We analyze the impact of the Second Avenue Subway (Q-train) construction on local real estate prices, which capitalize the benefits of transit spillovers. We find evidence of higher real estate prices in the vicinity of areas served by the new Q-train, relative to other areas in Manhattan's Upper East Side. Only 30% of the private value created by the subway leads is captured through property taxes, and is insufficient to cover the cost of the subway. Value capture through targeted property tax increases can help close the funding gap.
Gupta, Arpit, Constantine Kontokosta, and Stijn Van Nieuwerburgh. "Take the Q Train: Value Capture of Public Infrastructure Projects." Columbia Business School, August 2020.
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