PlanItMetro

Adding new Blue Line connections seeks to restore train frequencies  to every six minutes during the peak period between Pentagon and Rosslyn stations, resulting in less waiting time and crowding for Blue Line riders in Northern Virginia. Once the Silver Line opens, the Blue Line service will operate every 12-14 minutes as opposed to the previous six minutes. The feasibility analysis is currently underway and has identified two potential alternatives to create new connections:

• Alternative 1: Add rail track that would create a new connection between the Blue and Orange/Silver Lines, or
• Alternative 2: A second Rosslyn Station for a new Blue Line with an underground passageway to the existing Rosslyn station, which would connect to the Orange/Silver Lines with a pedestrian tunnel.

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Proximity to transit, especially high-quality, frequent, high-capacity rail, increases property values, attracts development and provides mobility choices. Property values are higher near Metro’s high-quality, high-frequency, high-capacity services, and deliver an incremental increase in total tax revenue to the Compact jurisdictions.

• Property taxes on land around Metrorail stations generate $3.1 billion annually in revenues to the jurisdictions.
• Of these revenues, $224 million is extra value that would not exist without Metro. This amount is equivalent to providing the following public services.

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In September 2012, MWCOG released Economy Forward, a call to action for a more competitive metropolitan Washington. This report called for strong centers with housing, jobs, and access to transit as a means to enhance the region’s competitiveness. Through monthly meetings with public and private nonprofit and academic leaders, it concluded that the transportation network is one of the five critical challenges in recruiting new business to the Washington region.  It also concluded that “without adequate funding, Metro and the region’s highways will become even more congested, which will hurt the region’s productivity and economic growth potential.”

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Metro does far more for the region than simply providing transportation. It also provides economic, social, and environmental benefits which contribute to the region’s health and vitality.

Making the Case for Transit (2011) found that without Metro and the regional transit system that it feeds:

• There would be one million more auto trips per day;
• Congestion would increase by 25 percent;
• All Potomac River crossings would need four to six additional lanes; and
• Downtown Washington would require 200,000 more parking spaces, which is the equivalent of 166 blocks of five-story garages, at a cost of at least $4 billion (2012), excluding land.

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This study measured transit's impact on congestion, roads, and parking in the Washington region.

One of the best ways to understand the value of something is to take it away, and measure the difference. So, as part of our “Business Case” for transit study, we tried taking away transit to see what happened to the Washington DC region, using MWCOG’s Regional Travel Demand Model. This model represents people’s origins and destinations, and all the different options for getting around, including detailed transit and highway capacity information. What does that model predict would happen without transit?

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To measure Metro's impact on land markets, we analyzed property value assessment records across the region. Shown above is a sample from the District of Columbia.

A Metrorail station can make the land surrounding the station much easier to get to and from. Especially if traffic is bad and parking is costly, as often happens in our region, a Metrorail station can offer a good alternative means of getting to and from an area, which gives the area near rail an advantage over areas farther from rail. Businesses can locate near a Metrorail station and reach workers around the region, more people can live in the neighborhood and get around by transit, and customers can shop or run errands there.  Economic theory tells us that the value of land around rail stations should reflect the value transit brings, as often does the density of development.  Economists would say that the accessibility value of transit is capitalized into the land value.

But what is this effect around Metrorail stations, and how much is it worth?  How much land value is associated with Metrorail, and how much property tax revenue does this generate for Metro’s jurisdictions?

To answer, we analyzed parcel-level property assessment values across the WMATA Compact jurisdiction as part of our “Business Case” for transit study.  We analyzed all properties, including residential, commercial, and federal office buildings.  The data show that:

• Metro enables value-creating activity: $235 billion of property value sits within a half-mile of Metrorail station
• About 80% of this value is from commercial properties (multi-family residential, office, retail, and other)
• 28% of the Compact Area‘s property tax base sits on 4% of its land within a half-mile of Metrorail
• The land within a half-mile of Metrorail stations generate $3.1 billion in property taxes per year for our funding partners

New York Avenue station has helped enable valuable development. Photo courtesy of NCPPP, click for context.

This does not mean that Metro caused all of this development, but it does show that Metro serves the value-creating parts of our region. Some of this development existed before Metrorail, and influenced the decision of where to build stations.  So, we ran a number of hedonic analyses (a statistical regression technique) to isolate the effect on property values uniquely from Metrorail proximity alone, or the “rail premium.”  After all, property values can be influenced by a variety of factors, including proximity to other infrastructure, desirability of the neighborhood, etc.  Controlling for all other factors, we found that within the Compact area:

• Metrorail boosts property values, adding 6.8% more value to residential, 9.4% to multi-family, and 8.9% to commercial office properties within a half-mile of a Metrorail station – all other things being equal
• Property becomes even more valuable as a property gets closer to Metro stations

Others have shown too that new Metrorail stations can attract and spur economic development, by tracing the history of development around stations, such as New York Avenue and the Rosslyn-Ballston corridor.

These findings show that Metro plays a significant role in our region’s land markets: not only is valuable development and economic activity clustered around Metrorail, but the benefits of Metrorail can be seen in actual property assessments.  Our regions’ land markets recognize and have responded to the value that Metro brings.  This helps make the case that Metro is vital to the region’s economy, and is a good investment of public funds.

Read the study’s Final Report (pdf).

Cross-posted at Region Forward.

Busy Metrorail station

Metro is wrapping up a study on the “business case” for transit that tries to answer the question, “how does the region benefit from Metro?”

The Purpose of the Study:  The goal of the project is to tell the story of Metro’s critical role in the development of the greater Washington region.  We undertook the study to identify all the ways that Metro impacts the broader regional economy, and measure those impacts in terms of real estate value, economic competitiveness, avoided roadway infrastructure, and others.

Why this Study? At WMATA’s 35th anniversary, and as we plan for the future, it’s important to understand what has happened since we decided to grow and sustain our transit system. Metro often measures our performance in short-term transportation terms – ridership, service frequency and reliability, and costs. And we will continue to do so. But transportation is not an end to itself, it is a means to an end. Metro impacts the region in much broader ways – changing the real estate market, altering people’s choices about where to live and work, and impacting our economic livelihood.  This study tries to shed light on those longer-term impacts as well.

In addition, Metro is frequently in the public sphere with regards to our costs: our operating budget, fares, or capital program.  As we talk about costs, it’s important to talk about the benefits we provide, too.

This study began with a long list of ways to measure transit benefits, and then narrowed to a subset of quantifiable results.

What the Study Is: We try to evaluate transit by imagining a region without transit, and measuring the differences from today. One of the best ways to understand the value of something is to take it away. A Washington without transit is, of course, a hypothetical situation. Without transit, the region would look very different  – but that difference is exactly the effect that this report tries to measure. By imagining the region without transit, it is possible to understand its role and value in the economy of the Washington area.

What the Study Is Not:  This study is not a formal cost-benefit analysis of Metro. It does not add up all the benefits and compare benefits to costs, because some of the measures of benefits overlap other measures. For example, we quantify the road infrastructure not needed because of transit, and also the amount of congestion avoided, but these are in large part mutually exclusive. Instead, we try to describe the benefits of Metro in as many ways possible, to give people an idea of the magnitude of Metro’s impact.

What Can We Take Credit For? The study quantifies benefits, but doesn’t claim that the result is entirely due to Metro alone.  For example, Arlington County highlights its economic success in the Rosslyn-Ballston corridor along the Orange Line, but transit is only one part of this success, along with zoning, development decisions, long-term policies, and other factors.  So, in this study we measure the benefits where transit is either a precondition for, or an integral part of, an impact.

Results: We’ll be publishing a few posts in this space shortly to explain the major findings of the study.  Stay tuned!  In the meantime, read the Final Report (pdf).

Cross-posted at Region Forward.

Image from Downtown DC BID

In our discussions about the costs of Metro, it’s worth stepping back and considering the regional benefits our transit system provides – beyond simply another way to get from Point A to Point B.  Against a backdrop of funding needs, a crucial question is, “how does the region benefit from continued funding of Metro?”

Since the WMATA Compact was signed in 1967, we have built a 106-mile heavy rail network, the bus and paratransit systems now cover 1,500 square miles, and together we  make around 1.2 million trips on the system every day.  Our choice to build and use transit has had broad impacts on the region: it has changed the way land is developed, where businesses choose to locate, how the economy grows, how families get around and settle in livable neighborhoods, how we impact the environment, and more. Read more…