It depends on how the project is funded. Some improvements (such as bringing city water/sewer to an area on the outskirts of town or paving a dirt road) are ty

It depends on how the project is funded. Some improvements (such as bringing city water/sewer to an area on the outskirts of town or paving a dirt road) are typically funded via special assessments on the affected property. The local government can then sell bonds secured by the future revenue stream and pass along the financing cost to those who see the benefit. Subway extensions typically distribute costs over a wider population (the regional/state/federal government paying for large chunks of it). On some level this makes sense. A special assessment on the areas within X feet of a subway station would likely be prohibitively costly for property owners, and the entire region benefits from better transportation infrastructure with more benefits. On the other hand, the person who owns the property across the street from the new subway station is benefiting much more than someone who lives on the other side of town. Perhaps a combination of special assessments and general revenue funding is more appropriate for this scenario? You're certainly correct that the current system transfers a lot of public value into private hands. The Central Subway in SF is going to make some property owners in Chinatown very wealthy.