid the prohibition it now faces.
