Transit Revitalization Investment District Push/Pull Economic Development and Recapture Model

Each of the districts will have a scenario similar to the one outlined below which will provide for rapid appreciation to homeowners by bringing the rail service to Phoenixville. 

Three station areas will be created with the reintroduction of passenger rail service along the Norfolk Southern/SEPTA Phoenixville/Philadelphia transportation corridor. Each area will have a separate economic development plan but will be presented as a contiguous economic development package, connected by the rail line creating a multi-county Transit Revitalization Investment District (TRID).

The TRID project will be financed through the creation of value capture districts which are within a ¾ mile radius of the station.  A value capture district would encumber a portion of the property tax dollar increment on selected new development.  Property tax would be defined as Municipal, County and School District taxes.  The existing taxes would remain, but a portion of the increment or increase on selected parcels in the tax base, would define the value capture in the project. The parcels designated for value capture for funding the project are colored pink, the parcels designated for value appreciation, with existing taxes retained by the taxing bodies, are colored green. The entire district will be designated but only a few properties will be scheduled for the increment value capture.  The vast amounts of properties located in the district will be targeted for appreciation to benefit the homeowner..

In creating the TRID value capture district, normally all of the properties in the TRID area would be looked at for value capture. A rail expansion project has different priorities than areas with existing rail service.  This expansion projects seek to provide rail service through large scale economic development value capture making the transit expansion the outcome of the economic development project. While an existing station investment district seeks to garner value appreciation to invest within the district to revitalize the community which brings about an economic development outcome from the existing transit location.  Much of the work completed under the second scenario would be public works type projects.  

In 2018 SEPTA commissioned a study to measure the impact of rail stations on property values in Bucks, Chester, Delaware and Montgomery Counties.  Across all four counties the average property value premium within a three-mile area of the station was $19,400 per transaction in selected communities with over 100 parking spaces and higher levels of service. The value premium in Chester County is $13,500 as Chester County has more limited transit service with only 32.7% of the homes being transit proximate homes compared to Bucks 57%, Montgomery 64%, and Delaware 89% transit proximate homes. Comparisons for payback will use the lesser dollar value.  The study identified in Chester County that the average transit proximate house in Paoli is worth $69,400 more and in Thorndale a transit proximate house is worth $46,600 more than houses that are not proximate.

The ¾ area surrounding the new stations will create immediate appreciation in property values when sold.  When these properties are sold or redeveloped they will act as a mitigating factor to the value recapture properties identified in the TRID plan (Green Area). The appreciation increase, as referenced in the study will apply to a three-mile area surrounding the station. For purposes of the recapture illustration the lowest value $13,500 will be used and the smallest measurable area (3/4 mile) will be used to calculate homeowner recapture to provide a conservative number.

The selected parcels that will represent large investments in the ¾ mile transit area will have the tax dollars pulled from the district to pay for the transit capital costs.  Other properties located in the district will be pushed for housing market development and improvements which will complement the arrival of transit.  The effort to push development and real estate activity in the three-mile area surrounding the station will effectuate a new higher assessed value which will accelerate homeowner values and mitigate the tax dollars pulled from the district to fund the reintroduction of train service.