Ask any agent in New York what single factor helps to sell real estate and the subway will be near or at the top of the list. In a city where condos regularly top $2 million, the convenience of being close to transit ride can add or subtract hundreds of thousands of dollars. A Jan 29th NY Times article voiced the argument of New York’s Governor Cuomo, that the subway should benefit financially from the effect it has on property prices, adding $3.85 per square foot to the value of commercial property, according to NYU economists.
A Streeteasy survey, showing the best and worst neighborhood’s for subway access, underlined the importance of being located near to a transit hub. There was little surprise in many of their findings. Manhattan was the best connected borough and thus one of the priciest with glitzy neighborhoods downtown (Tribeca, Soho, Flatiron) and Midtown all close to transport. However, even neighborhoods with longer walking distances (0.3 miles for Battery Park City), are still up there in price compared to other boroughs because they abut areas that have plenty of underground access (Financial District).
Brooklyn, one of the fastest rising boroughs in the city, is well served downtown and around Prospect Park and the rapidly gentrifying neighborhoods or BedStuy and Crown Heights. However, out in South Brooklyn, near Mill Basin, it’s a case of catching a bus to the subway, as a three mile distance separates stops. House prices here are amongst the lowest in the borough.
Things get interesting in Queens where real estate prices have been dramatically influenced by the subway. The development and increasing prices around the overcrowded 7 Train in areas such as Long Island City, Sunnyside, Astoria, Woodside and Jackson Heights has been dramatic. The line through the heart of Midtown Manhattan and on to its most recent addition, the Hudson Yards stop at 34th St and 11th Avenue. A 2016 report from Ariel Property Advisors predicted continued growth that could replicate the L train’s dominance in hipster-fied Brooklyn, with Queens still considerably more affordable. Property owners looking to cash in on the boom and sell may do well to hold off until Hudson Yards is fully finished and up and running and a go to destination for jobs and entertainment in the city.
Elsewhere in Queens the redevelopment of LaGuardia Airport with an AirTrain Transportation from the Willets Point 7 train station will decrease travel times and further spur on the 7 Train’s gentrifying effect.
The advent of the 2nd Avenue subway station has also electrified development on the Upper East Side. With an extended Q line running through Yorkville, numerous rentals and condos are planned with existing buildings between First and Third Avenues noticing marked value hikes. With development and tertiary businesses sprouting, some sellers may want to hold off until the area is in full boom, though for buyers there only seems to be an upside to getting while the subway is still young and development is in progress.
Coupled with this is the East Side Access project, which will bring Long Island Road Service to the East Side of Manhattan. The rail line will link Queens to Grand Central Terminal. Expect completion around 2023.
With the NY subway system in financial crisis (it owes $40 billion) as real estate values around the city continue to soar, there is some logic behind Governor Cuomo’s proposal, known as value capture, which would tax properties close to subway. The same thing has been implemented in Hong Kong. Mayor De Blasio, however, is in opposition.
A Pratt Center study in 2013, quoted in the NY Times in December laid out the conundrum of commuting in stark relief: “Skyrocketing housing costs push low- and moderate-income families farther from Manhattan and the well-connected communities that surround it,” it said. For those involved in buying and selling real estate in New York, the rule is simple. A single Metro card subway ride may only cost $2.75 but its effect on real estate is priceless.