Should Living Near The Subway Come At A Price?

Written By Laura Schier | February 16, 2018 | Published in NYC Lifestyle, Real Estate Market Trends
2018%2f02%2f12%2f16%2f06%2f59%2f942e600d 3bce 4be1 b0ed 13b08b2bfd52%2fnyc%20subway%20

New Yorkers who live in close proximity to a subway station can enjoy more convenience, whether they are commuting to work or just traveling for leisure. But should this convenience come at a cost? Some policymakers think so and are currently supporting the implementation of a new tax on property owners who live near subway stations.

Called “value capture,” this property tax for residential ] homes located close to stations has been debated for years among urban planners. Now, Governor Andrew Cuomo wants to officially impose value capture, which will, in turn, provide profits to help salvage the currently declining subway system. His proposition is to give the Metropolitan Transit Authority the right to impose taxes on places that they designate “transit improvement subdistricts,” with value capture districts the MTA can extend as far as one mile from a subway station.

The policymakers that support value capture want the subway to prosper from the financial benefits it provides nearby NYC residences, through increases in property value. One such area in which developments have risen in value is the Upper East Side, in which condo and co-op prices have climbed 6 percent since the Second Avenue subway officially opened back in January of 2017. And calculations by Professors Constantine Kontokosta and Giancarlo Falcocchio, two New York University economists, show that being situated close to the subway increases value to commercial property by $3.85 per square foot in Manhattan’s main business corridors, starting at 60th Street and going south.

The plan has yet to come to fruition as it still needs legislative approval, but is receiving a growing consensus, as the NYC subway is currently experiencing its worst crisis in decades. With nearly 75,000 delays per month, delays are costing the city up to $389 million per year. Much of the system’s technology is over a century old, and with the increase of other malfunctions such as derailments, the subway is in dire need of repair. According to Kathryn S. Wylde, president and chief executive of the Partnership for New York City, value capture is the “solution of the moment.” President of the Regional Plan Association Thomas K. Wright thinks of the tax as an “innovative financing mechanism” which would enable the subway to receive significant funds for much-needed improvements. Governor Cuomo proposes that funds from the plan be applied to MTA projects costing over $100 million, including projects involving the extension of existing subway lines. 


Mentioned neighborhoods

Upper East Side

Blog Archive


This information is not verified for authenticity or accuracy and is not guaranteed and may not reflect all real estate activity in the market. © 2021 REBNY Listing Service, Inc. All rights reserved. RLS IDX Data display by Elegran LLC. IDX information is provided exclusively for consumers’ personal, non- commercial use and that it may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing.

Elegran LLC may or may not be the exclusive listing agent of the properties being displayed on All data displayed on is presented for informational purposes only and should be independently confirmed by all customers. All Information is compiled from both public and private sources including, but not limited to the RLS, MLS and ACRIS; each of which is assumed to be reliable. All information displayed is subject to errors and omissions regarding apartment specifications and final sale prices, and further, any unit listed may have had its listing withdrawn without notice subsequent to such information being compiled. No representation is made as to the accuracy of any description (ie: listing, close sale data, and/or building description) of any building or individual unit. All measurements and square footage are approximate and all information herein should be confirmed by customer and/or their attorney. Elegran LLC, its members, affiliates, and contributors adhere to New Your City, New York State, and United States Fair Housing Laws.