NEW YORK -- Plans to expand commuter rail from Long Island into Manhattan for the first time in a century could improve the island's economy as well as spur construction of smarter living space in a region still reeling from the shock of Superstorm Sandy, says a report by the Rauch Foundation.

The study, called "How the Long Island Rail Road Could Shape the Next Economy," argues that the commuter service has been central to the development of Long Island since it was chartered in 1834 and completed in 1910. A quarter of all Long Island income stems from the line's ability to connect residents to jobs in New York City, the report says.

But expansion is coming for the first time since the LIRR connected into Manhattan's Penn Station in 1910, bringing with it new opportunities as well as challenges. Work is under way on tunnels that will give Long Islanders direct access to Grand Central Terminal on the east side of Manhattan, likely by 2019.

This addition, along with two other local projects (one approved, the other not), would tie Long Island's economic prospects even more closely to New York City's, as well as possibly increase the number of people opting to live on the island. Home values in Nassau and Suffolk counties could rise, as could the number of workers better able to make it into the city.

The projects come with a climate angle, too. The report -- released as part of the annual "Long Island Index" -- suggests the island's ability to "withstand disruptions from extreme weather, flooding [and] attacks" would be improved by three tunnels arriving in Manhattan in two locations rather than all LIRR service ending at Penn Station on the west side.

Yet the expansion and hoped-for boom among Long Island advocates is also likely to mean a sharp escalation in the need for more housing close to rail. That translates into more construction, more homes relying on the embattled Long Island Power Authority and the need for more thoughtful urban management in a region that was among the hardest hit by Sandy.

Keeping future storms in mind

Indeed, much of the island was without power for weeks or months after the storm, and Gov. Andrew Cuomo and others have suggested that coastal areas should not be rebuilt without sea-level rise and the prospect of future massive storms and storm surges in mind. The Democratic governor has also said he will abolish the Long Island Power Authority and hopes to privatize power generation and delivery on Long Island.

This year's index does not dodge those challenges, though much of its work was completed before the storm hit in late October.

"Municipalities, supported by federal, state and regional actions, will need to adopt land-use and economic development policies that will create jobs and housing around the transit network," the index said. "These will need to include funding for sewers and other critical infrastructure."

Nancy Rauch Douzinas, president of the Rauch Foundation, reiterated those points in an interview. She said the results of the study are more compelling in light of the hurricane, as the aftermath may suggest the need for more clustered living space away from the vulnerable coast.

She added that Sandy demonstrated the need for better transit mobility and evacuation routes in case of future storms.

"I think the fact that Sandy occurred as it did is forcing this issue of how and where we live on all of us," she said. "There are choices, and there are trade-offs. These are big issues."

A 2010 version of the index estimated that 90,000 new homes could be built as a mix of town houses, garden apartments and midrise buildings in and around LIRR stations. To Douzinas, all that could be seen within the larger context of more sustainable planning for the future, which makes more practical sense after Sandy, she said.

How much will be rebuilt on the coast?

"When you look very long term in terms of climate change, there seem to be places where they shouldn't be rebuilding," she said, noting that most of the train stations and surrounding areas are away from the coasts in the middle of the island.

Still, the same Long Island Index released a survey late last year that found about half of Long Island's residents are looking to leave within the next five years because they think rents and mortgages are too high. Both studies were completed before Sandy hit and left the island with billions of dollars in damage to homes, cars and personal belongings.

When asked whether the LIRR expansion was smart policy in light of these developments, an official at the Regional Plan Association, which conducts research and provides advice on urban planning in the New York region, insisted the new rail into Grand Central plus local lines would help the island's municipalities better adapt to the changing climate.

"What we're recommending in this report is very consistent with the type of climate-resilient place one would like Long Island to be," said Chris Jones, an urban planner and vice president for research at the association.

Jones said communities deemed more "climate resilient" are often built with redundancies in mind. Having more than one line into Manhattan, for instance, could be taken as a sign of resiliency because it provides more options.

The index also notes that the other commuter railroads in the region -- Metro-North and New Jersey Transit -- have steadily increased ridership over the last two decades with new services. Jones said communities in New Jersey and Westchester County have flourished as a result of transit investments, which he noted are coming to Long Island for the first time.

Jones added that towns along the coast in Long Island are part of the plan because they are serviced by LIRR, which terminates in Montauk close to the tip of the island. He acknowledged that some structures should be moved away from the coast, but he would not support leaving the coast as the natural buffer it may have been intended to be.

"If we get ourselves caught up in this either-or question, of rebuilding on the coast or not rebuilding on the coast, then we're missing a lot of ground for where some optimal solutions might lie," he said.

The report also concluded that local congestion and air quality would benefit from the addition of the commuter lines.

Click here to see the report.