Chairman Degnan. Director Foye. Commissioners. Last month I spoke about the economic impact of a linear park across the GWB.(1) Today, I will discuss how a GWB bike path could enhance municipal property tax revenues.
A bike path is an amenity, like a subway or a park, whose impact on the city can be profound. In what may comprise a “perfect storm,” homes associated with the construction of the High Line appreciated so dramatically that the City recouped nearly all of its $115 million investment in a single year. (2)
But before valuing the impact of a GWB bike path, let’s look at the grid it connects to.
- NYC’s Independent Budget Office estimates total property tax revenues in Fiscal 2015 to be $22.4 billion.
- So the bike grid impacts valuation on properties generating some $3.8 billion in annual tax revenues. (4)
– Studies from across the U.S. positively correlate proximity to a bike path to an increase in home prices and tax assessments: from 4% across Delaware and 11% in Indianapolis to as high as 23% in parts of Chicago.
– If we assign the NYC bike grid a conservative “Delaware” multiple, its imputed share of annual tax revenues would be $150 million. (5)
A robust extension of the NYC grid into NJ could stimulate even more revenues as there are no facilities within the city not shared with pedestrians and roads heading toward Westchester and Nassau Counties are highly trafficked.
If we impute the value of the GWB’s increment to be as little as half a percent, that’s another $19 million per year in tax revenues. (6) (7)
But this gain will only be realized if North Path is built out to support growing demand, not if it is simply restored as a sidewalk.
(1) 289,000 new visitors per year. Daily average spending, $94.26. New annual spending $27 million, with multipliers $42 million. New jobs created 511, with multipliers 675. – Linear Park
(2) “I estimate the impact of opening the High Line Park in June 2009 … and which draws almost 5 million visitors annually. Home values within one-third of a mile of the park increased 10% immediately following its opening.
This was not simply an overall increase in valuation of parks, or of real estate near the west side of Manhattan, but was directly due to the new public good, the park, itself. The increases in home valuations led to property taxes collected by the city in 2010 alone to nearly surpass the cost of constructing the park itself, suggesting that the benefits far outweighed the costs.
New businesses also opened in the surrounding areas in response to the opening of the park, implying that only measuring property values underestimates the broader effects on the economy.”
– The High Line Park and Timing of Capitalization of Public Goods by Michael Levere
(3) 1012 miles divided by 6074 miles = .17
(4) $22.4 billion times .17 = $3.8 billion
(5) $22.4 billion times .17 times .04 = $152.3 million
(6) $22.4 billion times .17 times .045 = $171.4 million
(7) $171.4 million minus $152.3 million = $19.1 million