The Real Deal New York

Brooklyn-Queens streetcar could raise values of adjacent properties by 3.5%: study

City’s assessment of real-estate backed study shows property tax windfall of up to $3B

April 25, 2016 04:23PM
By Rich Bockmann

Jed Walentas and Helena Durst with a rendering of the Brooklyn Queens streetcar

Jed Walentas and Helena Durst with a rendering of the Brooklyn Queens streetcar

Owners of property along the path of the planned Brooklyn-Queens street car could see a major boost to their bottom line. A city analysis of a real estate study claims the streetcar could directly result in a 5 percent increase in development along its tracks, and new projects from Sunset Park to Astoria could see a 3.5 percent increase in value.

Over a 40-year period, the new streetcar could fill the city’s coffers with as much as $3 billion in new property tax revenues, the analysis states.

The city published what it calls a “rapid assessment” of the 2015 feasibility study of a 16-mile route with 30 stops that was commissioned by the Friends of the BQX, a group that includes Doug Steiner, Helena Durst, Jed Walentas and investor Fred Wilson of Union Square Ventures.

Though the original study estimated the total project to cost $1.7 billion and annual operating costs to hit $26 million, the city’s new assessment pushes those numbers up to $2.5 billion and $31.5 million, respectively.

“The streetcar line would serve 45,000-50,000 daily riders resulting in over $26 million in annual fare revenues,” the city’s study read. “The $2.5 billion cost was determined to be reasonably covered through value creation and capture.”

Mayor Bill de Blasio unveiled his proposal to build the streetcar at his State of the City address in February, projecting an estimated 15.8 million straphangers would traverse its route each year by 2035.

As for growth in the corridor, the city’s newest study projects Brooklyn’s population “to increase rapidly” at 2.25 percent, while Queens will experience a more modest growth of 1.8 percent.

And when it comes to the streetcar’s impact on development, the city calculates a “transit premium” of 2 percent to 3.5 percent in value for new projects, and a five percent increase in square footage after the final plans are announced. Property taxes, as a result, could increase from $2.4 billion to $3 billion over a 40-year period.

The administration is considering the possibility of building the line in phases, and has set out a timeline that starts this year with neighborhood outreach sessions. Construction is slated to kick off in 2019, with operations starting by 2024.

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