Public Works Financing

Getting Serious About Congestion

Reason project seeks dramatic rethinking of urban congestion policy

The welcome surge of new private-sector proposals for HOT lanes—in Colorado, Georgia, Texas, and Virginia—is a response to the growing demand for relief from horrendous traffic congestion in America's larger urban areas. But as impressive as they are, these proposals are just a toe in the water, compared with the need for seriously addressing congestion relief.

As big as the accepted number for the cost of congestion is, that $63 billion annual cost estimated by the Texas Transportation Institute seriously underestimates congestion's full impact. TTI's number is based on just two factors: individuals' time sitting in traffic and the cost of the fuel they waste in doing so. Yet congestion also costs businesses and the regional economy dearly. We're still a long way from having a comprehensive measure of those costs, but two research efforts are suggestive of large impacts.

First, research reported in the National Cooperative Highway Research Program Report 463 looks into how congestion raises costs to business, via such things as hindering just-in-time delivery systems, reducing worker availability, shrinking product/service market areas, etc. For example, using data from Chicago in some elaborate modeling exercises, the researchers estimated that a 10% reduction in travel times would result in truck-delivery savings of nearly $1 billion per year.

In France, researchers Remy Prud'homme and Chang-Woon Lee estimated the relationship between travel time and effective labor market size. The underlying idea is that, since the time people are willing to spend traveling to work is roughly constant, increased congestion effectively decreases the radius within which jobs are available to them. Thus, congestion leads to a mismatch of employer needs and job skills, which reduces the productivity of the regional economy. Prud'homme and Lee used data from 22 French cities, finding that a 10% increase in average speed leads to a 15-18% increase in labor market size. And each 10% increase in labor market size increases regional output by 1.8%. Hence, serious congestion reduction should translate directly into increases in incomes.

Until now, the debate on urban transportation in this country has all but ignored these real economic effects. For the past 20 years, a phalanx of thinkers and interest groups has told us that we can't build our way out of congestion. Instead of trying, they say, we should invest transportation resources in massive attempts to get people out of their cars (via building rail systems that hardly anyone can use conveniently and by making drastic changes in land-use). The only realistic response to congestion (per Brookings scholar Tony Downs) is to sit back and get used to it as a permanent feature of urban life. These ideas have captured a surprisingly large degree of mind-share among the people who staff and govern the Metropolitan Planning Organizations of many urban areas, and even quite a few leaders of state DOTs.

America is overdue for an alternative to this dismal approach. It would begin from the premise that our goods move mostly by truck and we move mostly by car for very good reasons of cost, time, and flexibility. The failure is not caused by the users of the highway system but by its producers. What we need is a market-driven highway system that provides drivers and truckers with as much roadway as they are willing to pay for.

And that is the premise of the new Mobility Project, unveiled by the Reason Foundation in January (www.reason.org/mobility). We agree with Texas Rep. Mike Krusee, author of that state's sweeping HB 3588 legislation on tolling and public-private partnerships, that congestion is analogous to Soviet-era breadlines, that it is not inevitable, and Americans should not tolerate it.

But what do those good thoughts mean in practice? Well, in the Mobility project a whole team of researchers is looking into such questions as:

  • Why is auto and truck-based mobility likely to remain the predominant pattern?

  • How much does congestion really cost America?

  • How much physical capacity would be needed to achieve goals such as eliminating all severe (LOS F) conditions over the next 25 years, or achieving a travel time index of, say, 1.2 (rush-hour trips take only 20% longer than off-hour trips)?

  • How much less physical capacity would be needed to achieve such goals if all the additions were value-priced?

  • Where could we put new urban expressway capacity?

  • How can we minimize the negative impacts of urban expressways, to make them more city-friendly?

  • How much can we really do about non-recurrent congestion?

  • Do we have the right institutions for market-driven mobility?

There are already some promising indications. Three years ago in Texas, the Governor's Business Council targeted congestion as one of the state's major problems—and decided to explore policies for aggressively reducing it. With assistance from TTI and consultants Wendell Cox and Alan Pisarski, they crunched the numbers to estimate how much worse congestion would be 25 years from now under current MPO plans in the major cities. Then they estimated how much highway capacity would be needed to achieve major reductions in congestion in 2030—not reduced from the awful level it's expected to be then, but reduced from the already high level it is today. Overall, that initial report recommended setting a goal of reducing the travel time index to 1.15 by 2030—and then costed out the highway investment needed to get there. That pioneering work helped build support for Krusee's HB 3588 legislation.

And just last December, the four main transportation agencies in Georgia, working together as the Governor's Congestion Mitigation Task Force, adopted a goal of slashing year 2030 congestion in Atlanta, from an expected travel time index of 1.67 to an ambitious target of 1.35 (the 2005 level is 1.44).

It's this kind of dramatic rethinking of urban congestion policy that the Mobility Project seeks to foster. I will keep you posted on the project's progress.

Robert W. Poole Jr. is director of transportation studies and founder of the Reason Foundation.

Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy





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