• Land Value and the NYC Subway System

    Does the underground affect the ground?

There are many factors involved in the valuation of land, and infrastructure plays an important role in this process. For the purpose of this study, we have identified two types of infrastructure: hard infrastructure and soft infrastructure. Hard infrastructure includes physical features such as roads, bridges, subways, tunnels, parks etc. Soft infrastructure features security (e.g. police stations), cultural and recreational centers, schools, fire departments etc. Economists have long argued for the existence of a causal link between public spending on infrastructure and land values. Using data collected by New York City’s Finance Department, the present study aims at examining this relationship.

– Lots next to Station – Lots 0.25 miles from Station | Click on station and hover over lines to view values

Click each column to sort by alphabetical order or value. A darker shade of red or blue signifies a higher value.

– Lots next to Station – Lots 0.25 miles from Station | Click on station and hover over lines to view values

Click each column to sort by alphabetical order or value. A darker shade of red or blue signifies a higher value.

– Lots next to Station – Lots 0.25 miles from Station | Click on station and hover over lines to view values

Click each column to sort by alphabetical order or value. A darker shade of red or blue signifies a higher value.

– Lots next to Station – Lots 0.25 miles from Station | Click on station and hover over lines to view values

Click each column to sort by alphabetical order or value. A darker shade of red or blue signifies a higher value.

– Lots next to Station – Lots 0.25 miles from Station | Click on station and hover over lines to view values

Click each column to sort by alphabetical order or value. A darker shade of red or blue signifies a higher value.

Hypothesis: One of the most known “landmarks” of New York City is its subway system. Since its creation, it has provided transportation services for many residents who use it exclusively as their primary method of transportation within the city. This study posits that the existence of a subway system adds value to land in NYC and that land located near a subway station would fetch a higher market value than land that is far from the station, assuming that other infrastructure such as security is also present. 

Scope of the Study: The subway lines that are analyzed in this study are: 1, 7, G, N, and L. The average land value per square foot was found for every station on each line. These lines were chosen because of the geography they cover.

Data sources: Property Valuation and Assessment Data Tax Classes 1,2,3,4 https://data.cityofnewyork.us/City-Government/Property-Valuation-and-Assessment-Data-Tax-Classes/8y4t-faws/data

Text Maps for Subway Lines https://new.mta.info/maps/subway-line-maps

Google Maps https://maps.google.com

Digital Tax Map – New York City Department of Finance http://gis.nyc.gov/taxmap/map.htm

Methodology: When calculating land value data for land near subway stations, we looked at 8-10 lots around the subway station. First, we used Google Maps to find the location of each station. Then we used the NYC Digital Tax Map to find the appropriate lot and block numbers. With the necessary lot and block numbers, we were able to retrieve the land value of each lot using the PYMKTLAND (“Market assessed land value”) filter from 2020 from the NYC valuation and assessment database. Once the data for all of the plots was found, an average was found, thus creating an average value per square foot of land.

When calculating land value data for land 0.25 miles away from subway stations, we looked at 3-4 lots from each cardinal direction (north, south, east, west). The same filters and methodology were used as when calculating average land value for lots near subway stations. By using lots from all four cardinal directions, we ensure that no one direction weighs more heavily than another on the average value.

Disclaimers: The land value data provided by the NYC Department of Finance is compiled for valuation and taxation purposes. Thus, it is not the most recent data available. The PYMKTLND (“Market assessed land value”) filter that we used is NOT based on (previous) sale price.

The 0.25 mile radius was chosen because of the condensed nature of the NYC subway system.  If a larger distance were chosen, the plots of land would overlap with other subway stations. Another problem that would arise is running out of land (hitting water) when choosing plots of land that are farther than 0.25 miles from a chosen subway station.

This case study is not intended to be extremely accurate. It is meant to show general trends. 

Results/Statistical Analysis:

Using statistical analysis, we were able to find the following results for each line regarding whether subway stations had an influence on land value:

1 Line – Using d = 0.05, since p < d , we reject H0 at the d = 0.05 level . This is good evidence that the mean increase in all Iand values that are nearby 1 line subway stations compared to the land values of plots that are 0.25 miles away is greater than 0. In other words, this evidence supports the idea that adjacent lands to 1 line subway stations are more valuable than their 0.25 mile radius counterparts.

7 Line – Using d = 0.05, since p < d , we reject H0 at the d = 0.05 Level . This is good evidence that the mean increase in all Iand values that are nearby 7 line subway stations compared to the land values of plots that are 0.25 miles away is greater than 0. In other words, this evidence supports the idea that adjacent lands to 7 line Subway Stations are more valuable than their 0.25 mile radius counterparts.

G Line – Using d = 0.10 , since p > d , we fail to reject H0 at the d = 0.10 leveI. This is not good evidence that the mean increase in alt I and values that are rearby G line subway stations compared to the land values of plots that are 0.25 miles away is greater than 0. In other words, based on this , we cannot confirm that adjacent lands to G line Subway Stations are more valuable than their 0.25 mile radius counterparts.

N Line –  Using d= 0.10 , since p < d , we reject H0 at the d = 0.10 Level . This is good evidence that the mean increase in all Iand values that are nearby N line subway stations compared to the land values of plots that are 0.25 miles away is greater than 0. In other words, this evidence supports the idea that adjacent lands to N line Subway Stations are more valuable than their 0.25 mile radius counterparts.

L Line – Using d= 0.05, since p < d , we reject Ho at the d= 0.05 level . This is good evidence that the mean increase in all land values that are 0.25 miles away from L-line compared to the land values of plots that are nearby the stations is greater than 0. In other words, this evidence support the idea that adjacent lands to L line Subway Stations are LESS valuable than their 0.25 mile radius counterparts. Factors that influence land value: There are many factors that influence land value. Some of these are: Location, interest rates, market optimism, demand, supply, level of preparation for buildings, land characteristics, accessibility, expected use of land, existing structures, teardown costs.

Conclusions: While in most cases land that was closer to subway stations was more valuable than land farther away, there were some cases where this was not true. This may be attributed to the influence of hard and soft infrastructure. Where the latter was true, other infrastructure existed that pushed the land value up.

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