I'd prefer to see real public support, rather than a business/profit justification for lower fares, but in the current greed-valued world I'll settle for a greed justified way to create a community good.
Perhaps it results in more public support for some reason, I'm unfamiliar with the politics of Hong Kong.
You could similarly run the police at a profit instead of being a cost center by gifting 100 hectares around every police station to the police, and have them collect rent on it. That doesn't make sense either.
For one, it creates a perverse incentive where the government can't let property prices fall for the common good least their public transport (or police) services would go out of business.
Hong Kong famously has a problem with this. It's a relatively low-tax regime with absurdly high housing prices, because they raise a much larger part of their revenue by taxing land than most other similarly developed areas.
Not if you tax the value of ground rent only. If anything, the effect goes the other way, as owners are incented to put their underused properties on the market. (And yes, taxing ground rent only in some relative small areas e.g. around a station may introduce distortionary incentives. But in general, shifting taxation towards land improves the incentive for good government, especially provision of local amenities.)
There is also strong synergy between the trains and the area immediately around it. Also you have to buy the land anyways for the station.
Don’t think that argument holds as strongly to police statins
makes 2 billion a year on public transportation
When Google ‘loses money’ on search to make it up with ads, everyone thinks this is very clever. What Hong Kong is doing is no different.
The value of that land is its adjacency to public transportation
In SV, land value is generally orthogonal to nearness to public transportation (because of demographics if nothing else). And along transit lines, the only uptick is near to stations. (If you live next to rail between stations, it's a disadvantage because of noise and added travel in accessing neighborhoods on the other side of the tracks, since you are limited to established crossings.