Gov. Andrew Cuomo’s value-capture plan to charge real estate owners for the benefits they receive from new transit projects is gaining momentum, but still faces some serious questions regarding how it would be implemented.
The proposal, which would require approval from the legislature, would assess property values in neighborhoods where a new transportation project raises property values, both before and after the project is completed, the New York Times reported.
A new tax would be levied on the difference, with 75 percent going to the transit agency and 25 percent to the city.
But the plan once again pits Cuomo against Mayor Bill de Blasio, whose office said state officials have not discussed the proposal with the city.
“This is not the way to address the problems of the M.T.A.,” first deputy mayor Dean Fuleihan said.
Real Estate Board of New York senior vice president of research Michael Slattery said the proposal “raises serious questions that need to be evaluated, especially when it deals with a property tax system that we already know has serious problems.”
An existing four-person panel – one of whom is appointed to represent the city – would review projects and have the power to veto proposals. Metropolitan Transportation Authority chairman Joseph Lhota said the pane would work under what he calls “U.N. Security Council rules,” where one opposing member would be able to veto the proposal.
The idea does have plenty of backers, though, such as RXR Realty’s Scott Rechler, who recently said his company should “pay more of a proportion of that cost” for projects that benefit his buildings.
And two New York University economists say that the benefit of being near a subway adds $3.85 a square foot to the value of commercial property in Manhattan’s main business corridors. [NYT] – Rich Bockmann