The Real Estate Board of New York to Joint Legislative Public Hearing on 2025 Executive Budget Proposal: Transportation

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The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association. Founded in 1896, REBNY represents commercial, residential, and institutional property owners, builders, managers, investors, brokers, salespeople and other organizations and individuals active in New York City real estate. Thank you for the opportunity to testify on the importance of the Metropolitan Transportation Authority’s (MTA) 2025-2029 capital plan.

The MTA is the lifeblood of the New York City metro region and its wellbeing is vital to the city’s real estate industry. For this reason, REBNY supports the MTA’s capital plan and appreciates its particular focus on investments that rebuild, repair, and improve the existing system. These investments include purchasing new railcars, updating signals, modernizing train shops and yards, and rebuilding outdated infrastructure. Should the capital program be fully funded and implemented, REBNY encourages the MTA to prioritize critical state of good repair investments and make every effort to improve efficiencies so these priorities can be achieved.

The capital plan cannot be put into effect unless adequate funds are provided. Policymakers should seek to identify funding sources that balance several competing priorities. These priorities are as follows:

First, funding should be designed to minimize the impact on the economy. While new revenue sources will be needed, these funding sources should not overly burden one sector of the economy and should be mindful that New York is already a very high-cost place to do business. Funding should continue to reflect the balance of interests that benefit from the MTA and should include revenue from vehicles.

Second, funding sources should be equitably distributed across communities that benefit from access to the MTA’s systems. In recent years, new revenue for the MTA has been primarily taken from New York City rather than throughout the 12-county MTA region. Specifically, in 2023 the Payroll Mobility Tax was increased only for certain New York City business and in 2019 increases in “mansion” and transfer taxes and diversion of sales taxes applied only in New York City. All communities that benefit from access to the MTA’s system need to support the system.

Third, funding sources should account for recent and potential future tax increases, including those that may be needed to support the MTA’s future operating needs. Funding for the 2020-2024 capital plan was provided from a variety of sources including about $5 billion from real estate transfer taxes imposed on transactions in New York City. These added transfer taxes were included on top of existing real estate taxes that provide about $1 billion in annual funding for the MTA’s operating budget. Continuing to add to already high real estate transaction taxes for this capital plan would be a mistake, particularly given that transfer taxes are highly variable each year and therefore can be challenging to use for capital programs where stable revenue is needed to support bond issuance.

REBNY looks forward to working with all stakeholders to advance a solid, responsible, and aggressive 2025-2029 capital program for the MTA that reflects these principles.