Five Things to Know About Congestion Pricing in NYC

August 22, 2019 - (3 min read)

Congestion Pricing — the infamous urban traffic reduction tool, utilized by London, Singapore and Stockholm — has been approved for usage in New York City. NLC’s new report, Making Space: Congestion Pricing in Cities, details both the existing global congestion pricing programs and what we know about the one in New York City.

On March 31, 2019, New York State passed a budget that authorized the Triborough Bridge and Tunnel Authority (TBTA), an affiliate of New York City’s Metropolitan Transportation Authority, to establish a congestion pricing tolling system for Manhattan’s Central Business District starting in 2021. This is the first congestion charging system in the United States. So, what do city leaders need to know about the new program?

  1. What is the difference between road-user charging and congestion pricing? Road-user charge systems require drivers “to pay based on distance driven and, perhaps other costs of road use, such as wear and tear on roads, traffic congestion, and air pollution.” Congestion pricing, on the other hand, is a type of road user charge system in which a flat or variable rate fee is charged to vehicles that drive in a specified area or zone within a city. The goal is for congestion charges to rise in accordance with increased traffic congestion, thereby pushing some drivers off the road and making traffic flow smoother.
  2. How much revenue will congestion pricing bring the city? While the total revenue projections have not been finalized, the range is predicted to be between $1.89 billion and $3.97 billion per year. The total amount will be largely influenced by the exemptions approved by the TBTA Board.
  3. How will the resulting revenue be distributed?The congestion pricing revenue will be split between the New York City Transit Authority (80%), the Long Island Railroad (10%) and the Metro-North Railroad (10%).
  4. How has revenue from congestion pricing been utilized by cities with established systems?Cities with established programs (London, Stockholm and Singapore) have largely used the revenue to improve local roads and road infrastructure, and to improve and expand public transportation systems.
  5. What are the societal benefits of congestion pricing? While congestion pricing is largely utilized to reduce congestion, it has wider benefits that improve the livability of cities as well. These benefits include:
    1. Significant reductions in congestion (between 22% and 30%)
    2. Improved air quality
    3. More consistent travel times
    4. Lower vehicle emissions
    5. Increased usage of alternative transportation such as buses, metro and bikes.

One of the trickiest parts of implementing a congestion pricing system is deciding who has to pay and who doesn’t. In New York City, there are some agreed-upon exemptions — drivers staying on the West Side Highway or FDR Drive, emergency vehicles, vehicles transporting passengers with disabilities, and reimbursement for residents in the zone making less than $60K per year — but additional exemptions may be added. The exemptions can significantly change the revenue projections and are therefore crucial to pay attention to.

As American cities continue to grow and traffic increases, local leaders will increasingly need to think about how to reduce congestion and increase alternative transportation options. Congestion pricing has been a controversial and often misunderstood topic among policy makers and city leaders. New York City will be the first in the U.S. to implement this system but will undoubtedly not be the last. Other large cities with congestion issues including Los Angeles and Seattle are watching New York City carefully as its system rolls out.

For more details on congestion pricing programs, see NLC’s new report, Making Space: Congestion Pricing in Cities.

Brenna Rivett small


About the Author: Brenna Rivett is a principal research associate at NLC’s Center for City Solutions.