Why oppose the congestion charge?

By Felix Salmon
June 2, 2010
idea with remarkable unanimity, at least in theory if not in the exact form that any given proposal might take. Libertarians, for example, quite like the idea of pricing externalities to avoid the tragedy of the commons -- they tend to the econogeeky that way.

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I’m having quite a lot of difficulty coming up with someone to take the anti-congestion-pricing stance in the debate that I’m taping at Reuters in Times Square tomorrow. Policy wonks from left to right seem to like the idea with remarkable unanimity, at least in theory if not in the exact form that any given proposal might take. Libertarians, for example, quite like the idea of pricing externalities to avoid the tragedy of the commons — they tend to the econogeeky that way.

For me, the strongest argument against a congestion charge is that there’s a decent chance that it will be a very expensive way of achieving not very much. After all, there are lots of urban planning ideas which work in theory but not in practice. Mark Ambinder has a good interview with Joe Flood, who wrote a whole book about how a bunch of geeks from the RAND Corporation managed to persuade New York authorities in the 1970s that shutting down fire stations wouldn’t result in more fires. They were disastrously wrong.

More recently, notes Flood, the Bloomberg administration ran all manner of studies designed to demonstrate that the Atlantic Yards project in Brooklyn would create jobs and tax revenue, rather than lose money for the city.

If I have any skepticism about the wonders of congestion pricing, it’s in the gap between theory and reality: to talk to someone like Charles Komanoff, it’s easy to come away believing that just about everybody will win. Drivers will get faster commutes, bus riders won’t pay fares and will travel faster, subway riders will save money — what’s not to like?

But as my previous article for Wired showed, there’s always model risk, and it’s impossible to price. Empirical evidence from London is mixed: the quantity of traffic is down, and revenues are up, but the speed of traffic doesn’t seem to have increased very much, and the initial gains seem to be eroding over time. Even Komanoff expects something similar to happen in New York: in order to keep congestion constant, the congestion charge is going to have to rise at a pretty substantial rate, pretty much in perpetuity. No matter where it starts, be it $8 or $16 or something else, it’s certain to get higher pretty quickly.

What’s more, there’s no doubt that a congestion charge is politically unpopular, especially in the outer boroughs: people see only what they would pay, and not what they would save — especially when, as with the Bloomberg plan, there’s no decrease in transit fares.

But if someone has stronger arguments against the congestion charge, let me know — especially if you’re free at noon on Wednesday.

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9 comments so far

This isn’t so much an argument as a concern. When you draw a line and charge money to cross it in a car, you don’t just change traffic patterns. You change optimal land use. What if the best use of the land just outside the boundary becomes “parking lot”? Will you see a ring of parking lots around the congestion-priced zone? You can understand why outer-borough residents might not like that prospect even if they get free bus rides.

The effects probably wouldn’t be that dire, but there might be other unintended consequences. For instance, if the largest constraint on sprawl is the length of commute, and the commute is reduced, will we see more sprawl?

And more directly, if you have peak and non-peak prices, would we have a bunch of trucks idling in the outer boroughs each day, waiting for the price to drop? That’s arguably good from the point of view of Manhattan (it keeps the trucks off of the island during high-traffic periods), but it’s obviously not what the outer boroughs want to see.

Posted by minderbender | Report as abusive

To put it another way, say you own land near an outer-borough subway stop. Right now you lease it to a coffee shop, a dry cleaner, a bagel store, etc. These businesses are exactly what commuters want to pass on their walk to the subway station, and they make the neighborhood walkable and functional.

Now it costs $16 to drive into Manhattan and everyone is looking for a parking space near a subway stop outside of Manhattan (especially if subway rides are free!). You realize you can make more money with a massive parking structure than you can leasing your real estate to the coffee shop, dry cleaner, etc. Local residents, who live near the subway stop, lose out. Now they walk past a monolithic concrete wall on their way to work. And car traffic is way up around outer-borough subway stops, some of which were formerly anchors of walkable neighborhoods.

Again, I don’t things will be this dire. But it’s something to think about before launching the grand experiment.

Posted by minderbender | Report as abusive

Is there something inherently unfair about charging for vehicle access to the most expensive region of the city? Will it increase segregation? The price-point for congestion charges suggested by Komanoff, Bloomberg, and your future predictions are effectively negligible for anyone on the other side of a certain threshold of wealth. So those charges won’t affect their behavior at all. Is it possible that congestion charges squeeze out the middle (class) who can’t afford the charges, but also aren’t easily able to convert to using public transit?

Perhaps these questions become more relevant when looking beyond New York City to other metros that aren’t as integrated — Chicago, Philadelphia, DC, Los Angeles?

Posted by brooklyncam | Report as abusive

When you say “there’s always model risk, and it’s impossible to price”, does this imply you don’t think prediction markets have any value, or just that there aren’t any for this kind of question yet?

Posted by Dagon | Report as abusive

If you don’t think it works, go to Singapore.

Posted by crocodilechuck | Report as abusive

Singapore is exactly the issue. Police states ‘work’, too, but we don’t want to be a police state. We don’t like segregating public space by income, race or gender, either. The status quo ante of rationing by inconvenience may in fact be the best policy.

Posted by wcw | Report as abusive

I agree with minderbender that the area just outside of the cordon is probably your best bet in terms of finding problems. Expect more congestion on the BQE, the Tri-boro bridge, and maybe the GW bridge; also, to some extent, Staten Island. (This is fairly easy to deal with if you use the complicated system where everyone has GPS units. With the simpler systems, though, you’re always drawing hard boundaries in space and time, and that’s where marginal incentives are most screwed up.)

You might have to raise the price to $40 once it becomes attractive to pay $16 to cut through the CBD because congestion there is so much less than going around the edge.

People who live in the CBD and keep cars there will add to congestion without paying the fee. People who live just inside the cordon will be pissed off, especially if they like to go grocery shopping just outside the cordon. Before parking lots are built just outside the cordon, street parking will be absolutely brutal there, and perhaps near subway stops outside the cordon as well. “Free” has a magical impact on consumers, and “free” transit may attract far more riders than we even expect; if you don’t buy a bunch of new buses and upgrade the subway’s power system (and probably get new subway cars) the subways in particular could well slow down, in addition to being crowded. I wonder whether people would find ways of evading detection as they sneak past the cordon. How do you deal with people who accidentally (for one reason or another) find themselves crossing the cordon? One version of the previous proposal had anyone who didn’t pay in advance charged very large fines, which seemed particularly unreasonable if you’re dealing with some out-of-towner who got lost in Harlem.

I’ll try to come up with something else before 11:30, but I won’t post here unless I get something substantially different from what I’ve spewed out above.

Posted by dWj | Report as abusive

Oppose the charge for the same reason one would oppose any tax imposed by the state that does not create value. The fee is a method of rationing, but why should it be in the form of monetary compensation to the state? There are many other methods of rationing scarce road space available. The reason for utilizing a fee is obviously because it transfers wealth to the state.

Why not charge an individual fee for faster fire and police service?

Posted by inboulder | Report as abusive

I am glad I was able to “bail out” Felix and serve as the rational voice on (against) the congestion tax. Folks looking for more information can simply check out http://www.keepnycfree.com.
While I agree strongly with Felix’s statement, “the strongest argument against a congestion charge is that there’s a decent chance that it will be a very expensive way of achieving not very much,” I always stress the unfairness and inequity of the proposal. Keep NYC Free outlined fairer (and sensible) proposals.

Posted by CoreyB18 | Report as abusive
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