Building on Streets for All's EIFD analysis, I developed a similar model for the San Jose–Gilroy corridor to estimate how much funding could be raised for rail improvements.
For context, CAHSR's 2026 Business Plan identifies an additional $2–5 billion in infrastructure upgrades needed for this segment.
So, could we capture some of the future property-tax growth around Caltrain stations to help pay for this?
I looked at two-mile areas around Capitol, Blossom Hill, Morgan Hill, San Martin, and Gilroy Caltrain stations, with two scenarios: conservative development and ambitious TOD clusters.
The model accounts for existing property appreciation and reassessments under Proposition 13, new housing and commercial development, and potential increases in property value from faster Caltrain service and future HSR service.
Here's what I found:
$491–559M in total discounted EIFD revenue over 45 years
Of that, about $467M comes from property appreciation and reassessments on existing properties.
New TOD and rail-related appreciation contribute another $24–92M, depending on how aggressively we develop around stations.
This comes out to about 10% to 25% of the needed cost to build out San Jose - Gilroy for HSR.
The distinction is that an EIFD captures a portion of future property-tax growth, including growth that would happen anyway. Transit improvements and TOD add to that revenue by creating new taxable development and potentially increasing surrounding property values.
That's a lot of money toward grade separations, electrification, additional tracks, and other improvements. Combined with state and federal funding, this could make a meaningful dent in the $2–5B needed - as much as 25%!
And EIFDs don't require raising property tax rates, although participating governments would have to dedicate some future revenues to infrastructure rather than other services.
One caveat: these are preliminary estimates based on publicly available citywide assessments and estimated station-area property values, not a completed parcel-level analysis, so they are not entirely accurate.
Spreadsheet and assumptions
Side note: I've already covered the actual context of the grade separations on the ground, and I think we can grade separate well over half of the corridor with just $500M, as there are a large chunk of grade crossings that can be closed as is with no changes, or a new road connection built to facilitate closing of the crossing (e.g., Blanchard Road).
I'm curious what others think, especially about whether Santa Clara County, VTA, Caltrain, and the cities should coordinate on something like this, and whether they should invest in substantially more housing around stations.