As the MTA capital plan funding gap has come into focus, there’s been a lot of discussion about how new development can help pay for the transit service it requires. It turns out the city already has a tool that links real estate with transit improvements, but it’s so limited that it’s been used to fund transit upgrades only 10 times in more than three decades. For a more robust model, planners should look to San Francisco.
In 1982, the Department of City Planning created the “subway bonus,” which allows developers to construct buildings up to 20 percent larger than normally allowed. In exchange, the developer must pay for and install subway station improvements requested by the city.
The subway bonus only applies to sites adjacent to a subway station. At first, it only covered qualifying sites in Midtown. The program was expanded in 1984 to more of Manhattan and Downtown Brooklyn; in 1986, a slightly modified subway bonus was created for the Court Square area of Long Island City. In addition, the city requires developers atop future Second Avenue Subway stops to keep a public easement in new development for future station entrances.
Although tools to extract transit improvements from developers pop up sporadically in the city’s zoning code, only 10 projects have used the subway bonus program since it was first created in 1982, according to a DCP report [PDF]. The report also lists two completed projects and one proposal that offered subway improvements using other incentive programs.
Most of these projects brought upgrades like wider platforms, new or expanded walkways between stations, elevator installations, and redesigns to allow more natural light into subway stations, among other changes.
These projects might be familiar to regular subway users. The Lexington-53rd Street station, for example, received upgrades from office towers at 599 Lexington Avenue and the “Lipstick Building” on Third Avenue. In other locations, the developer of Zeckendorf Towers expanded the mezzanine at Union Square, new office buildings brought connections between platforms at the Court Square station, and the Hearst Building added stairs and elevators at the southern end of Columbus Circle.
The city is moving forward with a modified version of the subway bonus on Vanderbilt Avenue, where it is working with developer SL Green to swap increased density for a pedestrian plaza and station improvements beneath Grand Central Terminal.
While this handful of projects over the years have provided beneficial upgrades to the subway system, it’s hard to see them as anything more than spot improvements that occur only if a big new office building happens to be located on top of a subway station. New development a block away from the subway creates just as much demand for transit, but there’s no mechanism in the city’s zoning code to recapture the costs of providing that service. What’s missing is a more comprehensive value capture system.