Developers love transportation, or whatever else Washington calls "free money" this year. Yesterday I saw a ballroomful of New York real estate players cascade applause when federal Transportation Secretary Ray LaHood promised a range of incentives and programs to "get people out of their cars." Granted, real estate types have heard rather too few applause lines in recent months. But this liplock between development and transit is as vital as it is real. See, properties can gain value over the medium to long term if prospective tenants can easily get to them, get away from them, and use them as bases in their mobile lives. And the Obama administration is boosting this philosophy with serious capital. HUD grants, as I'll write more about this summer, will privilege projects near public transit. And the tax code will stoke more big transit investment in big cities. To take one marginal example, look to page 82 of a document the Treasury Department released on Monday.
There you'll find a proposal to scrap tax incentives to private developers in Lower Manhattan and allocate $200m per year over the next decade for transit investments around the World Trade Center site. $2 billion is a nice round figure, roughly the shortfall facing Moynihan Station and probably a useful plug at Ground Zero. But this reflects a policy that transcends Gotham development delays. This administration- and probably its corollary Congressfolk looking to deliver jobs and cut ribbons- believes the growth zones in our country are at transit hubs and not in ranch-house tracts. If you see a developer singing the praises of the local trolley, follow that developer.