Value Capture Takes Prominent but Controversial Role in Fixing New York Subway

Value capture, collecting tax increment from subway adjacent properties to help provide money needed to repair the 114-year old subway system, is proposed by New York Gov. Andrew Cuomo and opposed by the New York City Mayor Bill de Blasio.

3 minute read

January 31, 2018, 5:00 AM PST

By Irvin Dawid


Second Avenue Subway

robert cicchetti / Shutterstock

"The notion that property owners should pay extra for their proximity to the subway is called 'value capture' and has long been debated in urban planning circles," writes James Barron for The New York Times on Jan. 29.

In one of many recent New York Times feature articles (posted here Jan. 12) on the subway's woes, Jonathan Mahler noted that the world's most successful subway, the MTR in Hong Kong, derives much of its revenue from its transit-adjacent property holdings. A Brooklyn real estate developer cited in the piece was quick to recognize the importance of subway access.

“Developers build things where the subway works, and we build far fewer things where it doesn’t,” said Jed Walentas.

 In his words, it’s “insane” that so little of the wealth that the subway generates flows back into the system.

"Now Gov. Andrew M. Cuomo, a Democrat, has made value capture a prominent part of his plan to salvage the subway system by proposing to give the Metropolitan Transportation Authority the power to designate 'transit improvement subdistricts' and impose taxes," adds Barron. And there's the mayor's office to consider:

"It’s not going to pay in its entirety for the capital requirements for any one project,” said Patrick J. Foye, the president of the transit authority, “but it could over years or decades provide significant new funding.”

At least two groups have announced their support for the use of value capture to fund subway improvements.

Value capture is “the solution of the moment,” said Kathryn S. Wylde, the president and chief executive of the Partnership for New York City, an influential group of business leaders.

And Thomas K. Wright, the president of the Regional Plan Association, an urban policy organization, called value capture an “innovative financing mechanism” that New York is missing out on, even as the subway “is making some people very, very wealthy.

Two NYU economics professors endorsed the concept in November, citing specific values subway proximity adds to midtown properties.

While the aforementioned Brooklyn developer spoke in favor of value capture, a spokesman for "thReal Estate Board of New York, which represents New York’s developers, said the proposal 'raises serious questions that need to be evaluated, especially when it deals with a property tax system that we know already has serious problems,'” adds Barron.

Carl Weisbrod, who was named to the transit agency’s board by Mr. de Blasio and was the chairman of the city’s Planning Commission from 2014 until early last year, said value capture demanded “close cooperation between the M.T.A. and the city on a case-by-case basis.”

“To simply impose it on the city isn’t going to work,” he said.

Value capture was also mentioned as a financing mechanism included in the leaked draft of the Trump infrastructure plan last week.

Lots of good reading in Planetizen on the importance of value capture in terms of funding public transit, among them: 

Monday, January 29, 2018 in The New York Times

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Get top-rated, practical training

Wastewater pouring out from a pipe.

Alabama: Trump Terminates Settlements for Black Communities Harmed By Raw Sewage

Trump deemed the landmark civil rights agreement “illegal DEI and environmental justice policy.”

April 13, 2025 - Inside Climate News

High-rise apartment buildings in Waikiki, Hawaii with steep green mountains in background.

Study: Maui’s Plan to Convert Vacation Rentals to Long-Term Housing Could Cause Nearly $1 Billion Economic Loss

The plan would reduce visitor accommodation by 25% resulting in 1,900 jobs lost.

April 6, 2025 - Honolulu Civil Beat

Blue and white Seattle Link light rail train exiting concrete Downtown Bellevue Tunnel in Bellevue, WA.

Why Should We Subsidize Public Transportation?

Many public transit agencies face financial stress due to rising costs, declining fare revenue, and declining subsidies. Transit advocates must provide a strong business case for increasing public transit funding.

April 7, 2025 - Todd Litman

Silhouette of man holding on to back of bicycle ridden by woman with Eiffel Tower in background.

Paris Bike Boom Leads to Steep Drop in Air Pollution

The French city’s air quality has improved dramatically in the past 20 years, coinciding with a growth in cycling.

April 14 - Momentum Magazine

Multifamily housing under construction.

Why Housing Costs More to Build in California Than in Texas

Hard costs like labor and materials combined with ‘soft’ costs such as permitting make building in the San Francisco Bay Area almost three times as costly as in Texas cities.

April 14 - San Francisco Chronicle

Western coyote looking at camera in grassy field.

San Diego County Sees a Rise in Urban Coyotes

San Diego County experiences a rise in urban coyotes, as sightings become prevalent throughout its urban neighbourhoods and surrounding areas.

April 14 - Fox 5