Some people love it, others loathe it. But congestion pricing is coming to New York City, and, for better or for worse, it will likely affect the value of your home.
If you live in a co-op or condominium below 60th Street in Manhattan, you’re probably thrilled that congestion pricing is coming because it will ease traffic congestion in your neighborhood, improve air quality, and help fund subway upgrades. Now, according to the Wall Street Journal, there’s another reason to love congestion pricing: it will probably boost the value of your co-op or condo apartment.
“You would expect house prices to increase because you have much less traffic around your house after the congestion charge,” says Cheng Keat Tang, a postdoctoral researcher at the University of Southern California. In a working paper published last year, Tang examined the effect of London’s congestion pricing plan (which went into effect in 2003) on traffic and residential real estate prices. The research found that that congestion pricing raised the home values in the zone by 3 percent.
Of course one person’s good fortune is bad news for someone else. Mark Chin, managing director of the brokerage Keller Williams Tribeca, says he expected housing prices in outer-borough neighborhoods with poor public-transit access to take a hit because residents will face higher commuting costs. Plus, the expected increased traffic could depress prices in areas just outside the zone.
When the fees go into effect in 2021, New York will become the first American city to charge such fees, though congestion pricing has been in place for years in Stockholm, London, and Singapore, among other communities. Within a year of the fees being imposed in London, according to the New York Times, the number of vehicles entering an eight-square-mile restricted area dropped by 18 percent, and traffic delays went down 30 percent. Air quality improved, too, with a 12 percent reduction in emissions of nitrogen oxides and particulate matter from vehicles in the zone.
Though fees have not yet been set, a charge of about $10 for cars and $25 for trucks is now under discussion.
Thinking of buying a co-op or condo? Already bought, and not sure how co-op/condo life and rules work? Learn all about purchasing a place and living in your new community. It's not like renting, and its not like owning a house. What's it like?