The transit blogosphere has been falling over itself with excitement since yesterday about Bloomberg’s proposal to extend the No. 7 train into New Jersey, and I have to agree that it sounds like a very good plan. It would be much cheaper than the recently-axed ARC project and wouldn’t involve a mile-deep, dead-end station. But best of all, it would reward areas like the far West Side, Queens, and North Jersey cities which have opened themselves up to development and allow the density necessary for mass transit to at least pretend to be self-sustainable – something that the commuter rail-centric New Jersey suburbs have been loathe to do.
Despite the project’s reduced cost ($5.3 billion), it will apparently not be eligible for the $3 billion in federal funds that Chris Christie forfeited when he canceled the ARC project, so funding is the main stumbling block at this point. The Times also cites “the lengthy environmental review required of such projects” as an obstacle.
My suggestion is that West Side developers or tenants, along with those in the benefiting parts of Queens and New Jersey, should pay for at least some of the cost. Mass transit, especially in metro New York, has huge positive externalities for real estate, and West Side developers are already salivating at the prospect. Back around the turn of the last century, when transit lines in America were still built and operated by private companies, developers themselves would internalize these externalities by directly controlling the real estate around their stations. While this model still works in East Asia, it would be hard to imagine such flexibility in New York any time soon, but a well-designed tax increment financing system could come close. Under such a plan, a tax would only be levied on the areas that will directly benefit from the project. The highest burden should obviously fall on the far West Side, with money also being collected in the areas around the new North Jersey stops and in Long Island City, Queens, which would gain a one-seat ride into North Jersey.
Given the huge boost the project would give to development deals across even already-built sections of the 7 train, it seems reasonable to ask developers, residents, and tenants to shoulder at least some of the costs of a No. 7 extension. Stephen Ross, whose Related Development won the contract for the lucrative Hudson Yards development (worth $15 billion, or three times the cost of the proposed subway expansion), has already been gifted with a new No. 7 station at 11th Ave. and 34th St. – the least he can do is give the city a little bit of money to give his new development a direct line into New Jersey. Savvy developers will never pony up what they think they can get for free, though, so Bloomberg should make it clear that the project will only go forward if beneficiaries are ready to pay up.