Congestion pricing could boost home values
But outer-borough neighborhoods could take a hit
Not only will congestion pricing make driving in the city more expensive, but it may raise the prices of homes, too.
Research suggests the move — which was aimed at easing traffic and raising revenue for the subway system — may boost residential real estate values in the pricing zone, the Wall Street Journal reported.
“You would expect house prices to increase because you have much less traffic around your house after the congestion charge,” said Cheng Keat Tang, a postdoctoral researcher at the University of Southern California.
In a working paper published last year, Tang examined the effect of London’s congestion pricing plan (which went into effect in 2003) on traffic and residential real estate prices. The research found that that congestion pricing raised the home values in the zone by 3 percent, which, Tang said, equates to “a windfall of more than £10 billion [$13 billion] for homeowners.”
Mark Chin, managing director of Keller Williams Tribeca, said he expected housing prices in outer-borough neighborhoods with poor public-transit access to take a hit because residents will face higher commuting costs. Plus, the expected increased traffic could depress prices in areas just outside the zone.
“If I were looking at real estate in the 60s, I would be thinking [the pricing plan] could have a slightly negative impact,” he said.
Meanwhile, commercial real estate may see a dip. Per a 2015 study, Singapore’s congestion pricing led to a 19 percent decline in retail real estate within the pricing zone. Researchers found the charge at “no significant impact” on residential real estate. [WSJ] — Meenal Vamburkar