Congestion Pricing Fairness

I caught this press release from the Environmental Defense Fund today through Streetsblog. One of the main complaints people have against congestion pricing of roads is the potential for a disproportionate impact on low income families that often trade a far-flung commute for lower housing prices. The article suggests strategies that may work to mitigate these impacts:

Congestion pricing to improve traffic flow is most effective when transportation planners incorporate equity goals into the early planning stages of a pricing program, according to a new study produced by the RAND Corporation and sponsored by Environmental Defense Fund (EDF). Congestion pricing is a proven, effective tool to reduce greenhouse gas emissions from traffic, to unclog city streets, and to finance a new generation of transportation infrastructure in cities worldwide, including London, Singapore and Stockholm.

The report is timely because the U.S. Department of Transportation’s Urban Partnership program recently began providing hundreds of millions of dollars in funding to six metropolitan areas Chicago, Los Angeles, Miami, MinneapolisSt. Paul, San Francisco and Seattle willing to implement congestion pricing. Congress also must reauthorize the federal transportation bill before the current $286 billion bill expires on September 30.

“This study of all the literature on the subject shows that congestion pricing can reduce congestion, reduce air pollution and improve mobility and access for everyone. Planners just have to design the system with these goals in mind,” said Kathryn Phillips, an EDF transportation policy advocate. “Congress should give states and cities freedom to experiment with pricing on all roads to reduce traffic gridlock’s drag on the economy, reduce our oil dependence, and cut pollution, especially in communities with heavy traffic congestion.”

Transportation policymakers adopt congestion pricing charging drivers more to travel particular routes at peak travel times to reduce traffic gridlock and air and global warming pollution, and to raise money for transportation projects, especially mass transit. However, since these policies impose a cost on driving in a location that previously was free, critics often suggest that it will disproportionately impact lower-income drivers, so some would be “priced off” the roads.

Fortunately, these potential inequities can be offset. A study of New York City’s proposed cordon pricing system a form of congestion pricing in which drivers would pay to enter a cordoned area (i.e., the central business district) found it to be more fair geographically than the city’s current toll system, which allows people driving from some parts of New York to drive into Manhattan for free.

Since equity is so specific to individual regions, policymakers responsible for developing a congestion pricing proposal should:

Test it through modeling to determine who tends to pay charges and whether low-income or other transportation-disadvantaged groups are disproportionately affected.

Conduct sufficient outreach so that residents understand the proposal and have opportunities to offer suggestions.

Monitor equity after congestion pricing is implemented, and change the system periodically if the initial tools to promote equitable outcomes are not meeting their goals.

Three methods to promote equitable outcomes include:

1. Revenue Redistribution: Among existing congestion pricing implementations, the most common way to redistribute revenues is through public spending on specific transportation-related improvements. London uses most of its congestion pricing revenues to fund enhanced bus service.

2. Discounts and Exemptions: San Francisco is considering a congestion pricing plan that would exempt taxis from the fee, and offer discounts to low income and disabled drivers.

3. Other Tools: New York City’s cordon pricing proposal included a recommendation for a residential parking-permit program and monitoring of its results to prevent residents of outer neighborhoods from driving into and parking in communities just outside the cordon to avoid the cordon fees.

I think this is an interesting consideration for transportation planning. Certainly you don’t want to capture the benefits of congestion pricing at the cost of crippling the lower income families that live on the edges of the region.

I think, however, that the best long term approach is a combination of tactics #1 and #2 listed above. First, use some of the surplus revenue generated by peak hour travel charges to fund better commuter transit service. If you can develop transit-oriented centers throughout your region, places like Westchase and Greenspoint could offer access to both appreciably cheaper housing, plenty of employment, and a quick commute into other major employment centers.

Congestion pricing would almost guaruntee a long-term shift away from the “drive-till-you-qualify” habit, and therefore not constitute any kind of permanent encumberence on the ‘working class.’ However, the concern is over the impact in the short term, particularly in families that have recently settled in the fringe and who cannot afford to consider moving again any time soon. In these cases I think a San Francisco type approach where you offer limited discounts based on a set of qualifications (such as household income and home ownership) makes a lot of sense.

This is definitely something to keep an eye on. While people routinely complain about the evils of toll roads, the reality is market-pricing of roadways is the simplest, most effective measure we could take to dramatically reduce congestion in our cities, and is the best and most equitable way to address the serious budget shortfalls every Department of Transportation in the nation is facing right now.