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Rpa The Arc Effect
Rpa The Arc Effect
Effect
Homes near train stations significantly Thanks to faster commute time, the The median wage earned in Manhattan
gained in value after Midtown Direct, number of New Jersey and New York is 60% higher than in New Jersey
Montclair Connection and Secaucus residents with a train commute to Mid- (Source: Bureau of Labor Statistics, 2009)
Junction – an average of $23,000 per town of under 50 minutes will double
home, with the highest gains closest to after ARC
Manhattan
$80,000
the stations Minute-equivalents
to Midtown Manhattan
71- 90
$10,286 (2.3%) 51-70 70,000
< 50
$15,287 (3.4%) 3m
$22,524 (5.0%) 60,000
$33,852 New
(7.5%) 25% more
residents Jersey
.5 under 50,000
1 2m 70 min
1.5
2 mi.
40,000
100% more
residents
under
Median sale price (FY09 dollars): $451,000 1m 50 min 30,000
Average trip-time improvement: 12 minutes
Price increase over 9 years
20,000
The ARC Effect: How better transit 1 boosts home values and local economies
The ARC Effect: How better transit 2 boosts home values and local economies
Introduction accessible housing, as reflected in home
values near train stations.
This prospective analysis is based on
Increase in Hudson River crossings,
by mode since 1980
200%
ARC is New Jersey and New York’s biggest past experience. In 1996, 2002 and 2003, NJT
investment in transit ever. It involves the NJ TRANSIT significantly improved train
construction of a second commuter rail service with Midtown Direct Service on
tunnel that will connect NJ TRANSIT’s the Morris & Essex Line, the Montclair
existing rail network and Metro-North’s Connection for the Montclair-Boonton
Port Jervis and Pascack Valley service with Line, and Secaucus Junction for the Pascack
a new terminal station at 34th Street in Valley and Main/Bergen/Port Jervis
Manhattan. ARC will double the number Lines. Each of these projects shaved up bus
of trains that can travel every morning into to 20 minutes in travel time to Midtown
100
the economic engine of the region from Manhattan (up to 40 minutes roundtrip).
west of the Hudson River. For several train Anecdotally, there is little doubt that most
lines that currently terminate in Hoboken of the communities along these four train
or Newark, ARC will provide new, direct lines experienced increases in home values
service to Midtown. For those lines that due to the improved service. This statistical PATH
already terminate at Penn Station-NY, ARC analysis attempts to measure quantitatively
will significantly increase the frequency and the relationship between home values and
reliability of service. improved train service, all things being
The purpose of this analysis is to assess equal, as reflected in 45,000 home sales,
how this increased access to Midtown before and after the projects were built, -6
will increase the attractiveness of transit- within two miles of the train stations. cars
How past and future capital projects have improved, and will further improve,
rail access to Manhattan from west of the Hudson.
PAST FUTURE
Main/Bergen/ Main/Bergen/
Port Jervis Line Port Jervis Line
New one-seat
ride to Midtown New one-seat
NY NY
ride to Midtown
Transfer at Secaucus
instead of Hoboken Increased frequency
Pascack Pascack
Valley Valley
Line Line
Dover
Secaucus Dover
MSU
ARC
NJ
MSU
Junction
Morris &
Essex Line
NJ Morris &
Essex Line Newark Penn
Montclair Kearny
Connection Connection
Raritan Valley Line Raritan Valley Line
Long
Branch
The ARC Effect: How better transit 3 boosts home values and local economies
Travel time to Midtown Travel time to Midtown
NY NY
in minute-equivalents in minute-equivalents
<50 <50
<70 <70
<90 <90
90+ 90+
NJ !
!
NJ !
!
1995 2010
A reasonable commute of 50 or 70 minute-equivalents gets passengers much farther into New Jersey and New York now
than before Midtown Direct, Montclair Connection and Secaucus Junction. The improvements will be even more dramatic
after ARC. (All travel times calculated for the morning peak two-hour period. See box on page 6 for an explanation of minute-equivalents.)
Travel improvement
Lines
Improvement affected Travel time Frequency Transfers
Midtown Morris & Essex Reduction in travel time due to Same frequency but half the trains One-seat ride instead of transfer to
Direct a) loss of transfer and b) loss of now go to Penn Station-NY instead PATH at Hoboken
wait time for second train of Hoboken
Montclair Montclair-Boonton (MSU Reduction in travel time due to Increased frequency but half the One-seat ride instead of transfer to
Connection and east) a) loss of transfer and b) loss of trains now go to Penn Station-NY PATH at Hoboken
wait time for second train instead of Hoboken
Past
Secaucus Main/Bergen/Port Jervis; Reduction in travel time due to Same frequency One transfer still required – now at
Junction Pascack Valley faster service to Penn Station-NY Secaucus instead of Hoboken
on NJT via Secaucus than on
PATH via Hoboken
ARC Northeast Corridor; Morris Slight improvement in travel Increased frequency Same one-seat ride
& Essex (MSU and east); time due to increased system
Montclair-Boonton; North reliability
Jersey Coast
Future
ARC Main/Bergen/Port Jervis; Reduction in travel time due to Increased frequency but some trains One-seat ride instead of transfer to
Pascack Valley; Raritan a) loss of transfer and b) loss of will go to Penn Station-NY instead of NJT at Secaucus or Newark, or to
Valley wait time for second train Hoboken or Newark PATH at Hoboken
ARC Montclair-Boonton past MSU; Reduction in travel time due to Increased frequency but some trains One-seat ride instead of same-
North Jersey Coast past Long a) loss of transfer and b) loss of will go to Penn Station-NY instead of platform transfer to electrified line
Branch; Morristown past wait time for second train Hoboken or Newark
Dover
Note: The improvements described above are overall improvements that apply to entire lines. Specific stations are subject to specific service
schedules.
The ARC Effect: How better transit 4 boosts home values and local economies
What similar research has shown:
The ARC Effect: How better transit 5 boosts home values and local economies
Methodology
& Findings What is a minute-equivalent?
This study relied on a multiple regression In order to compare the different trips that NJ TRANSIT and Metro-North commuters
analysis of home sales before and after make every day, the value of certain commute factors, such as train transfers and service
NJ TRANSIT’s three projects were frequency, was translated into a common currency, called minute-equivalents. The model
inaugurated in order to identify the value assigns a “value,” in minute-equivalents, to the burden of having to change trains or having
of improved transit service among several to wait for a train in the morning peak, so that this burden can be compared with the actual
property characteristics. Once this value time spent traveling on a train. This methodology was developed by NJ TRANSIT and has
was estimated, it was applied to properties been used in several of their past modeling exercises.
that will, in the future, benefit from ARC. For instance, the value of avoiding a transfer is estimated to be worth 5.3 minute-
The study examined and answered these equivalents; unless the transfer is simply across the platform, in which case it is 2 minute-
three questions: equivalents. A similar minute-equivalent estimate was included to reflect the frequency of
service in the morning peak period. (For a detail description of this methodology, please refer
➜➜ How did travel improvements from the to Appendix B.)
three built projects affect home values,
on average? 15 min 15 min 1 35 min Total
wait time + travel time + platform
transfer
+ travel time = trip
➜➜ What was the cumulative gain in value
from these three projects, and how did
these gains translate into property tax
revenues for municipalities?
The ARC Effect: How better transit 6 boosts home values and local economies
How did travel improvements from ➜➜ Transit access characteristics: Accounting for all of the above
NJ TRANSIT’s three built projects • Distance from the nearest train sta- characteristics, the average increase in home
affect home values, on average? tion by road sale prices that can be attributed to reduced
• Whether bus service was competitive travel times to Midtown is $23,000 for all
This study relied on a multiple regression to Midtown Manhattan with rail at homes within two miles of stations, or 5%
analysis of home sales within two miles time of sale of the median property value in the area.
of stations (by road) and 70 minute- • The travel time improvement to Homes within walking distance of the
equivalent train commutes (see box on Midtown Manhattan after Mid- station (one half-mile) gained $34,000 in
page 6 for definition) to Midtown after the town Direct, Montclair Connection value, or 7.5% of the median sales value.
improvements, sold between 3.5 years before and Secaucus Junction, in minute- (These results assume an average travel
the improvement and 5.5 years after the equivalents, a composite variable improvement of 12 minute-equivalents, and
travel improvement occurred, as recorded that includes scheduled travel times a median home value of $451,000.)
by the New Jersey Multiple Listing Service to either Penn Station-NY or the
and the Garden State Multiple Listing 33rd Street PATH station, a penalty Average increase in
Service. The regression included a total of for train transfers, and a penalty for Distance from home values per minute
the station reduction in trip times
45,000 sales, and each was assigned to its infrequent service (see box for a full
closest train station and that station’s travel description of minute-equivalents) 0 to 2 miles $1,959
improvement. 0 to 0.5 miles $2,902
Multiple regression analysis is ➜➜ Economic characteristics:
based on the premise that the price of • Year of sale, a variable that accounts 0.5 to 1 mile $1,931
a house represents the value of a set for overall changes in the real estate 1 to 1.5 miles $1,310
of characteristics, such as number of market
bedrooms, quality of the school district and 1.5 to 2 miles $882
access to transit. Since these characteristics (For more specifics about the methodology or the
can be produced in various combinations, variables, please refer to Appendix B.)
the value of each independent characteristic
can be estimated. In this study, the
characteristic of interest is trip-time
improvement at the property’s assigned
station. In other words, of all the Homes near train stations significantly gained in value after Midtown Direct, Mont-
characteristics that make up the value of clair Connection and Secaucus Junction – an average of $23,000 per home, with
a home, what was the value of a commute the highest gains closest to the stations
to Manhattan made shorter by Midtown
Direct, Montclair Connection or Secaucus
Junction? $10,286 (2.3%)
The model used in this study includes
the sale price of the property in 2009 dollars
as the dependent variable, as well as the $15,287 (3.4%)
following explanatory variables:
➜➜ Property characteristics:
$22,524 (5.0%)
• Number of bedrooms
• Number of full bathrooms $33,852 (7.5% of median sale price)
• Number of fireplaces
• Garage capacity
• Whether the home was of a desir- .5
able architectural style (Victorian,
Colonial or Tudor) 1
1.5
➜➜ Community characteristics:
• Quality of the school district, i.e. the 2 mi.
share of students who are proficient
in math and language, per Depart-
ment of Education statistics
• Density of the road network around
the station Median sale price (FY09 dollars): $451,000
Average trip-time improvement: 12 minutes
Price increase over 9 years
The ARC Effect: How better transit 7 boosts home values and local economies
What was the cumulative
gain in value from these three
Mo-Bo to MSU
M&E to Dover
Average gains in property values for each Time savings generated by Midtown
M/B/PJ
station area were estimated based on each Direct, Montclair Connection and
NEC
RV
PV
station’s service improvement from the Secaucus Junction (in minute-equivalents)
three projects. These average gains were then Improvement in scheduled trip times 10 10 12 9 12 9 0 0 0 0
multiplied by the number of homes within
each half-mile distance band of each station. Faster travel time to 33rd Street/PSNY 8 8 8 4 8 8
on NJT than on PATH
Cumulatively, the value of all homes within
Transfer at Secaucus instead of Hoboken
two miles of all train stations that benefited 2 2
(walk time)
from the projects is estimated to be $11.1 No more transfer at Hoboken 4 4 4 4
billion (graduating the gains for stations (walk time, wait time)
farther than 70 minute-equivalents from New transfer from diesel line to electrified -3 -3
Midtown after the improvements). line (walk time, wait time)
At 2009 property tax levels, that Improvement in transfer penalty 0 0 5.3 3.3 5.3 3.3 0 0 0 0
represents an additional $250 million
Improvement in frequency penalty varies by station
a year in property tax revenue for all
municipalities affected, in both New Jersey
and New York.
Mo-Bo to MSU
M&E to Dover
station area were estimated based on
each station’s estimated future service
M/B/PJ
improvement from ARC. (These gains were Anticipated ime savings
NEC
RV
PV
graduated for stations that were located generated by ARC (in minute-equivalents)
more than 70 minute-equivalents from
Improvement in scheduled trip times 6 6 8 11 8 11 11 8 8 11
Midtown after ARC.) These estimated gains
in property values were then multiplied by Faster travel time crossing the Hudson
(less congestion, fewer trains stopping at 6 6 6 6 6 6 6 6
the number of homes within each half-mile Secaucus)
distance band of each station. No more transfer at Secaucus 4 4
Cumulatively, all homes within two (walk time, wait time)
miles of train stations along all lines that No more transfer at Newark 3
will benefit from ARC could gain $17.9 (walk time, wait time)
billion in value. At 2009 property tax No more transfer from diesel line 3 3 3
(walk time, wait time)
levels, that represents an additional $374
Crowding relief at PSNY/34th St terminal
million a year in property tax revenue for all (over no-build condition) 2 2 2 2 2 2 2 2 2 2
municipalities affected.
Improvement in transfer penalty 5.3 5.3 0 2 0 2 5.3 0 0 2
The average time savings from ARC
was calculated to be nearly 10 minutes, Improvement in frequency penalty varies by station
representing an average per-home increase
of $19,000 for homes within 2 miles of
stations less than 70 minutes away from
Midtown. Homes within one half-mile of
those stations could gain $29,000 in value.
The ARC Effect: How better transit 8 boosts home values and local economies
Implications of the time; today, ARC is NJ TRANSIT
and Metro-North’s lowest-hanging fruit.
Better train service increases local
and state tax bases, and will reduce
The ARC Effect: How better transit 9 boosts home values and local economies
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