Gov. Cuomo Proposes Value Capture Plan For Developments Near New Subway Stops
Gov. Andrew Cuomo has proposed a new way to fund subway improvements by taxing landlords on increased property values.
The proposal, which is short on details and still must pass through the state legislature, would create "transit improvement districts," within which building owners would pay additional taxes based on estimated growth in property value due to new or improved subway and Metro North stops, the New York Times reports.
The strategy is called "value capture," and it is already in place in cities like Seattle, Los Angeles, London and Hong Kong, according to the Times. It has the support of the Regional Plan Association, which highlighted transit improvements as crucial to the continued health of the city in its recently released Fourth Plan. Cuomo's proposal would not apply to completed projects, such as the Second Avenue Subway, and would only come into play for new projects costing over $100M.
Among the proposal's critics is the office of Mayor Bill de Blasio, which bristled at the concept of a property tax system that bypasses the city government, according to the Times. Cuomo's plan states that the MTA would levy the tax and keep 75% of proceeds, with the remaining 25% going to the city.
To foster cooperation between the state-run MTA and the city, the proposal includes the use of a four-person board, including one city representative, that would have to unanimously approve all tax decisions.
The value-capture plan would be a more direct version of what Mayor Michael Bloomberg used for Hudson Yards, where he pledged $1.8B of city money to fund the extension of the 7 line based on anticipated property tax revenue from development in the new district.