How developers near DC Metro stations could fill the beleaguered system's funding gap

Dive Brief:

Real estate development around Washington, DC, Metro stations totaled $50 billion last year, earning big profits for landowners, while the system itself faces hundreds of millions in unfunded operating costs and an estimated $12 billion to $18 billion in capital requirements over the next decade, The Washington Post reported.
Proposals for balancing the scales include a sales tax increase or a commercial property tax on developments near stations. Some onlookers, and even the Metro chairman, haven't discounted a federal takeover as a fix for the rail system's operational woes.
Despite declining ridership, system delays and maintenance issues, as well as security concerns, properties in walking distance to Metro stations continue to draw investment at a higher rate than those in driving distance to the rail.

Dive Insight:

Critics of plans to use some of the Metro-adjacent profits for system upgrades and expansions said it could end up stifling development around stations, potentially causing ridership to decline further. However, some developers are already offering to pay for system improvements as a way to boost their property values, acknowledging the importance of Metro upgrades.

The Metro's viability is not only of interest to riders and property developers along the existing system, but it is also a factor in the future of the $5.6 billion Purple Line light-rail project in DC's Maryland suburbs.

A local advocacy group in Chevy Chase, MD, sued to stop construction of the rail, and a federal judge revoked state and federal authorization for the project based on one of the group's arguments: a Metro ridership lower than Purple Line officials stated in their original environmental review. While the Purple Line is not a part of the Metro system, rail officials used that system's numbers as part of the Purple Line's projected ridership figures. The judge has ordered a second environmental review before deciding if the project can move forward.

Despite protests from Purple Line officials, the judge in the Maryland case is most likely trying to avoid future conflicts like those around the Dallas Area Rapid Transit system. The DART board approved two suburban extension lines last month — which could cost more than $2 billion — despite a Chicago transit study determination that the Dallas-area rail was the most underutilized of all systems in the review study and must be subsidized because of low ridership.