Everyone Pays

I understand perfectly well that the sort of congestion pricing I favor is very unpopular so in most jurisdictions it probably makes sense to focus first on funding alternative modes of transportation, rather than bringing in pricing first and using the revenue to fund transit later. But the other objection, much-mooted in comments, was that this would be bad on equity grounds.

I don't buy it.

Of course the costs of congestion pricing would fall hard on people of modest means, but that's because the cost of anything falls hard on people of modest means. But the whole crux of the argument for congestion pricing is that "free" roads come with real costs. They cost money to build (as would priced roads) but on top of that, they impose huge costs in terms of traffic and delays. That cost, is borne by everyone but, again, people of modest means tend to pay the most since in search of affordable housing they're pushed the furthest out onto the metropolitan fringe. Either way, it's better to be rich than non-rich. The difference is that when you have congestion pricing you have a lower overall social cost, and therefore more ability to provide services to people of modest means. Meanwhile, it's also worth noting that the poor families tend to own fewer cars (i.e., zero or one per family, rather than two or more) so in the final analysis charging for road use and funding transit is redistributive.

Comments

This seems to have published in wrong place. Also, while congestion pricing is unpopular, are tolls equally unpopular? What about tolls which don't require cars to slow down and sit in traffic?

Posted by washerdreyer | March 5, 2008 3:02 PM

As long as you're wonking on congestion pricing today, consider all the revenue that could be raised if you actually auctioned access to HOT lanes. Lots of consumer surplus to be sucked up.

Sadly, a complete non-starter for reasons of populist wrath.

Posted by Adam Stein | March 5, 2008 3:49 PM

"They cost money to build (as would priced roads) but on top of that, they impose huge costs in terms of traffic and delays."

This seems quite like the (rightly) derided complaint that people hate cities because the rent is too high. You often point out that, um... the rent is high because demand is high. That is, people want to live in cities for some reason.

Seems a similar misstep to charge that roads "impose" traffic and delays. One might easily turn it around and argue that the real problem is the supply, and policies that limit that supply.

I know there are plenty of counter arguments to this line of thinking. But it does seem odd to blast roads because they are... popular.

Posted by SM | March 5, 2008 4:01 PM

If what you are trying to get people to do is drive less--for congestion reasons as well as environmental and city planning reasons--I'd argue gas taxes are more efficient than congestion pricing.

Posted by Brian | March 5, 2008 4:09 PM

While I was quick to snark in the previous post, I should try to add something constructive here:

Studies have shown that congestion is good for cities. While on the surface that seems counterintuitive, ponder this dichotomy: compare congestion for the city of New York with the city of Detroit. No comparison. In Detroit you can zoom downtown with minimal traffic and gridlock. In New York trying to drive to Manhattan takes hours and is full of gridlock. Detroit is the quintessential example of a broken American city, a rust belt post-industrial wasteland. When it becomes too costly in terms of time for people to drive downtown, they stop. And then people stop driving and start talking alternate routes. Or they up and move there. So gridlock is a healthy compliment to a thriving downtown. So maybe we shouldn't be working at ways to reduce traffic congestion, but rather increase it. Thus free roads for everyone, but stop building more.

Posted by freddiemac | March 5, 2008 4:11 PM

Gasoline taxes and congestion-based variable tolls are complementary, and both part of the solution. They both put the burden of improving the transportation system on the people who benefit the most from it.

Increasingly, in many states, new highways are being paid for by sales taxes or bonds backed by general revenues. Sales taxes are about as regressive as gasoline taxes, but more regressive than tolls that vary with congestion. The equity of GO bonds will vary by state, but in most states, they will also be relatively regressive.

Posted by MG | March 5, 2008 4:15 PM

SM,

How many more roads do you want to build? It's a well-known fact to transportation planners that building more roads to reduce congestion doesn't actually work.

Posted by Phaedrus | March 5, 2008 4:18 PM

You don't have a house and you are way into density. You don't have a car so you are into congestion pricing (to deal with the congestion created by that density: if you think that density releives congestion, like I think you do you should examine the case of Seattle). You don't have a child and you favor people having less children (so do I, I only have one and my wife is pissed about that). You don't read fiction, and you believe that ficiton is bifurcated into different flavors of crap.

I'm sensing a pattern.

What about neck beards Matt? Where do you stand on neckbeards?

Posted by cw | March 5, 2008 4:50 PM

freddiemac-

Yeah, basically the economics of cities is that if people find it really easy to drive downtown, they do, and then when they get there, they're like, "Huh, now that I'm here I might as well engage in some productive economic activity." But then if there's too much traffic, they stop going downtown, and drive away to roam the open road, leaving nothing behind but empty streets and a few lonely balls of sagebrush.

I must be missing something there.

Posted by jack lecou | March 5, 2008 5:04 PM

Why don't we slow down congestion by slowing down the population growth? And one way to do that is to restrict immigration, which accounts for something like 40% of the population growth in the last three decades.

Posted by Quiddity | March 5, 2008 7:05 PM

Re: That cost, is borne by everyone but, again, people of modest means tend to pay the most since in search of affordable housing they're pushed the furthest out onto the metropolitan fringe.

Except for the occasional old-money enclave like Grosse Point or Beverly Hills, the inner ruing suburbs are usually the cheapest, due the same sorts of factors that have led to urban blight across the city line: old and decaying housing stock, higher crime rates, disliked and feared immigrants and minorities, poor schools. Occasionally an inner suburb reinvents itself as a Party Town, or perhaps as a Gayville, and then its housing prices may climb again, but usually it's the outer ring suburbs that have the newest and biggest houses, the best schools and the whitest faces. Also, the days when most people commuted downtown are long gone (except maybe for NYC and DC). Nowadays most commuting is done suburb-to-suburb and the older downtown skyscrapers may even be falling to ruin themselves. Visit Detroit sometime for an example.

Posted by JonF | March 5, 2008 7:07 PM

people of modest means tend to pay the most since in search of affordable housing they're pushed the furthest out onto the metropolitan fringe.

This is wrong, as JonF noted. The poor don't get pushed out to the metropolitan fringe; they overwhelmingly live in the central city, not the suburbs. Here's the latest Census data on this:

http://pubdb3.census.gov/macro/032007/hhinc/new05_000.htm

But this actually helps your argument for congestion pricing. Because the poor disproportionately live in the central city, they don't use highways or roads nearly as much as wealthier suburbanites. It follows, then, that congestion pricing would have very little impact on the poor (who mostly use public transportation).

In fact, one of the major reasons the poor live in central cities in the first place is that they cannot afford the transportation costs of commuting to the central city from the suburbs every day.

Someone might counter that congestion pricing would drive the wealthier suburbanites back to the central city (because it would increase the cost of living in the suburbs), thus driving up housing prices in the central city and pricing the poor out of the market. But this is actually a good thing. As suburbanites return to the central city, housing prices in the suburbs will fall, which will allow some of the poor to finally move out of the inner city. More importantly, though, when the wealthier suburbanites move back to the central city, they'll increase the tax base, allowing the central city to provide better (or more) public services. The main point is that it will alleviate the problem of "concentrated poverty" that has so many negative feedback loops.

I agree with you about congestion pricing, but you might want think about altering your argument in this way. I think it would be stronger.

Posted by TV | March 5, 2008 9:31 PM

people of modest means tend to pay the most since in search of affordable housing they're pushed the furthest out onto the metropolitan fringe.

This is wrong, as JonF noted. The poor don't get pushed out to the metropolitan fringe; they overwhelmingly live in the central city, not the suburbs. Here's the latest Census data on this:

http://pubdb3.census.gov/macro/032007/hhinc/new05_000.htm

But this actually helps your argument for congestion pricing. Because the poor disproportionately live in the central city, they don't use highways or roads nearly as much as wealthier suburbanites. It follows, then, that congestion pricing would have very little impact on the poor (who mostly use public transportation).

In fact, one of the major reasons the poor live in central cities in the first place is that they cannot afford the transportation costs of commuting to the central city from the suburbs every day.

Someone might counter that congestion pricing would drive the wealthier suburbanites back to the central city (because it would increase the cost of living in the suburbs), thus driving up housing prices in the central city and pricing the poor out of the market. But this is actually a good thing. As suburbanites return to the central city, housing prices in the suburbs will fall, which will allow some of the poor to finally move out of the inner city. More importantly, though, when the wealthier suburbanites move back to the central city, they'll increase the tax base, allowing the central city to provide better (or more) public services. The main point is that it will alleviate the problem of "concentrated poverty" that has so many negative feedback loops.

I agree with you about congestion pricing, but you might want think about altering your argument in this way. I think it would be stronger.

Posted by TV | March 5, 2008 9:32 PM

jack lecou,

Yes, you are missing something there. When someone easily drives downtown, and does their economic activity, it was so easy to get there that they LEAVE. And with them goes the tax base of the core city. If people cannot easily get in and out of the city because of congestion, they won't want to move to a cul-de-sac in hicksville and commute to their job downtown.

If there were enough roads and parking into downtown Manhattan that all the money boys could live in whatever is north of Westchester and commute into town every day, they would. And the city would empty out, property values would fall, equity would be destroyed, and property tax revenues would disappear. That is exactly what happened to Detroit in the post-war era.

So you see, congestion is good for cities. Without it's precious congestion, Manhattan would be another burned out post-industrial hulk.

Posted by freddiemac | March 5, 2008 9:56 PM

freddiemac-

Ahh. Thank you. That makes a lot more sense.

A couple things:

One, the big time factor involved in living in a far flung suburb seems like just the sheer distance. Traffic adds 20 or 30 minutes, but if someone is already willing to drive an hour to Westchester, that's only 30-50% more. Besides, the traffic is mostly right next to the city: it's the same last few miles whether you're in a near or far suburb.

I do think the tax base factor is a big concern, but I don't think making it extra unpleasant to move around is the best solution. The way to solve it is to find ways to prevent users of a city from escaping their share of the costs by crossing jurisdictional boundaries. Tax them wherever they are.

Finally, 'congestion pricing' is oriented toward making it more attractive to live in the central city. Less noise, less pollution, easier to get around within the city. It's probably coupled with efforts to encourage commuters to leave their cars outside and take transit.

In the end I don't think it gives the money boys much incentive to give up their models and Manhattan nightclubs for far Westchester. Even if it's relatively successful.

Posted by jack lecou | March 6, 2008 12:41 AM

freddiemac,

I'm just trying to understand the argument here. Are you saying that vibrant active downtowns are caused by congestion? That downtown businesses thrive because people can't leave the area since traffic is so bad?

Posted by not even an mba | March 6, 2008 7:06 AM

This is yet another problem with the gross increase in income inequality we've seen over the past 25 years. When income inequality is low, using price as a means of encouraging efficient allocation of public resources seems reasonable. When income inequality is high, just about any price won't affect the behavior of the rich at all, while imposing severe burdens on "people of modest means," so using price to regulate behavior seems unfair.

Posted by Bloix | March 6, 2008 9:21 AM

not even-

I think (and freddiemac, please correct me if this is still wrong), that he's saying vibrant downtown + traffic = more people to live there, since the traffic makes it more of a pain to commute from the suburbs every day to work and shop. And, if too many people commute, the city taxbase disappears, crime rises, the streets go to hell, etc.

I agree with the last part at least, which is why suburbanites should pay for their share of city services. I'm not convinced that traffic mitigation ever caused a suburban exodus, however. Detroit's economic decline, for example, clearly had other factors at work. The traffic disappeared once businesses and people left, not vice-versa.

And traffic may make it more difficult to commute, but it also makes it very unpleasant to live and work in a city, which is exactly the problem that plans like London's and NYC's are designed to address.

Posted by jack lecou | March 6, 2008 9:54 AM

freddiemac, nobody lives in downtown Manhattan; it's all office buildings. So there must be a flaw in your reasoning somewhere.

Posted by tps12 | March 6, 2008 2:30 PM

To make freddiemac's argument, 'downtown' is shorthand for "area in which the city collects (property) tax". He's saying congestion is an important incentive to keep resident in the city's tax base.

It's a somewhat misguided view, but not because there are no residential units in lower Manhattan...

Posted by jack lecou | March 6, 2008 5:37 PM