Take the Q train: Value capture of public infrastructure projects

Arpit Gupta, Stijn Van Nieuwerburgh, Constantine Kontokosta

Research output: Contribution to journalArticlepeer-review


Transit infrastructure is a critical asset for economic activity yet costly to build in dense urban environments. We measure the benefit of the Second Avenue Subway extension in New York City, the most expensive urban transit infrastructure project in recent memory, by analyzing local real estate prices which capitalize the benefits of transit spillovers. We find 8% price increases, creating $5.5 billion in new property value. Using cell phone ping data, we document substantial reductions in commuting time especially among subway users, offering a plausible mechanism for the price gains. The increase in prices reflects both higher rents and lower risk. Infrastructure improvements lower the riskiness of real estate investments. Only 30% of the private value created by the subway is captured through higher property tax revenue, and is insufficient to cover the cost of the subway. Targeted property tax increases may help governments capture more of the value created, and serve as a useful funding tool.

Original languageEnglish (US)
Article number103422
JournalJournal of Urban Economics
StatePublished - May 2022


  • Commuting
  • House prices
  • Infrastructure finance
  • Public finance
  • Real estate
  • Urban transit
  • Value capture

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies


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