Still riding my congestion-pricing hobby horse . . .
I admit that pricing free roads does make some people worse off. That's only natural since people who use free roads during peak times are not paying the full social cost of their trips. It's not nearly as simple as rich-vs.-poor, though; determining who gains and who loses is tricky and something I'll write about another time.
But the distributional effect of tolling once-free roads affects only current users. New residents will reckon the cost of tolls when deciding where to live. New businesses will reckon the cost of tolls when deciding where to set up shop.
An important corollary is that potential residents and potential businesses will factor in the costs of congestion when deciding whether to move to town in the first place. And congestion-free roads make a city more attractive. They effectively shrink a city geographically -- what matters is not how far point A is from point B, but how long it takes to get from A to B. Uncongested roads enlarge the market for businesses, allow them to maintain smaller inventories, and permit them to cluster in dense commercial centers, thereby reaping the agglomeration benefits of density. Congestion-free roads give residents more flexibility in choosing where to live and generally make it easier to get around town. And congestion-free roads mitigate the impact of dense, infill development.
A city that rids itself of congestion by pricing its roads thus makes itself more attractive relative to other cities. Congestion pricing facilitates growth.
This is a critical point for Austin residents to bear in mind because our roads are growing more congested at a far faster rate than most cities our size. So says the Texas Transportation Institute. (Study available here.)
Austin's rapid increase in congestion will cost us in the long run.
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