Friday, September 10, 2010

Eliminated bus service dooms million dollar apartments

The Wall Street Journal reports that recent cuts to bus service by the New York MTA have adversely affected home sales and prices. From the story:
Real-estate data compiled by StreetEasy.com show a dropoff in sales in some neighborhoods along the bus routes since they ended this summer. In Kensington and Ditmas Park, Brooklyn, where condo buildings along Coney Island Avenue and Ocean Parkway can be a half-mile walk from the nearest subway, the X29 stops on Coney Island Avenue could mean a quick ride into Manhattan. That bus was cut. The number of home sales dropped 60% in Kensington and 83% in Ditmas Park between July 2009 and June, when bus service ended, but that is likely due to a spike in June when the first-time home-buyer tax credit expired.
And:

Aaron Donovan, an MTA spokesman, said the impact on property values isn't something the agency takes into account when proposing service cuts.

"We look at ridership, we look at the cost of service, we look at the availability of alternatives," he said.

But one more inconvenience, in an outside-Manhattan neighborhood where the commuting options are perhaps already imperfect, will drag prices down, experts said. Sofia Song, the vice president for research at StreetEasy, said transit cuts in general are unlikely to affect the volume of sales—though they could bring down prices.

"I think the changes would need to be pretty drastic, because demand for housing is so high. If you make it more affordable and less convenient, there's still always going to be demand," Ms. Song said.

Joan Di Marco, 61 years old, who owns a house on 21st Street in Astoria, said she is concerned about the impact the bus cuts will have on property values in her neighborhood—especially with a slew of luxury condo buildings going up.

"I'm sure people thinking of moving into the area will see these overcrowded [local] buses, and it's going to be a turnoff," said Ms. Di Marco, who took the QM22 for 20 years and now takes local buses or cabs to her job in Manhattan.

I'm not sure that transit agencies should be so cavalier about declining property values when service is cut considering that increased property values from transit access are often considered part of the benefits realized from transit investment. It follows that lower property values should then be part of the cost of disinvestment.
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