In new research, the Streets For All Data/Dev team finds LA County alone can use value capture to fund nearly all High Speed Rail projects inside the county while being net positive for the County General Fund.

With the recent abandonment of billions in federal grants, California is more dependent on internal funding than ever to build out High Speed Rail (HSR). Finding concrete local strategies to pay for construction is essential to building out California’s HSR network in a reasonable timeframe. The most recent High Speed Rail Authority draft business plan estimates a baseline cost of $16.8 billion to close the 50 mile gap between Palmdale and LA Union Station.

By leveraging property value increases within two miles of stations, an Enhanced Infrastructure Financing District (EIFD) can capture induced land appreciation observed in many other high speed rail construction projects around the world, functionally allowing this investment in the project to pay for itself. This comparison is not out of scale; LA County has a larger population than Sweden and a larger GDP than Portugal, both nations with high speed rail networks.

1. A two mile EIFD around the three LA County High Speed Rail Stations (Palmdale, Burbank, Union Station) could likely fund all Phase 1 HSR projects in the County
2. We consider net-present revenue in the $15-23B range a high confidence scenario
3. By accelerating property appreciation HSR makes money. A 30% capture rate will add $6.5B in net-present value to the County General Fund
4. Timing is critical, the sooner an EIFD is established the sooner bonds can be issued. We model an EIFD established in 2026 allowing construction starting in the 2030s
5. An EIFD could accelerate near term underfunded projects like Link Union Station, Metrolink electrification, and the High Desert Corridor

Our ‘high confidence’ scenario’ shows the County can fund CAHSR to the tune of $15-23B while recouping the majority of its costs through an EIFD.

Proposal Overview

In California, EIFDs are used to capture future property value growth and set it aside for specific purposes (Streetsblog has an excellent explainer). This special fund can then be bonded against to expedite infrastructure delivery. Locally, this funding strategy is being studied for both the K Line North Extension and the DTLA segment of Southeast Gateway Line.

Traditionally, EIFDs are limited to 45 year periods. However AB 761 (2023) extends this to a 75 year limit in LA County if used for passenger rail. The backloaded nature of value capture means the extended runway brings in significantly more funding, and creates an opportunity to accelerate CAHSR into the LA Basin.

While this study focuses on the ability of LA County to leverage value capture to fund HSR while staying net neutral for the general fund, there is significant merit to building the project even at a property tax loss. It will create hundreds of thousands of high quality union jobs, improve air quality and reduce traffic, and it will link estranged areas of LA County. The project will jump start economic growth across many domains that are out of scope for this analysis.

We believe LA County should initiate a formal study looking at CAHSR value capture, focusing on potential economic benefits, opportunities to accelerate project delivery, and risk and benefit to the general fund.

High confidence scenario - 30% Capture Rate

Total Boost	EIFD NPV (All Stations)	Union Station	Burbank	Palmdale	Total County Net
115-175%	$15,817.8	$7,251.9	$3,927.8	$4,638.0	$6,521.8

High confidence scenario - 50% Capture Rate (Burbank, Union)

Total Boost	EIFD NPV (All Stations)	Union Station	Burbank	Palmdale	Total County Net
115-175%	$23,270.90	$12,086.5	$6,546.4	$4,638.0	-$3,752.3

Note: a 50% capture rate is not possible in Palmdale because of a pre-existing EIFD. All 50% scenarios assume a 30% capture for Palmdale, 50% capture for Burbank, and 50% capture for Union Station. This is why it returns less than a simple 1.7X multiplier.

Conservative Estimates

For a variety of reasons, we believe our ‘high confidence scenario’ is realistic and conservative, likely representing the lower end of a possible EIFD capture. As a brief list:

1. Our sensitivity analysis returned narrow ranges (1-16%). The analysis also returned a mean result of $16.4B (30% capture), or nearly one billion more than our main modeled output. This Monte Carlo analysis is detailed further in the methodology section.
2. Our model only adjusts property values for ‘boost’ scenarios despite other multipliers likely also changing. For example, any uptick in property values also leads to accelerated property turn over and property development rates, both of which would lead to significantly higher EIFD captures. Turnover is especially impactful, largely due to ‘resetting’ artificial discounts created by Prop 13.
3. We only consider vacant parcels viable for redevelopment. This disqualifies many under-built parcels from new residential or commercial development, especially near Burbank and Union Station where fewer vacant parcels remain.
4. When we tested our model on the WeHo catchment of K Line North, our results were about 75% of those estimated by HR&A in 2024. This is detailed further in the methodology section.

Station Catchment Areas

Palmdale Station Catchment Area With significant underdeveloped and vacant land combined with a major reduction in travel time to LA, Palmdale is likely to see significant property value appreciation with the opening of a HSR station.

Burbank Airport Station Catchment Area With many small parcels and limited vacant land, Burbank is likely to see more modest property value appreciation with the opening of a HSR station.

Union Station Catchment Area Downtown LA is a combination of highly developed and underdeveloped land. There are numerous plans near the Arts District for significant development.

The Status of HSR Funding in SoCal

There is currently no funding plan or timeline to advance California High Speed Rail into the LA Basin despite it being the largest population center in the state with over 15 million residents. With estimated costs of $43.2B (YOE dollars) to cross the San Gabriel and Tehatchapi mountain ranges according to the 2026 Business Plan, most Angelenos, even enthusiastic supporters, don’t expect to ride a high speed train into Union Station in their lifetime.

With the initial operating segment of HSR between Bakersfield and Merced beginning to lay tracks and an expected 2032 opening getting closer, the Authority is looking at where to build next. Recent business plans show the urgent necessity of reaching either Girloy or Palmdale, whereafter passenger revenue generates $1-2 billion for the Authority annually. Due to its lower costs, CAHSR has already expressed Girloy as the preferred next step.

Source: California High Speed Rail Authority 2026 Business Plan

Southern California legislators need to be mindful of the reality of the situation. The current funding and approach is likely setting up a Gilroy connection around 2040, a Palmdale connection around 2050, and an LA Basin connection sometime beyond 2060. SoCal has contributed to the project but has seen little in return. While the Bay receives funding for projects like Caltrain electrification and the Central Valley is receiving high speed track, local projects like Link Union Station struggle to get off the ground.

Funding Opportunities

We believe an EIFD in the $15 - 23B range unlocks a realistic path to prioritizing an LA Basin connection. Below are possible funding sources:

LA County EIFD - $15 - 23B This is our high confidence estimate for what an LA County EIFD could generate in net present value with between a 30% and 50% capture rate. Increased appreciation or a larger capture rate could mean a much higher ceiling. 50% would capture upwards of $23B but with lower likelihood of recovering project costs via appreciation.

Burbank and City of LA EIFDs - $8B+ Using the same market assumptions as above, this is what Burbank and the City of LA could generate if they were to also implement a 30% EIFD near their respective stations. We have not included Palmdale, their property tax revenue is capped with an existing EIFD.

State Cap and Trade Funding - $5-10B The state has guaranteed a minimum of one billion annually through 2045, however about half of this will be used for finishing the IOS (Initial Operating Segment) and a majority of the rest will likely be dedicated to a Bay Area connection and debt service unless SoCal can make a compelling case to invest southward.

Private Partnership - $9B+ Because the connection to Los Angeles will be so lucrative, generating annual ticket revenue in the billions, it represents an opportunity to draw in substantial private investment. For Metro’s Sepulveda Transit Corridor, P3 (Public Private Partnership) partners are managing around 25% of the total project cost. We assume the same here.

Federal Funding - The current federal administration has shown great animosity toward HSR and will not be a financing partner. While this will likely change sometime in the next decade, the IOS has only received $3.5 billion in total federal funding, representing about 10% of the project costs despite regular grant applications to friendly administrations. California legislators should assume a similar amount going forward and not bet on any large federal windfall.

Kern/Orange County Contribution - While our study only looked at funding opportunities in LA County, both Kern and Orange Counties would benefit greatly from a Bakersfield to Union Station connection. Almost half of track miles would be inside Kern County entering Antelope Valley, and a connection to Union Station is necessary for reaching the Phase 1 southern terminus in Anaheim. It likely makes sense to use a major LA County contribution as political leverage for funding contributions by Orange County and Kern County, although we don’t make assumptions about their amount or source.

Selling Land - Palmdale owns a significant amount of land near the future High Speed Rail Station. While it is important some of this be preserved for parks or future amenities, other HSR projects show that selling excess public land can fund substantial infrastructure. These parcels would enter the tax roll and generate new taxable acreage, which would then feed into an EIFD and general funds.

Phased Ticket Revenue - CAHSR’s Supplemental Project Report shows that just a connection to Palmdale would generate enough ridership to bring the Authority into the black. Prioritizing funding for passenger service over Tehachapi Pass first could unlock future funding to Union Station (likely in the Billions per year).

We hope two things are clear: First, an LA County EIFD represents a critical step in getting HSR built to Los Angeles before 2050 and makes up, by far, the largest funding piece. Second, with around half of the project funded, supplementing the rest with a medley of revenue streams is realistic. We show a total possibility of $40-50B without asking taxpayers for any additional dollars.

Note: While we won’t get into details about bonding against EIFD revenue, bond terms will likely result in less funding than simple net present values used above, due to the backloaded nature of value capture, likely a 15-30% reduction. This is something that a formal analysis of this proposal should investigate further.

Property Value Appreciation and Boosting Scenarios

There is no peer reviewed research studying property values and HSR in the US, the Acela Corridor and Brightline East being the only two in operation. Non-academic reporting on Brightline shows significant appreciation and we have included it in the table below.

Hensher, David, et al (2012) have written the only meta-analysis of property value impacts from HSR with the following conclusion: “Among the 15 cities where the impacts on the areas around the HSR stations were investigated, eight cities reported that land/property values were positively linked with the opening of HSR; however three cities show the opposite evidence, while four cities have no significant variations in property values.”

In Italy, Turin (20.5%) and Naples (17.9%) showed property values increase near stations while other larger cities did not see notable localized change (Rome, Florence). Nakamura and Ueda (1989) found that in Japan “land values in commercial areas with Shinkansen accessibility rose by 67 percent.” In France the TGV, resulting in increased residential and commercial property values, commercial property in Part-Dieu (Lyon) saw values rise by roughly 40%.

The full spread of appreciation found in Hensher, David, et al (2012) is roughly in the range of 0-70%, but differing catchment areas (in some cases comparisons are between individual city blocks, in other cases between full cities) and differing appreciation ranges make a narrow prediction difficult. Similarly, some of these projects don’t represent high quality greenfield rail like most of CAHSR but instead incremental upgrades to an existing rail system. A cautious takeaway may point to expected property appreciation in the 15-40% range.

Beijing-Shanghai high-speed railway - Shaoshuai Li, Zhigang Li, Jia Yuan, (2020) This high quality study looked specifically at land values within 1.9mi (3 km) of new stations along China’s Beijing to Shanghai High Speed Rail. This largely greenfield project with high speeds, also connecting two major urban hubs, makes for a reasonable international proxy for CAHSR. “We show that the BSH generally increases the land price by about 87%, which amounts to about RMB 99 billion (around USD 14 billion) more in government land sale revenue or helps to cover about 45% of its construction cost. Furthermore, we show the heterogeneity of the impacts of the BSH on the prices of different types of land. Specifically, we find that residential land located within 3 km from a BSH station experiences a price increase of 278%.”

Florida: Brightline - Green Street / WSJ (2023) While no peer reviewed study exists, reporting indicates that Brightline in Florida led to significant land value increases. “In Fort Lauderdale, home values for residences within the ZIP Code near the station have appreciated by 67%… The difference was most stark in Miami. Property values near the station were up 83%.” These urban zip codes represent catchment areas of around 1-3 miles and make a reasonable equivalent to our EIFD catchment areas in LA County.

Our ‘High Confidence Scenario”

Most measured property appreciation happened in the years immediately preceding and following the opening of High Speed Rail lines. We modeled this as a 6-year boost period split before and after a hypothetical 2038 station opening (2035-2040). By incrementing small changes at the beginning of a large 75 year exponential run our model outputs a wide range of results. This ‘butterfly effect’ is both an opportunity and a risk to policymakers, and creates challenges for long term planning.

For example, our model estimates a 75% boost as seen in China, Japan, and parts of Florida, would result in almost $70 billion in net present value. On the other hand a 0% appreciation scenario would result in only $9 billion.

A small boost at the beginning of the EIFD period leads in a wide range of results. These are all 30% capture scenarios

To make this report as helpful as possible, we used global examples to estimate a “high likelihood scenario” of what could be expected with CAHSR in LA County. For each station, this looks like the following:

Station	Boost	Net Present Value	Parcels Developed
Palmdale	75% Boost	$4,638,002,513	559
Burbank	15% Boost	$3,927,831,688	163
Union Station	15% Boost	$7,251,893,394	519

When looking at other examples around the world, large urban hubs with pre-existing high levels of ‘accessibility’ did not see as much appreciation as exurban or satellite cities. Union Station and Burbank, with high property values and fewer undeveloped parcels, in some senses are already saturated, and one can expect lower levers of appreciation. We see a 15% boost over 6 years (0.03% year over year), as a conservative starting place.

As a counterpoint, Brightline, a rail project with worse coverage, service, and speeds than CAHSR, shows that even developed markets like Miami and Fort Lauderdale can still see significant property growth above 30%. This is one reason to assume our 15% boost is a conservative baseline.

Palmdale, a satellite city where travel times into LA will be reduced from over around 90 minutes driving to around 25 minutes, represents a major beneficiary of CAHSR. The combination of LA’s pressurized housing market and numerous underdeveloped parcels near the station will likely lead to significant parcel value appreciation along with commercial and residential development. Beijing-Shanghai showed increased residential land values by 87% near stations where developed, but undeveloped land increased by more than 250%. We consider a 75% property value boost in Palmdale a realistic scenario.

Recapturing Value

Traditionally, EIFDs capture a piece of incremental value, often property taxes. For this study, we largely focused on a 30% and 50% capture of property taxes by LA County. (This represents about 25% of the total ‘property tax pie’, with large parts of the rest going to individual cities, school districts, and other special funds.)

This is an example TRA (Tax Rate Area) in Burbank. The County recieves a larger than normal percentage here (33%), and we’ve highlighted a 30% capture rate

Because the entire ‘property tax pie’ sees increased property value appreciation, not just the captured increment, it means added value can easily outpace what is being captured (and spent) by the EIFD. For example, our 30% High Confidence Scenario assumes that building High Speed Rail will add $22.5b in value to the County General Fund due land value increasing within 2 miles of our target stations. However, we assume $16B of that will be spent building HSR, leaving the County with $6.5B in new revenue (net present value).

LA County 30% capture rate scenarios

Total Boost	EIFD NPV (All Stations)	Union Station	Burbank	Palmdale	Total County Net
100%	$9,109.2	$5,431.3	$2,991.2	$686.78	-$9,109.2
125%	$14,028.3	$8,371.9	$4,571.8	$1,084.7	$2,352.5
150%	$26,673.0	$15,478.4	$9,198.0	$1,996.5	$31,814.5
175%	$68,197.0	$37,765.3	$25,793.8	$4,638.0	$128,565.7

Methodology

As always, our calculations can be run locally using jupyter notebook files. Please reach out with questions or datasets.

Since the mechanism of an EIFD is essentially just reserving a future portion of property taxes in a specified geographic area, the work of projecting the value of an EIFD is modeling the increase in property taxes for that area over the timeframe. We were able to utilize existing reports on EIFDs in LA County, including the EIFD study for the LA Metro K Line Northern Extension Project and LA River EIFD analysis to understand this type of modeling and apply the same methods to the areas around the three CAHSR stations.

In addition, we developed our EIFD methodology to incorporate additional scenarios for realistic additional value capture, such as additional property values growth in the years immediately following project completion.

Reverse Engineering EIFD Projection Modeling

We developed our EIFD calculation methods by following the details featured throughout previous analyses and filling gaps based on our understanding of EIFDs and property value appreciation in California. We used the same EIFD parameters (length of time, capture rate, discount rate) and the most analogous input parcel and tax data to which we had access, limiting parcels to the City of West Hollywood in proximity to the San Vicente-Fairfax Alignment, and refined our model until our results reasonably matched those of the K Line report. At the high level, we are simulating the multiple ways taxable parcels might increase in value for the time period of the EIFD and calculating how much value this contributes to the EIFD revenue stream, ultimately allowing us to determine the Net Present Value (NPV) of the EIFD.

Turnover - A parcel is “turned over” when it is bought or sold. When this occurs the parcel is reassessed by the Assessor’s Office and might increase in value more than it would have under standard year-over-year Prop 13 appreciation. The K Line North report states that, based on analysis of historical property sales data, they assume 5% and 7% annual turnover for residential and commercial properties, respectively. Upon turnover, residential properties increase in value by 6% and commercial properties increase by 4%.

Redevelopment - The K Line North report assumed that only “vacant” parcels are redeveloped over the course of the EIFD, defining a property as “vacant” when the value of the improvement is 10% or less than the value of the land itself. Based on the aforementioned analysis of historical property sales data in West Hollywood they estimate development value for commercial and residentially zoned parcels at $384 per sq foot and $688 per sq foot, respectively.

Annual Prop 13 Growth - The simplest way that a parcel’s value appreciates is by annual growth in its assessed value, which is capped at 2% by Prop 13. If the parcel is not subject to turnover or redevelopment, its value goes up by that 2% amount.

After initially implementing this EIFD model as-stated, a few issues arose that required us to apply knowledge about EIFDs and property value appreciation to create a useful model. Most of these gaps were simply questions of how to implement general EIFD logic in our code. One example was limiting parcels turning over multiple times within the span of the 45 year West Hollywood EIFD. This initially caused inflated property growth and EIFD increment values and was solved by implementing a “parcel tracker” which maintained state for all parcels in the analysis and only opened a parcel for turnover a second time after a specific period of years had elapsed. In most cases we set this period to 45 years, meaning parcels could only turnover once during the EIFD, but we also experimented with 20 and 30 year turnover cooldowns.

Building Our CAHSR EIFD Model

As we built our model and developed our understanding of EIFDs and California property taxes, several considerations arose where we felt that we needed to depart from preexisting methods and/or add additional granularity to have a more rigorous model for applying to the areas surrounding the three LA County CAHSR stations in DTLA, Burbank, and Palmdale.

We performed our own analysis of the turnover and vacant redevelopment rates in the three individual station areas separately. It would not have been appropriate to assume the same property market conditions in West Hollywood would apply equally in Palmdale, Burbank, and DTLA, each a unique real estate environment. We analyzed the property tax assessment rolls data from 2011-2020 to calculate annual property turnover rates and vacant parcel development rates. The set of roll years was chosen to analyze market conditions predating the pandemic as the pandemic created anomalous conditions in real estate markets.

Metric	Burbank	Union Station	Palmdale
Average Annual Turnover Rate (All Non-Vacant)	4.35%	6.03%	6.90%
Average Annual Turnover Rate (Residential)	4.31%	6.18%	6.90%
Average Annual Turnover Rate (Commercial)	4.76%	5.14%	6.98%
Average Annual Development Rate	2.20%	2.65%	1.39%
Average Vacant Parcels per Year	1,039	—	6,446

A key piece of this type of modeling not detailed in other EIRF reports was any discussion of zoning and, more specifically, Floor Area Ratio (FAR), when projecting the value of redevelopment of vacant parcels during the EIFD. The report includes values per sq foot used when calculating redevelopment value but does not specifically detail how these values are applied. We also did not feel it would be appropriate to apply the values per sq foot from the report flatly to DTLA, Burbank, and Palmdale since these are distinct real estate markets. In our CAHSR model, we chose to use the zoning data in the three relevant areas to determine the FAR and determine city-specific values per sq foot using the last five years of parcel assessment data to calculate redevelopment values for vacant parcels in the EIFD.

City	Residential (per sq ft)	Commercial (per sq ft)
Burbank	$692.89	$536.53
Palmdale	$250.85	$227.26
Los Angeles	$596.67	$524.97

Creating a clear, usable mapping of zoning designation to FAR value was fairly difficult. FAR is often not just determined by the zoning designation but also by height districts, adjacent parcel use, and other complex minutiae of land use policy. Luckily we have incredibly knowledgeable and hardworking SFA volunteers who applied their expertise in analyzing opaque local zoning codes to create consolidated zoning models for DTLA, Burbank, and Palmdale with conservative values for FAR. When modeling redevelopment, we assume that parcels are developed to a conservative 85% of the zoned FAR value.

Prop 13 Accounting in Parcel Turnover

The most significant departure we made from preexisting models, in terms of EIFD value, was how we handled assessment projection in property turnover. For example in the K Line North report the only unique handling of turnover is allowing for an extra 4-6% value increase for that year. This, however, does not account for the full reassessment that occurs when a property is turned over. If there is a property that has not been turned over since the 1980s, such as many LA single-family homes, its value on the books might only be a few hundred thousand dollars even though the actual value is upwards of one million. If turned over, this property’s value would not just increase by 6%, it would be reassessed at its current market value.

It is difficult to model property assessments today, let alone 40+ years in the future, however we decided on the following method of calculating reassessed property values:

Market Reassessment After Turnover

When a parcel turns over, Prop 13 appreciation is removed and the parcel is reassessed at an estimate of current market value grown from its Improvement Base Year assessed value.

$$V^{\text{market}}_{i,t} = V^{\text{IBY}}_{i} \left( 1 + r_i + \mathbb{1}_{t \in \mathcal{B}} \cdot r^{\text{boost}} \right)^{\tau_{i,t}}$$

The effective growth horizon is capped to prevent explosive appreciation from very old Improvement Base Years:

$$\tau_{i,t} = \min\!\left( (t_0 + t) - y^{\text{IBY}}_i, \;\bar{\tau} \right)$$

The parcel is reassessed only if market value exceeds its current assessed value:

$$V^{\text{assessed}}_{i,t} = \max\!\left( V^{\text{assessed}}_{i,t-1}, \; V^{\text{market}}_{i,t} \right)$$

Upon reassessment, the Improvement Base Year is reset, establishing a new Prop 13 lock-in:

$$y^{\text{IBY}}_i \leftarrow t_0 + t, \qquad V^{\text{IBY}}_{i} \leftarrow V^{\text{assessed}}_{i,t}$$

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Term Definitions

$$\begin{array}{r l} V^{\text{market}}_{i,t} & \text{Market value of parcel } i \text{ in year } t \text{ upon turnover} \\[6pt] V^{\text{assessed}}_{i,t} & \text{Assessed value of parcel } i \text{ in year } t \\[6pt] V^{\text{IBY}}_{i} & \text{Improvement Base Year value (Prop 13 lock-in)} \\[6pt] y^{\text{IBY}}_i & \text{Improvement Base Year of parcel } i \\[6pt] r_i & \text{Market appreciation rate (residential or commercial)} \\[6pt] r^{\text{boost}} & \text{Additional appreciation in booster years} \\[6pt] \mathbb{1}_{t \in \mathcal{B}} & \text{Indicator: 1 if year } t \text{ is a booster year, else 0} \\[6pt] t_0 & \text{Simulation start year (freeze year)} \\[6pt] \bar{\tau} & \text{Maximum lookback cap on appreciation years} \\[6pt] \tau_{i,t} & \text{Effective appreciation years applied} \end{array}$$

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Essentially this method “removes” the Prop 13 2% annual growth from the current year of the EIFD back to the original assessment year and then applies market growth back to the current year. We cap this back-calculation of growth at 1978, when Prop 13 was passed. We use the K Line North 4% and 6% rates for the market growth, which is conservative when compared to the 8.62% average increase in residential values in LA County over the last 32 years.

It is worth understanding how much of an impact this Prop 13 accounting makes. When accurately modeling this reassessment, parcel turnover becomes the highest contributor to EIFD value, far eclipsing development of vacant lots.

Consider a residential home purchased in 1985 at the value of $100,000 and turned over in 2025:

Metric	Value
Original Assessment (1985)	$100,000
Prop 13 Value in 2025 (2%/year growth)	$220,804
Market Value in 2025 (6%/year growth)	$1,028,572
Value Increment from Turnover	$807,768
Market Value Multiplier	4.66x

Turnover unlocked massive gains in value by resetting the Prop 13 protection on the parcel. At scale, with thousands of parcels turning over (at historical rates) as the EIFD progresses, turnover creates the vast majority of the value captured by the EIFD. These massive differences in parcel value are not limited to properties held for many decades, as parcels of all kinds lead to significant differences in turnover. The following shows several different parcel scenarios and their turnover effects with respect to Prop 13:

Scenario	Property Type	Years Under Prop 13	Prop 13 Value	Market Value	Turnover Increment	Multiplier
Recent Assessment	Residential	15 years	$336,467	$599,140	$262,672	1.78x
Typical Long-Held	Residential	35 years	$299,983	$1,152,913	$852,930	3.84x
Maximum Effect (1978)	Residential	47 years	$190,226	$1,159,944	$969,718	6.10x
Commercial	Commercial	30 years	$362,272	$648,680	$286,407	1.79x

The value of existing property turning over dominates the value captured by development of vacant parcels, largely due to the effect of Prop 13. The table below shows the value growth at the end of the 75-year EIFD in DTLA with a 5% value boost after station opens:

Property Type	Total Value Growth	Number of Parcels	Total Value per Parcel
Existing Developed	$2,412,329,269,615	23,852	$101,133,160
Vacant Developed	$1,006,775,129	516	$1,951,114

This ~50x difference in the value growth parcel mainly demonstrates how much property tax value is currently “locked-up” in the current county tax assessment roll due to Prop-13. By far the most significant driver of property tax growth in the county comes from properties turning over and releasing this “locked-up” value.

Scenario Planning

In addition to calculating a baseline model for the projected value of an EIFD for LA County High Speed Rail, we wanted to model additional scenarios where other factors might unlock even high property value growth accompanying this massive infrastructure investment. The main scenario we were interested in exploring was one observed in other countries (discussed above) after similar HSR projects completed, where in the immediate few years following the station opening the surrounding properties saw higher increases in property value.

Implementation of this growth scenario was fairly simple, as we were able to incorporate it into the reassessment-on-turnover calculation. The increase does not happen immediately in the years after the station opens for all parcels, as this would violate Prop 13, but instead occurs on turnover. When we calculate the reassessment we add the value increase on top of the base market growth rate.

Monte Carlo Sensitivity Analysis

While building this model it became clear that due to turnover and vacant development, a value increase early in the EIFD would lead to potentially very significant increment gains later. This means the model is potentially sensitive to stochastic noise. To better understand this sensitivity, we ran our EIFD simulation for each station area 100 times controlling for all the same mode parameters but using different random seed values.

Metric	Union Station	Burbank	Palmdale
Mean NPV	7,506,517,195	4,425,959,968	4,491,002,773
Median NPV	7,470,451,294	4,421,959,826	4,329,611,746
P5	7,175,658,313	4,333,662,170	3,597,475,280
P95	7,882,267,800	4,509,389,641	5,886,834,207
Std Dev	232,848,978	54,768,687	727,957,387
Coeff of Var	3.10%	1.24%	16.21%

The Palmdale model is by far the most sensitive to these stochastic effects, and this ultimately makes sense given the higher numbers of vacant parcels in the catchment area and the additional “boost” assigned to Palmdale in the “High Confidence Scenario”. With that significant increase in property values once the project completes, randomness can mean that in certain runs more vacant properties are developed before the boost period and are subject to its effects.

Returning to West Hollywood

Once we had solidified our EIFD model, we thought it would be valuable to apply it to the original West Hollywood K Line use case with which we began. The K Line North Report projects that a 45 year, 50% capture EIFD would yield $622 million in net present value for the City of West Hollywood. Using the same model input parameters as the report, and notably not assuming any increased market growth after project opening, our model projected only about 75% of that value. It is worth noting that our model relies on FAR values from zoning data to project vacant parcel development value and the report does not mention this element, which is a meaningful difference. We accounted for this by using FAR values of 1 for all parcels and using the values per square foot used in the report.

Model Type	EIFD Value
Official K Line North Report	$622 million
Streets for All Model	$467 million
Streets for All Model w/ lower turnover cooldown	$612 million

We were able to produce a closer result by changing a parameter that represents a constraint not discussed in the official report: the minimum number of years between turnover. The report assumes a constant amount of turnover of parcels annually and in our implementation we chose to introduce this limiting factor so that some subset of high value parcels would not, by chance, turnover multiple times consecutively leading to heavily inflated market values. In the CAHSR model we set this “turnover cooldown” at 45 years, meaning that parcels can only turnover at most twice during the 75 year span and most will only turnover once. By reducing the cooldown to 10 years, the model produced a result closer to the official report. We believe these results demonstrate the fidelity of our model, especially in regards to leveraging actual zoning data, and show that we’ve made founded, conservative assumptions about value growth in our analysis.

Limitations and Future Work

A key limitation in this analysis is the complexing of zoning codes in the relevant cities. We ultimately were able to create a high-quality, useful simplified zoning model (similar to our previous work on SB 79) with FAR values, however digital zoning codes able to quickly and simply determine parcel FAR would have allowed for even more accurate redevelopment modeling.

In the future, we’d love to generalize this approach into a general EIFD calculator that anyone could use if they supply the right geospatial, assessment, and zoning data. This would be an ambitious project, but could significantly lower the barrier to entry for EIFDs. Cities would still likely need professional reports to establish an EIFD however they could make use of this calculator as a first pass to see if pursuing that full report would be worthwhile. EIFDs are a fantastic way to unlock more funding for critical infrastructure of all kinds and we would love to see more local and regional civic bodies take advantage of them.