New York gets serious about traffic with the first citywide US congestion pricing plan

After years of debate, New York state has adopted congestion pricing to deal with traffic problems in New York City. Starting in 2021, fees will be imposed on all vehicles entering a pricing zone that covers lower Manhattan, from 60th Street at the southern edge of Central Park to the southernmost tip of the island.

This approach has succeeded in cities including London, Singapore and Stockholm. For scholars like me who focus on urban issues, New York’s decision is welcome news. Properly used, congestion pricing can make crowded cities safer, cleaner and easier for drivers, cyclists and pedestrians to navigate.

The details matter, including the size and timing of charges and the area that they cover. Congestion charges also raises equity issues, since rich people are best able to move closer to work or change their schedules to avoid the steepest costs.

The proposed New York City congestion pricing zone. Fix NYC via Streetsblog, CC BY-ND

The downside of density

Cities concentrate people close together for good economic reasons. Clustering activities allows transfers of information, knowledge and skills. At their best, cities create deep pools of labor and large markets of consumers, and make it possible to provide public goods such as mass transit and trash collection efficiently. Planners should be encouraging cities to become bigger and more dense if we want to improve economic performance.

But growing concentration also imposes costs, and one of the largest is traffic congestion. Drivers spend valuable time sitting idly in traffic jams, while noise, accidents and pollution impose heavy burdens on city residents.

Should road use be free?

The idea of charging for use of public roads is not new. Economist Arthur Pigou discussed the issue as early as 1920 as part of his attempt to remedy the suboptimal workings of the market system. In 1963 Canadian-born economist William Vickrey argued that roads were scarce resources that should be valued by imposing costs on users.

Consumers intuitively understand differential pricing. We expect to pay more for airline tickets at peak travel times and for hotel rooms at popular times of the year. Congestion pricing also forces users to think about the cost of making a trip, and thus to evaluate their travel patterns.

[embedded content] A cyclist’s perspective on traffic in lower Manhattan, filmed in 2018.
And it can be effective. A 2008 study gave drivers in Seattle a hypothetical cash sum to spend on trips, charged them tolls linked to traffic congestion levels, and let them keep money they did not spend. Their cars were fitted with equipment to monitor driving patterns.

The results: Travelers altered their schedules, took different routes or collapsed multiple trips into single journeys. Collectively, these changes reduced congestion at peak time, lessened wait times and increased average travel speeds in the study’s regional traffic model.

Success in Europe and Asia

Evidence from cities around the world shows that charging motorists fees for driving into city centers during busy periods is a rarity in urban public policy: a measure that works and is cost-effective. Congestion pricing has succeeded in cities including London, Singapore and Stockholm, where it has eased traffic, sped up travel times, reduced pollution and provided funds for public transport and infrastructure investments.

It also can produce some unintended consequences. In London, house prices within the congestion charge zone increased – bid upward by consumers who were willing to pay to avoid traffic and enjoy improved environmental conditions. Over the long term, the congestion tax lubricated the gentrification of central London.