If highways push traffic onto local roads, why not toll them too?

Peter Gordon blogs about a paper he presented at the Transportation Research Board conference in DC:

My friends and I just presented this paper at the Transportation Research Board meetings in Washington DC. We tested the effects of tolling Los Angeles’ freeways in the peak hours (we tested 10 cents and 30 cents per mile). It’s a simulation on a real network and many substitutions occur. As expected, peak-hour freeway speeds increase, some people switch to surface streets and that traffic slows, some switch to off-peak hours and some (very few) travel less. And politicians take in a lot of money! That’s for the 10-cent toll. The 30-cent toll overloads the surface streets. Many other options can be tested, including only tolling some of the freeways. Planners have voiced concern that tolling the freeways would overload surface streets. There is probably a “sweet spot” that can easily be found. We also plan to look for effects on freight travel as well as travel by income groups.

He’s established that “very few” people lessen their travel. And if the the number of people who switch to off-peak hours is small compared to the number of people who move to surface streets (and judging from my very cursory perusal of the paper, it seems like this is the case), then tolling is just shifting the burden from highways to local roads. This could be a problem since local roads, unlike highways, are paid for almost entirely out of general revenue, not user fees. It seems like the rational thing to do at this point is to argue for tolling local surface streets as well, perhaps through a congestion charge. Maybe I missed it (like I said, I didn’t read the presentation paper thoroughly), but his talk of a “sweet spot” in the summary makes me think he didn’t consider tolling local roads to be an option.

Bloomberg pokes (again) at hornet’s nest of entitled drivers

The New York Daily News broke the story yesterday that New York lawmakers are once again trying to push congestion pricing through the state legislature, a task at which Mayor Michael Bloomberg failed in 2008 after meeting fierce resistance from outer borough and suburban drivers. Learning from his previous failed bid to charge drivers $8/day to enter Manhattan below 60th Street, the plan is being rebranded as “traffic pricing” and will be linked to payroll tax relief for those outside the five boroughs in an attempt to win the support of suburban legislators who torpedoed the 2008 proposal.

Despite being the most transit-saturated city in America, New York City drivers have had free reign of its surface streets since the days when they were maintained by private streetcar companies. Unlike highway users and transit riders, drivers have never been asked to pay a penny in direct fees for the local roads they use. This has created generations of Americans who feel entitled to freeride on the backs of their poorer, car-less fellow citizens, which has made congestion pricing one of Bloomberg’s rare failures during his decade-long tenure as mayor.

New York State Senate Majority Leader Dean Skelos (R-Nassau County) calls it “just another tax,” but it differs from a general tax in one critical way: It is levied solely on those who drive in Manhattan, meaning that it does not redistribute wealth from those who don’t use the roads to those who do. And while the accounting costs for modes of transportation are subsidized to some extent, roads have enormous opportunity costs—far higher than transit, which uses relatively marginal underground land and has a minuscule footprint relative to paved roads. Land is extremely expensive in New York City, so these opportunity costs are larger than they might be out in less dense areas—imagine how much the city could get from auctioning off the land beneath the West Side Highway, and you start to get an idea of the magnitude of these subsidies.

Congestion pricing has been in place for a few years now in London, Copenhagen, and Singapore (cities you may never have heard of, since they were vaporized the instant they started charging for the right to drive), but the motorist lobby in America has so far managed to stave off any attempts to make local road users pay their fair share. San Francisco is mulling over a congestion charge as well, so it’s a race between the nation’s two most notoriously leftist cities to see which one will de-socialize its local roads first.

Links

1. Laneway housing, Vancouver vs. Toronto.

2. New York state lawmakers want to ban using a phone or listening to headphones while crossing streets. Unfortunately for us pedestrians, there are very few limited access, grade-separated walkways, so in essence this would criminalize listening to an iPod while walking.

3. An interesting article about transportation in Singapore, with an emphasis on congestion pricing and other ways of recouping the enormous opportunity costs of urban roads.

4. I’ve been aware of this for a while, but it still shocks me every time (emphasis mine):

We know New Yorkers are being injured and killed just about every day. (Like the 35-year-old woman who was run over by a dump truck on the Upper East Side Monday while legally crossing the street. Did you hear about that one? The dump truck driver stayed at the scene and wasn’t drunk, so it was basically a freebie for him — a clean, legal kill as far as the NYPD is concerned. Can you imagine if she were your wife or sister or colleague? Anyway… back to those damned bikes, right?…)

5. Yet another example of why I don’t think the Texas Transportation Institute’s congestion metrics are useful.

6. As if we needed any more proof: Big cities are inherently green.

London congestion pricing, then and now

It’s already Sunday and I’ve exhausted my cache of unread blog posts from the week, so I went in search of new blogs to read and can across this really good one: Spatial Analysis. A post from December has this set of maps – private turnpikes in 18th century London and the congestion zone map in the 21st:

It looks to me like the old map is skewed and that they are actually quite similar, but I’m having trouble aligning them – maybe someone who knows London better than me could compare them for us?

Again, that’s from spatialanalysis.co.uk.

Friday link list

Expect a lot more of these…

1. Beijing tries to relieve congestion by…building a quarter-million parking new spaces and 125 miles of new downtown streets?! But don’t worry – bike sharing!

2. Seattle inches closer to a Shoupian on-street parking policy, and Austin ponders charging for on-street parking after dark and on Saturdays. My favorite comment from the Seattle story is this one: “Get rid of the illegal aliens and we will have LOTS of room to park! And plenty money! Sanctuary idiots!” I guess that was one positive aspect of the Holocaust: more parking! (Oops, did I just Godwin this blog?)

3. East (a.k.a. Spanish) Harlem wants to develop its transit-accessible parking lots and fill them with “low- and middle-income residents” to aid in its “struggl[e] to maintain its affordable housing stock,” but of course “they want to prevent the construction of large apartment towers.” Sorry, East Harlem – you can’t have your cake and eat it too.

4. As if we needed any more evidence that diverting police officers for voluntary bag searches in the DC Metro was an absurd idea.

5. A Green candidate for London mayor has proposed expanding the area that the congestion charge covers, build tiers in, and raise prices to the point where entering the innermost part of London would cost drivers £50/day (!!). As long as we don’t end up on the right-hand side of the Laffer curve – that is, as long as the city can raise more revenue at £50/day than it could at any lower price – I think this would be a step in the direction of market urbanism, since it would emulate the behavior of a profit-seeking road firm. (One way of testing that is to raise the charge gradually and to stop once total revenue starts to fall.) Of course, no Green is going to be elected mayor of London, but it’s nice to at least see mainstream papers reporting the idea.

Making-driving-more-expensive link minilist

These seemed not quite fleshed-out enough for their own post, but too important to be buried along with other links.

1. San Francisco is considering a congestion charge plan that would either cover the whole city during rush hour, or just the northeastern quadrant (or possibly a mix of the two), for what looks like a maximum of $6/day. Considering that local roads are rarely paid out of user fees, at this point any move towards making local roads more expensive would be a move towards a market equilibrium. The fact that much of “this money” would be spent on transit and non-road improvements is an irrelevant accounting trick, since money is fungible and so much road spending is already coming out of general revenues. And yet, I wouldn’t hold your breath for libertarian or small-government conservative support of this plan.

2. Sens. Tom Carper and George Voinovich have called for a 25¢ increase of the federal gas tax, which is 10¢ higher than the maximum increase recommended in any of the Bowles-Simpson plans. Voinovich, the token Republican signing the letter, is retiring from the Senate in 2011. The Hill notes that the proposal “seems likely to face staunch opposition from Republicans, many of whom ran on a firm anti-tax increase pledge.” Nevermind that the gas “tax” is technically a user fee and not a tax, and that keeping it artificially low without reducing road spending amounts to a subsidy for automobile drivers – Tea Partiers obviously don’t think with that level of nuance.

Weekend links

Links, links, links!

1. The Washington City Paper has a great expose on street food in DC called “Inside D.C.’s Food-Truck Wars” with the subtitle “How some of Washington’s most powerful interests are trying to curb the city’s most popular new cuisine.”

2. Mary Newsom at the Charlotte Observer thinks it’s a bad thing that Charlotte allowed so much density around its wildly popular new light rail line because it’s driving up property values. The Overhead Wire says that this is natural when land is scarce, and that “if you built all the [proposed] lines at once, that pressure gets relieved five or six ways instead of one way.” This is to some extent true, but another solution to the scarcity of transit-oriented property is to allow more even development around the existing line by loosening zoning and parking rules.

3. Ryan Avent finds research that finds that congestion pricing in Stockholm, where citizens voted on the plan after a seven-month test period, became more popular after they experienced it. Then again, congestion pricing in New York and elsewhere depends not only on people living in the city, but also people living outside of it, who are much less likely to warm up to it. Also, it looks like Stockholm expanded transit (mostly bus) service along with congestion pricing.

4. The pilot private van initiative in NYC that we discussed earlier has been floundering, and Cap’n Transit has been all over it. Literally every post on the front page of his blog is about it. There seem to be many reasons for the vans’ failure, and I might write something on it in the future, but in the meantime read Cap’n Transit if you’re interested.

5. Philadelphia Inquirer architecture critic Inga Saffron praises recently-fired Philadelphia Housing Authority boss Carl Greene’s successes in razing decrepit high-rise housing projects and replacing them with low-rises, and boasts that “PHA houses cost about the same to build as private houses.” But if that’s true, then what’s the point in owning buildings directly in the first place? If you’re not going to produce at lower prices than the market and you’re tearing down your properties anyway, then why not just sell them off to developers and give the displaced residents vouchers to live where they want?

How Pricing Tolls Right Eliminates Congestion

Chris Bradford over at Austin Contrarian has been making some solid points in favor of congestion pricing. (here, here, here and here)  Chris’s core argument in favor of congestion tolling is that:

congestion pricing does more than relieve congestion.  Congestion pricing tells us when a road needs more capacity.  Additional capacity costs money, and drivers are willing to pay only so much for it.  That “so much” is exactly equal to the price they are willing to pay to avoid congestion.

The idea that toll profits send a signal to road operators to produce additional capacity is often neglected in discussions of the benefits of congestion pricing.  Without pricing, the only signal is the manifestation of congestion itself.  This is problematic, as the only solution is to build more roads when congestion is observed.  Actually if done right, years before congestion occurs with the help of foresight and luck on the part of transportation planners and agencies.  This problem feeds the dangerous new highway –> sprawl –> congestion –> highway expansion –> sprawl, etc., etc. positive feedback loop.  This feedback loop is quite a powerful mechanism that helps drive the unhealthy types of sprawl.

Chris is on the right track, but sets a sub-ideal objective (in my opinion) when he says:

The optimal congestion toll should be set just high enough to achieve free-flow (45 mph) traffic.

Since the goal should not only be to avoid congestion, but to get the highest number of commuters through the system as possible, I would restate that as:

The optimal congestion toll should be set at exactly the price that maximizes traffic flow.

As Chris said, “Congestion pricing is hard.”  Although it seems complicated, you might be shocked at how easy it is, in concept, to price roads optimally.  That’s because it’s somewhat counter-intuitive: flow is maximized if revenue is maximized.  (it’s approximately true, the variance is negligible enough that it’s not significant in practice.)

I’ll say it again, flow is maximized if revenue is maximized.  Don’t believe me?  OK, I’ll have to convince you rationally.

First, and most importantly, you have to understand some basic traffic engineering concepts.  (as a structural engineering student, I always assumed I’d never use anything I learned in the required traffic engineering course…)  The simplest explanation is using the fundamental diagram of traffic flow:

wikimedia

Looking at the third diagram, we see that traffic flow peaks (Qmax) at a particular density of traffic, D (cars/km) before reducing due to congestion.  This makes sense if you consider that in gridlock, despite a high density of cars on the road, not many cars are actually passing though a particular point.  Thus, a toll is optimal if it is priced to achieve maximum possible traffic flow, Qmax and maximum velocity Vc from the second diagram.  When a toll is introduced to a congested road, a certain number of drivers are incentivized away by the toll, which decreases traffic density (D) to a point where those who are left, travel more quickly, than if those drivers had simply added to congestion.

It is much simpler to understand the revenue concept:

Revenue ($/hour) = Toll ($/car) x Traffic Flow Q (car/hour)

Thus, the revenue is (approximately) maximized when maximum traffic flow is achieved.  (I say approximately because, the optimal toll is slightly higher because of the elasticity of toll pricing, but I think there there are more upsides than down of charging a tinsy bit more than for Qmax, even if it turns out to be significant)  One can maximize revenue by carefully selecting the optimal toll for the road at a given time.  We can derive with calculus, but I’ll steer us clear of calculus in this blog unless a reader really, really wants to challenge me on this.

So, we can conclude that traffic flow can only be maximized by carefully pricing the roads.  If the toll road operator charged a toll one dollar more than optimal, we can see that traffic density (D) will move to the left of the dashed line going through Qmax (into the free flow area), traffic flow would be drastically cut, and revenue would be reduced accordingly.  If the toll road operator charged a dollar less than optimal, traffic density (D) will move to the right of the dashed line into the congestion area, which will also reduce flow and revenue.  The trick is to be able to price the tolls correctly and dynamically, while maintaining price predictability to keep commuters loyal.

Next, I plan to discuss why the private sector is better equipped to get this tricky optimal pricing mechanism right.  I hope to follow that up with a discussion of the other economic, social and environmental benefits of congestion pricing, as well as dispelling some of the Urban[ism] Legends surrounding congestion pricing and private roadways.  (as time permits between feedings of the little guy)  Stay tuned…