Matt Yglesias

Cities Charging for all the Wrong Things

It’s not surprising to learn that cities across the country are responding to recession-induced revenue shortfalls by raising all kinds of fees. It is, however, disappointing to see which fees are being raised. Economists have long argued that certain kinds of fees, such as congestion charges for accessing crowded roads at peak hours, or higher parking rates in scarce-parking areas, could do a lot to improve life in many American cities, towns, and suburbs. But status quo bias and political reluctance to embrace revenue-raisers has lager deterred politicians from seeking such fees. A dramatic financial crunch that makes painful measures absolutely necessary would seem to be the ideal time to impose some fees that, though people are initially skeptical, would ultimately prove broadly beneficial. Instead we’re getting stuff like this:

After her sport utility vehicle sideswiped a van in early February, Shirley Kimel was amazed at how quickly a handful of police officers and firefighters in Winter Haven, Fla., showed up. But a real shock came a week later, when a letter arrived from the city billing her $316 for the cost of responding to the accident.

It just doesn’t make sense to be looking to this sort of thing in the first instance when so many more appealing possible sources of revenue are still on the table.

Driving Down Slightly, Congestion Down Dramatically

At the CEOs for Cities blog they’re observing that last year the United States saw a dramatic decline in the volume of traffic congestion driven by a modest decline in total vehicle-miles traveled:

New data show that in 2008 the amount of traffic congestion in the nation’s cities declined by 30 percent, and that congestion was lower in every hour of every day in 2008 than it had been the year previously. How did we make these big gains? Not by adding more highway lanes or transit—the physical infrastructure barely changed—we did it with a very modest decline in car travel. On urban interstate highways, total vehicle miles traveled in the US declined by about 3 percent in 2008.

Part of what’s notable about this is that the decline in congestion is gigantic relative to the decline in driving. This is because:

[T]raffic congestion is subject to a tipping point–what economists call non-linearities. Add an additional car to a crowded road at rush hour, and traffic slows down a bit, and then the “carrying capacity” of the road declines. Traffic engineers estimate that most roads carry their maximum throughput — number of vehicles per hour at about 40 miles per hour — so as traffic slows below that speed, the road actually loses capacity and goes slower and slower, producing a traffic jam.

Basically, what we saw last year was this same tipping point in reverse. To tackle America’s congestion problem by building new roads would be hideously expensive, not workable at all in many metro areas (where’s little-to-no space to add roads), and almost certainly futile over the long run. But what this natural experiment suggests is that to tackle congestion with “demand management” policies such as congestion pricing and market-rate parking would be relatively easy. In other words, you would only need to decrease the volume of peak-hour traffic by a pretty modest amount in order to produce a dramatic gain in the ease with which traffic flows. Meanwhile, the modest charge would generate some revenues that could be used for public purposes.

Advocacy of congestion pricing of roads has come to be associated with a more general movement for a reinvigoration of pedestrian- and transit-oriented lifestyles, but in many respects this is misplaced. I live in a walkable, transit-accessible neighborhood in a central city. I don’t own a car and get around on foot, on bike, on bus, or on Metro. Consequently, it doesn’t really bother me if other people have unnecessarily long commutes. Ultimately, neither drivers nor non-drivers benefit from bad policy that causes unnecessary traffic jams and inconvenience, but it’s regular car commuters who are paying the highest price.

The Virtues of Crowded Transit

Ryan Avent reads a Federal Transit Administration study on that compares emissions and energy use per passenger mile across different transportation modes. Not surprisingly, it shows that transit does better than personal automobiles in both a per-mile and lifecycle (i.e., thinking about the energy that goes into production and deployment) point of view:

But a couple of interesting things stand out. One is that increasing transit ridership has a dramatic effect on average emissions, especially for buses. The reason, of course, is that a lot of carbon is emitted setting up and running a train or a bus, but very little additional carbon is emitted as riders are added. The get the most emission savings out of the technology, then, you want to run transit pretty full. And the other thing that stands out is that, according to research cited by the FTA, the effect that transit has on land-use produces twice the reduction in emissions as the mode shift itself.

What this means is that if you’re interested in reducing the nation’s carbon emissions, you ought to be interested in building new transit. But what it also suggests is that just laying the tracks or buying the buses, and doing nothing else insitutionally, is leaving most of the potential carbon savings from transit on the table. You also need to work to maximize ridership, by eliminating silly automobile subsidies, for instance (like free parking and underpriced roads), or by making your system easier to use (by partnering with Google Transit). And you need to allow transit to shape development around stations, by changing zoning rules and street patterns (as Tysons Corner intends to do), and by facilitating density in other ways (like ensuring that NIMBYism doesn’t stand in the way of quality, dense, developments).

One thing to say about this is that it highlights why it would be a good idea to get our fare-setting policies right. Currently, pretty much every transit agency I’m aware of receives a public subsidy that leaves it dependent on using fare collection as a source of revenue. This is a mistake. The fixed costs of quality transit construction are high, but the marginal costs of carrying additional passengers are very low, and the public goods associated with transit use are higher when more people use transit. Ideally, then, fares on uncrowded bus or rail lines should be very low or even non-existent. Fares should come into play when an at-capacity transit line is in danger of becoming overcrowded. For example, the portion of downtown Washington DC where the Orange and Blue lines run on the same track is, during rush hour, extremely crowded even given the fairly high fare. Under the circumstances, reducing fares would be counterproductive and possibly dangerous. But when crowding isn’t an issue, use should be encouraged through fares that are as low as possible.

And of course much the same principle applies to roads. Roads that are prone to overcrowding ought to have fees associated with them that are designed to bring the congestion under control. And other roads — or the same roads at uncrowded times — ought to be free.

The Driver’s Case for Congestion Pricing

Like normal people, when I’m in New York City I don’t drive anywhere. But last time I was in New York City, things were such that it seemed sharing a cab ride to JFK airport would be the best way to go. Unfortunately for me, it was rush hour and as a result there was a ton of traffic and the whole thing took forever.

That did, however, give me plenty of time to reflect on what I think has been one of the major oddities about the conversation on congestion pricing. Namely, that I don’t really understand why this has normally been construed as an “anti-driving” or “anti-driver” policy initiative. At the end of the day, folks with pedestrian-, cycling-, or transit-oriented lives in a city like New York or Washington have relatively little at stake when it comes to adopting a sensible policy approach to congestion. By contrast, people who commute every day to and from work in congestion heavy cities would benefit a lot from policies that reduce the amount of traffic they deal with on a daily basis. It’s true of course that habitual auto commuters would be paying the bulk of the direct financial cost of such a policy, but they’d also be receiving the vast majority of the benefits. Maybe some people just think sitting in traffic is awesome, but personally it seems terrible to me.

Looking back on the New York congestion pricing fight, it really seems as if the whole thing got somewhat misframed as of a piece with Jeanette Sadik-Khan’s efforts to make the city less car-oriented. In fact, that’s really quite a separate debate. The case for congestion pricing is simply that if you have a valuable, scare resource like “space on a road in a major urban area at peak traffic time” you need to price that resource appropriate (i.e., at something more than $0.00) or else it will get consumed inefficiently and you’ll have endless traffic jams. That case holds up whether you think cities should look like Copenhagen or whether you think they should look like Phoenix and really has nothing to do with urbanism per se.