Valuing public transit: The L‐train shutdown

Abstract

In this article, I quantify the value of access to public transit in New York using the surprise, hurricane‐related announcement of the temporary shutdown of an important piece of transportation infrastructure: the L‐train connecting Brooklyn and Manhattan. My approach allows me to measure changes in housing sales prices by using a change in public transit infrastructure, that is, (a) temporary, and (b) not an outcome of city transit planning, but rather an unexpected consequence of a natural disaster. I find that the L‐train's shutdown announcement caused a temporary decrease in sales prices for affected housing units of 6.4%. This estimate suggests a monthly capitalization rate of public transit access of around $863 for housing units where the L‐train is the nearest subway stop, demonstrating that households in NYC ascribe a high value to transit access. Using these estimates, the benefits of the repair outweigh the costs, with the benefit‐to‐cost ratio of the repairs ranging from 2.76 to 2.78.