Do All Roads Lead to Congestion Pricing?

Do All Roads Lead to Congestion Pricing?

Portland, Oregon, and New York are taking different routes to charging drivers who need to get downtown during the rush hour. They’ll also have to think hard about the impacts on low-income residents.

March 26, 2019

This article is a preview of the Spring 2019 issue of The American Prospect magazine. Subscribe here

On Monday, New York state legislative leaders effectively agreed that congestion pricing is only way to solve the New York City transit crisis. The plan, likely to be the first of its kind in the country, would charge drivers a fee to access Midtown Manhattan and funnel billions into a massive effort to overhaul 115-year-old New York City subway system, improve bus service, and provide other long-over due upgrades. With an April 1 deadline to deliver a plan that can be incorporated into the state budget, state lawmakers will have to move quickly to resolve outstanding questions about specific rates and possible exemptions and discounts—issues which for the moment remain murky. This article considers the challenges congestion pricing poses for Portland and New York.


Portland, Oregon, should be a prime candidate for congestion pricing. The compact city is politically progressive, eco-conscious, bike-friendly, and choked by traffic. But cars still rule the roads in Oregon, and too many people driving alone in rush hour in one of country’s fastest-growing metropolitan areas means that Portland now ranks tenth in congestion nationwide. Like their brethren in the New York megalopolis, area residents now get to waste hours in traffic jams.

One remedy for car-clogged cities is congestion pricing, charging drivers a fixed or fluctuating fee to access roads prone to rush-hour backups. The interest in pricing access to roads has only intensified as federal funding evaporates for transit improvements and decaying infrastructure, and traffic jams bleed beyond rush hours into weekend and holiday travel. Pricing frameworks come in several flavors, but the goals are the same: to persuade people to change their driving habits by using alternative routes, changing travel times, doubling up, or using mass transit or other transportation options during peak driving times.

The most common type of congestion pricing in the U.S. is high-occupancy toll, or HOT, lanes, variably priced lanes like Interstate 15 in San Diego or Interstate 66 in Northern Virginia. These roads reward certain behaviors (carpooling) while penalizing other types (driving alone). Pricing strategies also include variable tolls on bridges or highways and “cordon pricing,” a fixed (or variable) rate to enter a congested urban district like Central London.

The explosive popularity of city centers comes at a price. Drivers can no longer think of road travel as a something-for-nothing proposition. Paying a charge to get downtown encourages people to make different choices. One major challenge is minimizing the burden on poor and low- and middle-income people whose commuting choices are constrained by finances, distance from city centers, and limited public-transportation options—equity must be baked in from the start. Another is persuading financially strapped commuters and risk-averse politicians to support the idea.

New York, where most people, including low-income residents, use public transportation, is moving toward cordon pricing—charging motorists to enter a center-city area—to disgorge traffic from downtown Manhattan. The Portland metro area is assessing how highway tolling might reduce congestion and protracted commutes without penalizing low-income drivers who spend more time behind the wheel than low-income New Yorkers.

There are political storms in the offing on the coasts. State lawmakers from the New York City metro area are divided on the merits of congestion pricing, which must be approved by the state legislature. In metro Portland, there is a growing divide between groups who support highway expansions and ones convinced that congestion pricing is the best way to persuade people to think differently about driving in a state where paying tolls is a rarity. London’s congestion-pricing scheme, launched in 2003, offers important lessons for New York, Portland, and other American cities.


WHEN KEN LIVINGSTONE proposed a congestion charge during his campaign for mayor of London in 2000, he conceded that his plan had its roots in the work of conservative economists like Milton Friedman and the Thatcherite right. But it was a measure of just how bad London traffic had gotten that a Labour politician, and a left-winger at that, supported what was in effect a flat tax that allowed more-affluent people to pay for the privilege of convenience. The Economist called congestion pricing “politically dangerous.” Livingstone had to face down a legal challenge before implementing a charge of £5.00 (currently about $7.00) on cars entering a center city “cordon zone.”

Although more higher-income people drive into London and more poor people take buses, other middle-income earners like teachers, small-business owners, and medical professionals who make home visits also drive, The Guardian noted shortly before the charge went into effect. Residents living in or very close to the cordon zone get a 90 percent discount, and equity measures include exemptions for disabled people.

Transport for London, the city’s transit agency, put hundreds of extra buses on the streets when the charge went into effect in February 2003. Traffic plummeted, thanks in part to a school holiday period. By the end of the year, about 40 percent of London residents supported the program while 31 percent opposed it. The following year, the transportation agency found that congestion had been reduced by 30 percent. Air quality generally improved, but because certain diesel-fueled vehicles, buses, and taxis received exemptions, concentrations of one pollutant, nitrogen dioxide, have increased.

Congestion pricing is now an accepted feature of London’s transportation network.

Livingstone was ousted by a Tory, Boris Johnson, in 2008, and two years later his Conservative government repealed a short-lived extension of charges to West London, but left the rest of the zone in place. Today, drivers pay a one-time daily charge of £11.50 (currently about $15.00) to enter a roughly 13-square-mile area from 7 A.M. to 6 P.M. (Beginning in April, drivers of certain older vehicles also must pay an emissions charge, in addition to the congestion charge.)

Paul Mayall/Picture-Alliance/DPA via AP Images

The London Assembly's Transport Committee has called on the mayor to devise improvements, including more bus-only lanes and express buses. 

But the increase in Ubers, minicabs, and delivery trucks made the congestion program much less effective. Traffic has increased, bus speeds have plummeted, and riders have fled. Some people have switched to new tube (subway) lines and for-hire cars. Yet there are more than two million people living in poverty in the city, and buses are typically their cheapest option. More than 60 percent of poor Londoners live in outer boroughs, and one in five Londoners chooses the cheapest route to work, not the fastest or most direct, according to the Trust For London, a London poverty and inequality foundation.

The London Assembly’s Transport Committee has called on Mayor Sadiq Khan to devise improvements, including more bus-only lanes and express buses, and eliminating duplicate Central London routes to improve outer-borough services. And with a nod to congestion pricing 2.0, the for-hire car exemption ends in April.

“There [has to be] a clear line between where the money is raised and where it goes, so that it’s not seen as some money-making scheme to penalize poor drivers by a burdensome fee,” says Simon Jeffrey of the Centre for Cities, an independent London-based think tank.


TRAFFIC CONGESTION IS a symptom of the failure of cities to manage demand for roads. Despite decades of carpooling, high-occupancy vehicle (HOV) lanes, and mass transit, the vast majority of Americans still drive alone. The congestion debate forces lawmakers to balance shrinking revenues, demand for road access, and the inevitable pushback against paying for a commodity that is currently free.

The complaints came fast and furious in the Northern Virginia suburbs of Washington, D.C., in late 2017 when new, variable inbound toll rates on Interstate 66 initially soared to more than $40. Yet the rate only applied to solo drivers during rush hours in the peak direction who could bring another passenger, use alternative routes, or take public transportation to escape the charge.

“To say that charging for the road is anti-driving makes no more sense than saying that Starbucks is anti-coffee,” says Michael Manville, an associate professor of urban planning at UCLA’s Luskin School of Public Affairs. Federal Highway Administration analyses have found that a decrease in traffic as little as 5 percent makes a huge difference to the rest of the drivers using a route.

Congestion fees are regressive, and low-income people are at the greatest risk for negative impacts. An equitable congestion-pricing framework requires close attention to demographics, the direction of travel, and transportation alternatives. A 2009 RAND Corporation report noted that cordon pricing, in particular, could be “progressive, regressive, or neutral depending on where low-income people live.”

Discounts and exemptions can level the playing field. These must be carefully calibrated: Grant too many and the goal of getting more vehicles off the roads during peak periods is lost. Similarly, a pricing program that curbs congestion along a central artery only to clog streets in neighborhoods along the route simply creates additional headaches for drivers, residents, and the local officials who must address consequences, such as a decline in air quality and competition for on-street parking.

“The roads are a utility that cities run in a uniquely bad way,” says Manville, pointing out that supply and demand influences the prices of other utilities. “We often have congestion-based user fees for water, electricity, and heating oil and it’s no coincidence that we do not have a chronic shortage of those things. We give our valuable road space to anyone who has a car and as a result we run out of it every morning and every evening.”

Manville notes that equity is built into most utility payment frameworks, so concerns about harming poor people who drive are largely unfounded. Low-income people are not deprived of water, because portions of utility payments by other ratepayers fund subsidy programs.

Congestion pricing can work that way as well. “You shouldn’t do pricing if you’re not going to take some of that revenue and identify people who might be harmed by it and make them whole,” Manville says. “Free roads are not a subsidy for low-income people; they are a subsidy for high-income people that some lucky low-income people get to use.”


BY 2007, LIVINGSTONE could use three words to sum up his success for his fellow mayor Michael Bloomberg of New York: “Buses, buses, buses.” Meanwhile, Bloomberg seized on congestion pricing and related transit upgrades as a remedy for Midtown Manhattan traffic jams and congestion around the East River bridges that do not have tolls, the popular routes for “toll shoppers” who want to avoid fees for tolled routes into the city. Bloomberg failed to convince Albany to back his plan.

New York may yet be the first U.S. city to implement congestion pricing. In the past decade, average travel speeds in Midtown Manhattan and the central business district have dropped below ten miles per hour, according to the 2018 Fix NYC Advisory Panel Report. As in London, ride-hailing vehicles, online-shopping deliveries, pedestrian-only zones, and bike lanes offer quality-of-life improvements that dial up congestion. The metro area economy suffers, shedding billions because of interminable delays.

AP Photo/The Oregonian, Randy L. Rasmussen

Portland now ranks tenth in congestion nationwide. 

Neighborhoods that abut bridge crossings have serious pollution problems. “Not instituting congestion pricing has led to a disparity of impacts,” says Eddie Bautista, executive director of the New York City Environmental Justice Alliance and a former Bloomberg administration official. “Where you have some of the highest asthma rates in the city are also places where you have a lot of highways and contaminated air.”

For the past several years as commuters endured their daily dose of Metropolitan Transportation Authority decrepitude, New York Governor Andrew Cuomo and New York Mayor Bill de Blasio engaged in an exhausting blame game over the city’s transit crisis. In his January state of the state and budget address, Cuomo green-lighted his version of the Bloomberg-era remedy, a congestion charge to enter central Manhattan which would raise an estimated $15 billion over a decade for MTA capital projects, a sliver of the funding needed to resuscitate the system. (The alternative is a 30 percent increase in MTA fares and other tolls.) Taxis and for-hire vehicles recently began paying a new congestion surcharge as the taxi sector continues to fight the fee in court.

The two men also found enough points of agreement to outline another MTA improvement proposal a month later. The plan includes exemptions that de Blasio would like to see, including ones for people with disabilities and patients who need to access hospitals and other medical facilities.

Diving into Manhattan to work is a choice made by a small cohort of wealthier New Yorkers. A 2017 analysis by the Community Service Society, an anti-poverty organization based in the city, found that only 4 percent of outer-borough working people drive into Manhattan and that the “overwhelming majority” of those people are moderate- and higher-income workers. However, nearly 56 percent of working people from the outer boroughs use mass transit to get to jobs in Manhattan, other boroughs, or outside New York. Just 2 percent of the working poor who live in the outer boroughs might pay a congestion charge when they drive; 58 percent use public transportation.

Statistics are cold comfort for a governor who will have to convince outer-borough and suburban Democratic lawmakers who currently oppose or have serious reservations about pricing. They argue that the proposal would burden many of their constituents with a congestion fee on top of a bridge toll and fail to fund improvements to the commuter rail lines that serve their districts. The battle could be a bruising one. If the state legislature does approve the plan, the city could implement the business district cordon charge by the end of 2020.

As in London, buses are the answer central to New York’s goal of providing an equitable, congestion-busting transportation network. Cordon pricing can be progressive in New York if it delivers a faster ride into Manhattan for bus riders in neighborhoods that do not have a subway or commuter rail line. New York buses have the slowest speeds of the country’s largest cities and, not surprisingly, bus ridership continues to fall.

New York has one of the country’s highest percentages of extreme commuters, people who endure trips of 90 minutes or more. And a bus leg of a trip usually compounds the problem. New York State Assemblywoman Nily Rozic, an eastern Queens Democrat, has experienced her fair share of them. There are no subway or commuter rail stations in her district, so heading into Manhattan involves a bus ride to a subway station.

The subway-centric debate, a recent history of bus service cutbacks, and erratic night and weekend service do not inspire confidence among Rozic’s constituents that the MTA will “do right by them,” she says. Her constituents want better borough-to-borough routes to help people get to their first or second jobs. Transforming the “dollar vans” that operate in the transit deserts of Queens, Brooklyn, and the Bronx into a regulated micro-transit service would provide more safe and reliable rides.

A portion of new revenues is supposed to go toward improving bus services in the outer boroughs. Rozic has her doubts about whether the transit-deprived neighborhoods will see the money. “I hesitate to implement a plan that would alleviate congestion in Manhattan, but not necessarily take a look at what’s going on in Queens or in south Brooklyn or in the upper reaches of the Bronx,” she says. Rozic remains undecided on the cordon charge.

London’s experience with congestion pricing shows that charges can begin to remedy streets chockablock with solo drivers. Fed up with daily MTA drama, many New Yorkers are ready to accept a fee that most of them won’t pay. However, convincing drivers to think about roads like a water or a natural-gas utility will require a Promethean public-education campaign.

Resolving equity concerns—who pays a charge and who gets an exemption—is not an insurmountable challenge. It does, however, require transportation planners and lawmakers to understand how people move around a metropolitan area and limit who gets a pass from the congestion charge. To the extent that a charge targets the wealthy, they will take the financial hit and continue about their well-appointed lives. Yet they have immense political power to resist, and well-off suburbs are centers of political opposition. If congestion charges are approved, businesses will simply adapt as the charge gets factored into the cost of doing business. Such charges will hardly make a region less competitive, and could make it more competitive by making it more convenient, especially if walking, biking, and transit alternatives are added to the mix.


CONGESTION PRICING ALSO makes sense in other cities—but is an even heavier political lift. Lured by a healthy job market, tens of thousands of people have relocated to Portland, Oregon, over the past decade—and most of them didn’t ditch their cars. Traffic congestion is a major issue in the metro area, second only to homelessness. Air quality is also a concern, since vehicles produce a chunk of the region’s greenhouse gas emissions, and pollutants get trapped near the ground by inversions, a common local weather phenomenon.

The Oregon Transportation Commission, which oversees state transportation policy, filed a proposal with the Federal Highway Administration for a tolling “value pricing” pilot program on two of the most congested regional routes: portions of Interstates 5 and 205. Oregon officials pitched a unique feature: tolling all the freeway lanes, rather than just specific (HOT) lanes. In January, the Federal Highway Administration indicated that those freeways were “likely eligible” for tolls. If Oregon gets the nod from the feds, decisions about other specifics are still several years away.

Several Portland environmental-justice advocates support congestion pricing to manage roadway demand. People who use alternative modes of transportation could receive credits when they have to drive, for example. Providing discounts to low-income people is already part of the area’s transportation fabric: TriMet, the metro area transit agency, offers reduced fares for low-income people. Their focus is securing more funding for transit alternatives—and a faster ride—in poor and low-income areas.

One of those areas is East Portland, across the Willamette River from downtown Portland, where housing is scarce and expensive. East Portland has attracted people displaced by gentrification elsewhere, but even that area is changing fast. Poorer than the city as a whole, the neighborhood has higher percentages of African Americans, American Indians, Latinos, senior citizens, and immigrants. (Portland is the whitest major city in America—of its nearly 650,000 residents, 77 percent are white.)

Many East Portland moderate- and low-income residents have jobs in the riverside industrial areas and other places that require a car to get to, according to Michael Andersen, a fellow at the Sightline Institute, a Pacific Northwest issues think tank in Seattle. Residents drive miles out of the neighborhood for affordable groceries, too. Like many outer-borough New Yorkers, East Portlanders suffer through infrequent bus service, which becomes more of a problem the further east one goes and complicates connections to light-rail lines.

“Using [congestion pricing] as a demand management tool that helps people have a reliable travel time is one of the best things we could do,” says Jillian Detweiler, executive director of the Street Trust, a statewide transportation advocacy group.

AP Photo/Mary Altaffer, File

Typical traffic on the Williamsburg Bridge entering Manhattan

But despite its green bona fides, the political environment for congestion pricing in Oregon is as fragile as the natural one. There’s Oregon’s lack of a tolling culture: Two Columbia River bridges, east of Portland, are the only tolled routes in the entire state. “People are not used to tolling; it’s anathema just like a sales tax,” says Detweiler. (There is no statewide sales tax.)

Under the state constitution, any revenues from a prospective congestion-pricing plan must go to highway and roadway projects. A January poll commissioned by Metro, Portland’s tri-county regional government, found greater support for highway and road-widening projects than for transit improvements. Not surprisingly, there are other checkoffs on the congestion-pricing to-do list: Metro wants to see another in-depth study of the tolling and so does the state, according to The Oregonian/Oregon Live. There are also environmental and other planning studies on the horizon.

Sensing an opening to kill the plan, tolling opponents recently secured an Oregon Supreme Court approval to proceed with signature gathering for a 2020 ballot question that would essentially require a statewide sign-off on Portland-area tolls. But a no vote could be the catalyst for Portland to devise a city-only scheme out of the reach of state voters. Metro Portland’s congestion-pricing battle may end up being just as bitter as New York’s.


EVALUATING PUBLIC-TRANSIT alternatives must come early in the planning process and can make the difference between a progressive outcome that addresses low-income people’s transportation issues and a regressive program that just captures revenues without delivering benefits to the people who need them the most. For significant numbers of poor, low-income, and middle-class people to continue to take mass transit or to give up cars requires attention to issues like inefficient bus routes that currently operate like rolling afterthoughts in the outer sections of Portland and New York.

Cities must introduce new bus routes or supplement existing ones in transit deserts. Schedules must offer reliable connections to rail links and reflect current travel patterns, not sentimental attachments to routes that few people use anymore, preferably before the start of a congestion-pricing program.

Limited discounts and exemptions can alleviate the burdens for low-income people who cannot give up their vehicles. Exemptions for disabled people and discounts for residents contributed to wider public acceptance of the charge in London. But a plethora of exemptions or discounts for specific groups (similar to the parking perks that some New York public employees currently enjoy) that keep people in their vehicles will dilute the benefits. Pricing must be flexible enough to incorporate future transportation disruptions, such as impacts of for-hire vehicles (and down the road, autonomous vehicles) that New York and London have addressed.

Congestion pricing will challenge risk-averse lawmakers in an era when voters are reclaiming their democratic superpowers. The reaction of New Yorkers to subpar transit put a scare into a governor up for re-election, forcing him to make some key decisions. Portland faces cultural and political hurdles that may get city residents behind a downtown access plan if Oregon voters strike down a tolling plan.

No matter what, people will complain bitterly about an approaching vehicular apocalypse. Seattle, San Francisco, and Los Angeles, among others, are also looking at pricing strategies. But here’s the paradox: A carefully designed congestion-pricing program means that drivers will squawk less as time goes on, if they can cruise past the folks in the slow lane. It will take a while before the politics catches up with the reality. 

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