Bill Requiring Developers Pay Fair Share for Transit Improvements Released

Today, the Senate Community and Urban Affairs Committee released S368 (Cryan/Weinberg). The bill permits municipalities to require developers to make contributions for mass transit improvements.

“This legislation is important because it will make sure developers pay their fair share of mass transit costs associated with new developments. New developments create more demand on mass transit systems, and create more traffic in the area. New Jersey is one of the most densely populated states in the country, and we have some of the worst air quality in the nation,” said Jeff Tittel, Director of the New Jersey Sierra Club. “Developers should be required to help offset the burden that their developments put on mass transit.”

New Jersey is the most densely populated state in the country, with 1,213 people per square mile. New Jersey has been waiting to see improvements for many different transportation routes. For example, the Hudson-Bergen Light Rail has been waiting over a decade for an extension in Bergen County. Other routes waiting for improvements and expansions include the Monmouth-Ocean-Middlesex (MOM) Line, the West Trenton Line, and the Northern Branch Corridor.

“Developers are getting a free ride. They are letting taxpayers pick up the tab for mass transit improvements associated with their developments. What’s even worse is that when developers build near mass transit, especially rail and light rail, their property values go up dramatically. They can sell housing units and rental properties at much higher rates, especially when they are next to new or improved transit systems. There are many transit lines that are waiting for improvements, like the Hudson-Bergen Light Rail Line, the Monmouth Ocean Middlesex Line, the SJ Line, and many more, that developers are already benefiting from,” said Jeff Tittel. “Some of the profit that these developers are benefiting from should be captured back to help pay for improvements to these bus, rail, and light rail systems.”

Some states and cities use Transportation Development Districts to help generate revenue to pay for the costs of transportation infrastructure improvements in and around new developments. Some cities use value-added tax (VAT) to help compensate for increased property values.

“This is a step in the right direction, but we need to do more. We should be expanding Transportation Development Districts, or TDDs, as a way to capture more funding based on enhanced property values. These TDDs help coordinate and finance transportation infrastructure improvements. We should also have a value-added tax, like in L.A., San Francisco, and other cities. These taxes assess a benefit based on the increase in property values for developments near transportation, and benefits for developing transit villages,” said Jeff Tittel, Director of the New Jersey Sierra Club. “This legislation will make sure developers pay their share for mass transit improvements near their properties. Commuters and taxpayers shouldn’t have to foot the bill.”