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Congestion Pricing May Change the Way the United States Thinks About Land Use Transportation Impacts

America’s two largest cities are on the road to implementing congestion pricing, which would charge drivers a fee to enter certain areas in an effort to reduce traffic jams and the adverse environmental effects associated with them. New York City intends to implement a toll for traveling below 60th Street, while the City of Los Angeles is studying the effects of charging drivers to enter an area of West Los Angeles and Santa Monica just west of the 405 freeway and north of the 10 Freeway. Both plans are focused on high-traffic areas, and would use revenue from the tolls to fund public transportation.


Congestion pricing creates a surcharge for drivers in certain heavily trafficked areas, in an effort to reduce gridlock and its attendant carbon emissions. Four general types of congestion pricing are in use world-wide: 1) a cordon area with charges for crossing the cordon line; 2) area-wide congestion pricing; 3) a city-center toll ring, with toll collection surrounding the city; and 4) corridor or single facility congestion pricing, where access to a lane or facility is priced. Implementation of congestion pricing has successfully reduced traffic in urban areas, but not without controversy. Critics assert that congestion pricing disproportionately impacts lower-income workers, places an economic burden on areas just outside a congestion pricing zone, negatively effects retail businesses and economic activity in the area, and represents an increased tax on individuals who live or work in heavily populated areas.

Singapore became the first place in the world to institute congestion pricing in 1998. The system uses open road tolling, which does not require vehicles to stop in order to pay tolls. Rather, all roads linking into Singapore’s Central Area include gantries which read devices affixed to windshields. Those devices are linked to cash cards, which can be reloaded by drivers. Singapore’s Land Transportation Authority reports that road traffic has decreased by nearly 25,000 vehicles during peak hours, with average road speeds increasing by roughly twenty percent since implementation of the system.

London adopted a congestion charge on weekdays in Central London in 2003, and its congestion charge zone remains one of the largest in the world. The city charges £ 11.50 a day for any non-exempt vehicle entering the zone, with funds contributing to public transit improvements. As of 2013, only electric cars, hybrids, and low-emission vehicles can qualify for an exemption. Enforcement uses automatic number plate recognition technology. As of 2013, Transport for London reports that the congestion pricing scheme has resulted in a 10% reduction in traffic volumes from baseline conditions. Despite this, traffic speeds have continued to decrease over the period since congestion pricing was implemented.

Stockholm instituted a congestion tax on a permanent basis in 2007 encompassing essentially the entire Stockholm City Centre, with the charge depending on the time of day a motorist enters or exists the congestion tax area. A study conducted in 2012 showed a decrease in congestion and increased use of local public transportation.

Milan began a one-year trial program in congestion pricing in 2008. The initial Ecopass program was in place until December 31, 2011, and was replaced with the Area C congestion charge in January 2012. Vehicles entering the Area C charging zone incur a charge of € 5, with residents of the area receiving 40 free entries a year, and then a discounted charge of € 2 for subsequent entries. Electric vehicles, public utility vehicles, police and emergencies vehicles, buses and taxis are exempt from the charge, and all net earnings are invested to promote sustainable mobility and reduce air pollution. As of July 2015, the average number of cars entering the restricted area was nearly thirty percent less than during the same period in 2011. A study published in the Journal of Urban Economics estimated the welfare gain produced from air pollution reductions alone is around $3 billion.

New York City’s Proposal

A New York State budget approved on March 31, 2019 included a plan to implement congestion pricing in Manhattan. The proposal would create the first congestion pricing scheme in the United States, imposing a toll on vehicles traveling below 60th Street. The approved plan deferred many controversial decisions, including the pricing scheme and who may be entitled to exemptions, delegating that authority to the Triborough Bridge and Tunnel Authority and a newly created traffic mobility review board. Eighty percent of the revenue generated by tolls is earmarked for the city’s subway and bus network, with the remaining twenty percent split evenly between the Long Island Rail Road and the Metro-North Railroad.

The proceeds are intended to enable those entities to modernize public transit throughout the New York metropolitan area, with an aim towards reducing congestion and pollution in the nation’s largest city. The proposal gained legislative approval with the support of environmentalists as well as transit riders who face increasingly antiquated and unreliable public transit options. Without congestion pricing, Governor Andrew Cuomo has predicted that subway and bus fares could rise by 30 percent.

The plan is unlikely to take effect until 2021, and will likely face opposition from suburban commuters, as well as questions about the impacts on low-income residents and the disabled.

The Los Angeles Study

The Southern California Association of Governments released a study on March 28 suggested that charging drivers $4 to enter an area west of the 405 freeway and north of the 10 freeway could reduce traffic jams and speed up commute times through one of the most heavily traveled areas of the Los Angeles metropolitan area. The study proposed limiting congestion pricing to a 4.3 square mile area during weekday rush hours, finding this could reduce traffic delays and miles driven in the area by more than twenty percent. The study indicates such a decrease in driving would lead to a nine percent increase in transit ridership, a seven percent increase in biking, and a seven percent increase in walking within the zone.

Before congestion pricing could be implemented, California law would need to be changed to allow tolling on surface streets, and a massive public outreach campaign would need to be undertaken to garner support. SCAG initially considered studying the impact of congestion pricing in downtown Los Angeles, Santa Monica, Hollywood, West Hollywood, and the area around the Los Angeles International Airport, but focused on the Westside because traffic is the worst in that region. Los Angeles City Councilman Mike Bonin, who represents the district containing the proposed-congestion pricing zone, indicated immediate skepticism for the plan, pointing out that Los Angeles does not have high-quality public transit alternatives, and that his constituents have the means, resources, and time to oppose implementation of a congestion pricing scheme. Polling suggests support for congestion pricing is only at forty percent currently.

The study proposes charging vehicles that drive in and out multiple times only once per day, and waiving charges to leave the area. While there is no timeline for implementing the study’s proposal—or even introducing a legislative plan to allow for congestion pricing—the study is an early step towards addressing traffic and pollution in one of the nation’s most persistent car cultures.

Conclusion and Implications

Growing concerns about pollution and carbon emissions, coupled with increasing commute times and climbing housing prices in major American cities make the implementation of some form of congestion pricing inevitable. New York City is on track to become the first city in the nation to implement congestion pricing, which will allow other major metropolitan areas to observe that scheme’s effectiveness and learn from the city’s experience mainstreaming congestion pricing for its residents. Congestion pricing is proven to reduce both traffic and emissions in cities around the world, and will also raise revenue which can be invested in both public transit options and carbon emissions reduction programs.

(Jordan Ferguson)