Today, with the subway in precipitous decline and the city enjoying an economic boom, some policymakers think the time has come for the subway to profit from the financial benefits it provides, including its considerable contribution to property values.
Proponents point to the Upper East Side of Manhattan, where co-op and condominium prices in a 10-block stretch near the Second Avenue subway have risen 6 percent since it opened in January 2017, according to figures from the Corcoran Group, a large real estate firm. …
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. 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 the power to designate “transit improvement subdistricts” and impose taxes. …
The Cuomo proposal calls for before and after assessments in neighborhoods where a new transportation project, like the extension of a subway line, raises property values. Officials would determine the difference between the previous assessment and the new, higher one.
Of the tax on that difference, 75 percent would go to the transit agency and 25 percent to the city. …
Value capture is a familiar concept outside New York and has been used as a way to fund transit projects in other cities, including Los Angeles, Seattle, London and Hong Kong. In New York, Mr. Wright, of the Regional Plan Association, called the Second Avenue subway “a lost opportunity” in terms of value capture.
That proposal makes sense, although citizens expect the various governments to get along and pay money to each other behind the scenes as property taxes usually capture value upside.
Some states though – not sure if NY – do not allow property taxes at market for existing owners, only for new buyers, delaying this lift by decades sometimes [ that is the situation in CA to my knowledge ]
In BC the BC Assessment Agency finally caught on and is actually closing the gap between assessed values and actual values after years of a major gap.