A new passenger-rail tunnel that will run under the Hudson River between New Jersey and New York could increase home values by $18 billion and generate $375 million of new property tax revenue for municipalities, a Regional Plan Association report released last week said.

The tunnel, called the Access to the Region’s Core, or ARC Tunnel, will offer a new rail connection between northern New Jersey and midtown Manhattan. New Jersey Transit began construction of the $8.7 billion tunnel in June 2009 and anticipates finishing the project in 2017.

The RPA analysis indicates that the new commuter tunnel could boost by $18 billion the values of homes within two miles of the NJTransit system in northeastern New Jersey and the Metro-North Port Jervis and Pascack Valley commuter train stations in southeastern New York.

Homes within one-half mile of train stations could appreciate by up to $29,000, while the overall average for homes could increase by $19,000. The projections are due in part to an anticipated population increase.

The RPA expects the number of residents west of the Hudson River with a 50-minute or less commute to Midtown Manhattan will double after the ARC’s completion. Areas with a 70 minute or less commute to Manhattan are projected to have a 25% increase in population.

“Property value increases are just one of the long-term economic benefits of the ARC, which also include an overall increase in the region’s economy, new jobs on both sides of the Hudson, higher personal incomes, higher commercial property values, and reductions in ­driving, highway congestion and air pollution,” RPA executive director Thomas Wright said in a statement.

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