STUDY: SEPTA Service Cuts Could Slash Property Values By Nearly $20B
Property values risk taking a big tumble across greater Philadelphia if the Southeastern Pennsylvania Transportation Authority’s “death spiral” service cuts take effect.
Residential property values could fall by $19.9B if the worst-case scenario comes to pass next year, according to a new study — $12.2B in the suburbs and $7.7B in Philadelphia proper.
The SEPTA-contracted economic impact study from Philadelphia-based Econsult Solutions also warns that a nascent return-to-office movement could take a major hit.
SEPTA faces a $213M budget shortfall come July 1, and it has warned that could lead to the elimination of 50 bus routes and five regional rail lines. The agency may also implement fare hikes and systemwide service cuts.
“SEPTA would go from being the economic driver of this city and region to its limiter,” Board Chair Kenneth Lawrence Jr. said in a statement earlier this month.
Econsult's study found that $31.3B, or 5.8% of all housing value in Southeast Pennsylvania, can be attributed to SEPTA service, breaking the data down for each of the five regional lines it might abandon.
The 122,000 homes within 3 miles of the Paoli/Thorndale Line would be most severely impacted, with a total loss of almost $7B. That comes out to a mean of $56,800 per household.
The impact would be more than $4.2B for the 161,600 homes within 3 miles of the Chestnut Hill West Line and more than $3.4B for the 72,400 homes surrounding the Cynwyd Line.
The report also warns that Center City’s partial office recovery could be at risk of a backslide. The neighborhood’s office sector had a 19% vacancy rate last year, up from 12% in 2019.
Econsult cited a CBRE report predicting that the vacancy rate will climb to 25% by the end of 2026 following a wave of lease expirations.
“These cuts to SEPTA’s service — which would hurt our economy and make it harder for hundreds of thousands of Pennsylvanians to get to work, school, and wherever else they need to go — are completely avoidable,” Pennsylvania Gov. Josh Shapiro said in a statement.
The agency’s financial woes are partly due to a lack of support from the legislature in Harrisburg. For the past two years, the governor has used flex funding to help SEPTA avoid a fiscal cliff after the Republican-dominated state senate failed to pass Shapiro's more permanent funding proposals.
Shapiro’s current budget proposal includes a 1.75% funding increase for transit systems across the commonwealth, which would bring in an additional $161M for SEPTA, City & State Pennsylvania reported.
“It is now squarely on the state Senate to come to the table and pass more funding for mass transit that their own constituents rely on,” Shapiro said.
