WRN Proposes Innovative Strategy To Fund New York Avenue Metro by Cheryl Cort, WRN President With the groundbreaking for the New York Avenue Metro this past Saturday, the District has an excellent opportunity to adopt an innovative strategy to help fund the station’s $84 million design and construction. Some of the nearby property owners have offered to contribute $25 million toward this effort, but what form this will take is undecided. WRN’s strategy would base the private sector contribution on land value rather than total property value (land plus buildings), square footage, distance, or some other measure. It makes sense that those who benefit the most from this investment should pay the most. Indeed, owners of land closest to a station entrance will be able to charge much higher rents and prices for their property than will owners further away. Because the benefit to each owner is best reflected in the value of his or her land, an equitable way to collect the property owner contribution is through a user fee based on land value. On the other hand, if fees are based on total property value (land plus buildings), those who construct and maintain buildings (thereby providing housing and jobs near Metro) will shoulder more of the burden, because their property values are significantly higher than that of owners of vacant lots. A fee based on land value alone makes sure that owners of vacant lots pay their fair share. It also ensures that those who benefit the most, namely property owners in close proximity to the station, pay in proportion to the benefit they receive. In addition to the equity issue, basing the private sector contribution on land value alone is also more efficient at achieving the goals of building the Metro station in the first place. These goals include revitalizing an existing neighborhood (rather than continued low-density sprawl across the countryside), and providing better pedestrian, bicycle, and transit access in an area that already suffers from traffic congestion. Because a land value approach does not impose any fee on building value, it is less expensive to renovate, construct, and maintain buildings. This facilitates development near the Metro. Legislation is currently being drafted to determine the size of the special business district and the basis on which fees will be charged to each landowner. Some landowners suggested that their Metro contribution could be deducted from future taxes. This would transfer the cost of their contribution back on the taxpayers citywide. WRN hopes the Mayor and Council resist this because this is unfair. The landowner’s contributions are investments in their properties which will be repaid many times over in the marketplace. We also hope city leaders support the land value approach as a fair and efficient technique that promotes development where it belongs: in walkable neighborhoods near transit.