What is interesting is that I've been hearing more about the transfer tax and land taxes lately. While the transfer tax is basically a mechanism that taxes the transfer of property, a land tax would be a tax on the land for transit, not the buildings or improvements. It makes a lot of sense for transportation given that accessibility is one of the factors which improves land values. I was also shocked to read something that made a lot of sense from the Heartland Foundation (A conservative think tank home to our favorite Wendell Cox) on using a land tax for transit.
I'm wondering also if a land tax would be enough to pay for improvements on a specific line. So if improvements were made such as a light rail line, would the increase in revenue from a land tax in the area around the improvement be enough to offset the investment over time? It's certainly an idea worth exploring.
Only part of transit's benefit goes to those who pay fares. The whole community benefits from transit. Where do those benefits show up in the economy?
As dozens of studies across the globe have shown, the benefits of transit show up as increased land values. Land served by public transportation is worth more than land not served. The amount varies, of course, depending on the quality of service, type of development, general standard of living, etc., but the effect is large.
A study published in 1997 for RTA, "The Effect of CTA and Metra Stations on Residential Property Values," by Gruen Gruen & Associates, implies that just the existing rail system adds land value in excess of $1.6 billion a year.