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NYC Congestion Pricing Could Unleash a Transportation Revolution
By Adie Tomer, November 16, 2023, 11:30 AM EST
There’s an adage, often credited to Winston Churchill, that Americans will eventually do the right thing, but only after they’ve exhausted all other possibilities. It’s a timeless bit of criticism, as well as the perfect summation of why America is about to experience its most consequential transportation reform in generations.
After multiple false starts over the past two decades, New York City is finally ready to launch a congestion pricing program in 2024. Drivers into Manhattan will pay a significant fee to enter the area from the Battery up through Midtown Manhattan. By deterring some people from traveling by car into Manhattan’s dense central neighborhoods, the fee will help alleviate traffic on some of the country’s busiest roads, provide much-needed revenue and passengers for the Metropolitan Transportation Authority’s train and bus lines, and clean the air for everyone’s benefit.
But what makes New York’s congestion pricing such an important development is what it means for every other congested American city. Even though cities around the world have successfully launched congestion pricing programs for half a century, US elected officials have exhibited far less courage, frequently stopping at small pilots or resident surveys.
New York City promises to finally stop the timidity. And if it sees the same positive results as its global peers, then I expect other city leaders will quickly look to replicate New York’s success.
Congestion pricing isn’t just a new fee on driving; it’s the single most powerful transportation experiment America has not yet tried.
The Economics of Congestion
It’s no mystery why America’s transportation arteries are clogged. Even after decades of suburbanization, our urge to work and play next to each other pulls us toward the same downtowns, Main Streets and entertainment districts. The problem is: All that suburbanization has extended the distances between where people live and where they want to go. In 1969, the average American traveled 19.5 miles each day; by 2017, that figure had risen to 40 miles a day. Those kinds of distances push people onto the same roads, at the same times, all to go to the same places.
For many, the obvious response is to add supply. The thinking goes that if we could just build a few more roads or add a couple more highway lanes, then there’d be plenty of space to accommodate all the drivers. We now have more than enough data to know building more roads doesn’t work. We simply can’t build enough capacity to handle the insatiable driving demand that suburbanization creates. That’s especially true for the roads running into our urban cores, which concentrate the most jobs, retail, entertainment and other assets in the smallest areas.
Economists and planners have long argued for a more demand-driven response. Since most roads appear free to use — meaning, none of us see a price signal to drive on the road — charging drivers during busier times should cause people to adjust their travel patterns. It’s what we experience when trying to buy plane tickets during the busiest dates, or when ride-hailing companies charge you a surge fee. Columbia University professor William Vickrey won a Nobel Prize for this exact road pricing idea, and former Brookings Institution expert Anthony Downs spent decades explaining how extensive roadway construction would only induce more driving and congestion.
Today, cities all over the world have translated their ideas into practice. Officials in Singapore deployed the world’s first congestion pricing scheme in 1975, initially using paper licenses to enter downtown during the morning rush. Norwegian cities implemented the first European tolls in the mid-1980s. London adopted its congestion charge in 2003, and Milan followed in 2008. In every case, congestion pricing worked: Fewer people drove into the city centers, congestion fell, air pollution-related health outcomes improved and the cities raised money to invest in alternatives.
Stockholm’s experience may include the most important lesson for a US audience. Located on an archipelago with limited routes leading to the city center, Stockholm long struggled with congestion. Instead of starting with a permanent congestion policy, officials first tried a seven-month pilot to demonstrate its value and build public support. As expected, congestion decreased during the 2005 pilot and returned almost immediately once it ended. That flipped public opinion and the policy soon became permanent, proving two universal truths: No one likes to pay for things, but no one likes traffic either.
Paving the Way for Other US Cities
Americans are not so different than our global peers. Polls consistently show deep frustration with traffic levels on US highways and around downtowns. Stateside newspapers regularly publish stories about congestion charges in global cities, often tinged with the implication: “Why not us?” The problem is no one in the US has been willing to replicate these models.
Until now.
The timing of New York’s program couldn’t be much better. The MTA is struggling to recover pre-Covid ridership levels, particularly on the longer-distance Metro-North and Long Island Rail Road lines. Projections of NYC congestion pricing’s effect show that up to 45,000 additional riders would use the MTA each weekday. Meanwhile, the state plans to reinvest nearly 100% of the congestion revenues back into the MTA system, shoring up annual budgets today and unlocking expansion plans in the future.
Charges will fluctuate, with estimates between $9 and $23 to enter the congestion zone during peak hours and smaller fees during lower demand periods. Those charges will be in addition to current tolls on bridges and tunnels. Drivers who want to keep their costs low can use the region’s world-famous trains, buses and even ferries. It’s a near-perfect combination of geography and transit.
Read more: What Congestion Pricing’s Arrival in NYC Would Mean
Once New York residents, visitors and journalists see the congestion relief the program provides, chances are the idea will quickly spread to other cities. Residents and officials in Boston, Los Angeles, San Francisco, Seattle and Portland, Oregon; are already considering congestion pricing.
And the underlying conditions that congestion pricing addresses are remarkably similar across large American metro areas. Even after the rise in telework, highways are still congested. Every transit agency needs more passengers and more revenue. And every mayor wants fewer downtown parking lots and more people.
We know American cities and states love copying what works. Look at marijuana legalization; it was no secret that most Americans did not share the government’s extreme position on marijuana criminalization, and a mix of medical and criminal justice experts persistently argued for different approaches. But it wasn’t until Oregon and Colorado legalized recreational use and produced positive results — including significant new revenue to play with — that other states implemented their own plans.
Of course, just like marijuana legalization, there are real challenges to launching a congestion pricing policy that can earn and maintain public support. Top of the list are equity concerns, particularly for cities without robust transit: They will need a plan to address the concerns of low-income drivers. Another concern is balancing prices enough to not spook downtown and central city demand. Then there’s politics: Americans tend to bristle against any new fees when first proposed. State officials may even look to score political points by blocking the fees, a situation New York City faced.
Fortunately, there are already playbooks for how those challenges can be overcome: Plenty of applied researchers, including my colleagues at the Eno Center for Transportation (where I am an advisory board member), have outlined how to apply global experiences to a US context.
Once congestion pricing gets off the ground, it can unlock the Holy Grail of transportation pricing: vehicle miles traveled (VMT) fees, which would charge for every mile driven, not just those in specific zones. The idea is to give users a constant price signal, helping to keep all roads flowing and internalizing many of the social and environmental costs drivers create. Oregon and Utah are testing VMT fees, and the federal government continues to assess the potential.
A VMT fee would transform the American driving experience into something more akin to how we consume electricity and water, recognizing road space is a finite resource. In a country deeply rooted in the use of prices to shape behavior, VMT fees should create a serious incentive for communities to invest in more proximity-focused neighborhoods that reduce the need to drive.
For far too long, US cities have struggled with central city congestion, clogging our most valuable neighborhoods with vehicles, smog and general frustration. New York’s elected leaders have shown the courage to finally try something different. The entire country owes them deep gratitude for the experiment they’re about to undertake — it’s in all our best interests that they succeed.
Adie Tomer is a senior fellow at Brookings Metro. He’s an expert in infrastructure policy and urban economics, with a particular focus on transportation and digital technology issues.
To contact the editor responsible for this story:
Nicole Flatow at nflatow@bloomberg.net
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