New buildings right near Metrorail stations are 23-30% more valuable than buildings farther away, showing that our funding partners can generate significant property tax revenues from Metro.
A recent study shows that Metrorail stations in Arlington’s Rosslyn-Ballston corridor are powerful anchors for economic development and value. The report, by the real estate firm Cushman & Wakefield, showcases the substantial value the region can realize with good transit-oriented development policies near stations. Among the report’s findings:
- Being able to walk to Metro is worth a lot. New office buildings within 500 feet of a station in Arlington’s Rosslyn-Ballston corridor are earning a 30% premium over buildings under construction just a quarter-mile away. For apartment buildings, the premium is 23%. No wonder walk access to Metrorail is on the rise, especially from those close by the station!
- 92% of over 20 million square feet of office space under construction in the Rosslyn-Ballston corridor is within a quarter mile of a Metrorail station.
- Conversely, new office buildings built farther than a quarter-mile from Metro are worth 18% less in rent.
These “rail premiums” of 23-30% are significantly higher than the 7-9% we found in our “Business Case for Transit” study, because of several significant differences in methodology. We looked at the assessed value, not the market/rental rate of property. Also, we looked at all properties in the region, rather than just those under construction in one corridor.
Although the presence of Metrorail creates this value premium near stations, Metro does not receive any of these revenues directly, even though continued rebuilding and improvements are needed to address state of good repair and relieve capacity issues in the corridor.
Nevertheless, this report certainly confirms that Metrorail increases property tax revenues, and shows just how big that value can be in certain markets.