Light Rail Spurs Smart Growth and Property Values Skyrocket

November 3rd, 2008 by Jay Corbalis

The Hudson Bergen Light Rail Line—which runs through North Bergen, Union City, Weehawken, Hoboken, Jersey City and Bayonne—was opened by NJ Transit in 2000. It is 20.3 miles long and has 23 stops.

Ridership on the line has been growing steadily since its inception, from about 5,000 average daily weekday riders in 2000 to more than 40,000 today.

In the vicinity of five stations studied by Rutgers University’s Voorhees Transportation Center, the Hudson Bergen Light Rail Line was shown to have spurred the construction of more than 10,000 new housing units, valued conservatively at $5.3 billion.

New Transit Lines Are New Frontier

Sustained high gasoline prices and continued traffic congestion in and around the nation’s largest cities have prompted many Americans to once again consider public transit as a means of transportation. This interest has translated into a relative surge in ridership; according to the American Public Transportation Association, 2007 saw 10.3 billion trips taken by public transportation, the largest total in 50 years.

New Jersey was better positioned than most states to accommodate this heightened demand. In the past decade, in addition to operating one of the most extensive rail networks in the country, NJ Transit has opened two new light rail systems, the RiverLine and the Hudson Bergen Light Rail Line, and expanded a third, the Newark City Subway. This expansion has done more than just provide new transportation options for commuters; at least one of these lines, the Hudson Bergen Light Rail Line, has proven to be a catalyst for economic development in the communities it serves.

The Voorhees Transportation Center, an arm of the Bloustein School of Planning and Public Policy at Rutgers, conducted a study of five stations on the Hudson Bergen Line and found that a housing boom around those stations had added more than $5 billion in property value to the local tax base. While the quantity of this growth (more than 10,000 housing units) is impressive, the type of development these new units represent is also notable. The study found that “large quantities of underutilized land around rail stations are being reclaimed for productive use and being replaced by compact, pedestrian friendly, mixed-use developments.” In other words, the development spurred by the light rail line epitomizes the type of smart growth the state has been encouraging for urban areas.

Of course, not all of the development that has occurred along North Jersey’s “Gold Coast” is directly attributable to the Hudson Bergen Line. Regional economic forces, led primarily by strong job growth in the New York financial sector, were a major factor in the area’s renaissance. Still, it is unlikely that growth along the corridor would have been as strong in the absence of this major transportation investment. In Bayonne for example, the extension of the light rail line was cited as motivation for plans to construct 6,700 residential units, 1.5 million square feet of commercial space and 750 hotel rooms at the once-dormant Military Ocean Terminal site.

One of the key findings of the Voorhees report is that, as a result of the Hudson Bergen Line, property values have grown “exponentially.” This is an important lesson to consider as other proposals, such as the MOM line (through Monmouth, Ocean and Middlesex counties) and the PATCO extension (in Camden and Gloucester counties), are considered. In a state where developable land is becoming scarcer by the day, the experience of the Hudson Bergen Light Rail shows that new transit lines may just be the new frontier for sustainable growth in the state.

If you have any questions about this issue of Future Facts, please contact Jay Corbalis, Policy Analyst.