The Effect of New Midtown Direct Service
New Jersey Transit in Northern New Jersey
In 1996, New Jersey Transit introduced “Midtown Direct” service, a one-seat ride to New York Penn Station on the Morris & Essex Lines. Before Midtown Direct, the Morris & Essex trains terminated in Hoboken, where Manhattan-bound commuters had to transfer to PATH trains to cross the Hudson River. In 1996, some Morris & Essex Line trains were rerouted to terminate in New York Penn Station, cutting commute times by approximately twenty minutes in each direction. The $70 million state-funded project included five miles of new track, a 350-foot long bridge, and modifications to the track system. Ridership increased by more than 20 percent during the first year of new service to more than 9 million riders. After ten years of the new service, total ridership on the Morris & Essex Lines had increased to 13.5 million riders, more than half of which was related to Midtown Direct service.
The expanded service led directly to an increase in commercial and residential real estate development around many of the affected stations in New Jersey. For instance, new developments within two to three blocks of South Orange Station, located in downtown Orange, have included a 200-unit multifamily development, redevelopment of a 65-unit multifamily building, and 119 new condominium units. An additional 20 new condominiums are approved and 48 are proposed for the area. The station itself also underwent substantial redevelopment, with six underutilized storefronts under the station viaduct renovated into commuter-oriented retail shops and restaurants.
Morristown Station also experienced a surge in real estate development, with over $200 million of private development occurring in the vicinity since 1996. Subsequently, the town converted its 300-space surface parking lot situated next to the train station into 228 apartments, 8,000 square feet of retail space, and a three-level 700-space parking garage. A 200-unit luxury apartment building near the rail station was 100-percent leased as of 2011.
Studies have shown that improvements like Midtown Direct can have a large-scale positive impact on home values. The Regional Plan Association performed an economic analysis (hedonic modeling) of 45,000 home sales within two miles of a New Jersey Transit station affected by one of three major corridor improvements (the Midtown Direct, the Montclair Connection, and Secaucus Junction projects). This analysis found that the value of homes near affected stations increased by an average of approximately $23,000 per home after these investments. Property values are linked to the distance from stations, where homes within a half mile had average increases of almost $34,000 per home. In total, the value appreciation of residential properties associated with the commuter rail improvements of these three projects totaled nearly $11 billion, representing additional property tax revenue of approximately $250 million annually.1
South Orange NJ TRANSIT Station, South Orange, NJ. Source: Jim Henderson.