“New York could raise billions of dollars for the proposed IBX by taxing the increase in property values from the new rail line.”
An article in New York City’s Streetsblog pro-transit newsletter highlights the existing legal possibility of using a Land Value Tax to pay for a new surface light rail project in Brooklyn:
“New York City could pay for the completion of the Interborough Express by itself if its leaders are willing to take a piece of the higher property values that the transit expansion will bring, and put that money back into the IBX.”
The article doesn’t just casually mention the solution, it goes into detail about three ways it can legally be implemented, what will happen to property values to allow LVT – in one variant called Tax Increment Financing – that could pay for the IBX over time:
“A TIF has never been used in New York City to pay for a subway expansion, but former Mayor Mike Bloomberg implemented a TIF-like scheme to pay for the 7 train’s new terminal in Hudson Yards. Bloomberg allowed developers to make “payments in lieu of taxes,” which are payments from property owners to the city at a discount rate from usual property tax payments, which were used to repay loans the city took out to build the subway extension.
The 2016 value capture law also allows the city to help fund new transit by creating additional property taxes that don’t siphon any money away from the general fund. One of these is a tax on the increased value of the property on land near a transit expansion. The other, called a land value tax, is a tax on the increased value of the underlying land itself near a transit expansion.
Here’s how it works: New public transit service in a neighborhood boosts nearby property values, since the infrastructure creates more easy opportunities for residents to reach more of the city, and for businesses to attract more customers. That’s true even in an area where property values are already high. On the Upper East Side, economists found that the opening of the Second Avenue subway raised property values by 8 percent, which in raw terms came out to an astounding $5.5 billion.”
Read the rest here: https://nyc.streetsblog.org/2026/08/04/by-george-value-capture-ibx