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Valuing Public Transit: The L-Train Shutdown

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  • Becka Brolinson

    (Federal Housing Finance Agency)

Abstract

In this paper, I quantify the value of access to public transit in New York using the surprise, hurricane-related announcement of the temporary shutdown of an important piece of transportation infrastructure: the L-train connecting Brooklyn and Manhattan. My approach allows me to measure changes in housing sales prices by using a change in public transit infrastructure that is (a) temporary, and (b) not an outcome of city transit planning, but rather an unexpected consequence of a natural disaster. I find that the L-train's shutdown announcement caused a temporary decrease in sales prices for affected housing units of 6.4 percent. This estimate suggests a monthly capitalization rate of public transit access of around $863 for housing units where the L-train is the nearest subway stop, demonstrating that households in New York City ascribe a high value to transit access. Using these estimates, the benefits of the repair outweigh the costs, with the benefit-to-cost ratio of the repairs ranging from 2.76 to 2.78.

Suggested Citation

  • Becka Brolinson, 2023. "Valuing Public Transit: The L-Train Shutdown," FHFA Staff Working Papers 23-06, Federal Housing Finance Agency.
    • Handle: RePEc:hfa:wpaper:23-06
    DOI: 10.1111/1540-6229.12488
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    References listed on IDEAS

    as
    1. Stephen Gibbons & Stephan Heblich & Ted Pinchbeck, 2018. "The spatial impacts of a massive rail disinvestment program: the Beeching axe," CEP Discussion Papers dp1563, Centre for Economic Performance, LSE.
    2. Sebastian Brandt & Wolfgang Maennig, 2012. "The impact of rail access on condominium prices in Hamburg," Transportation, Springer, vol. 39(5), pages 997-1017, September.
    3. Daniel P. McMillen & John McDonald, 2004. "Reaction of House Prices to a New Rapid Transit Line: Chicago's Midway Line, 1983–1999," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 32(3), pages 463-486, September.
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    More about this item

    Keywords

    transportation; house prices; natural disaster risk;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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