Study: Detroit Could Get $7 Billion Boost by Reducing Traffic Congestion

Prioritizing infrastructure that reduces traffic jams can spur big economic gains

With the economy stuck in a recession and Detroit facing a $300 million budget deficit, a new Reason Foundation report finds that reducing traffic congestion and improving travel times could boost the region's economic output up to $7 billion a year.

The Reason Foundation report examines the impact that population growth and longer commute times will have on five areas across Detroit by 2030: Comerica Park, the University of Michigan-Dearborn, Twelve Oaks Mall, Pontiac, and Detroit Metro Airport.

Of those locations, the Reason study says the biggest economic gains would come from eliminating severe congestion around suburbs like Pontiac, which could add up to $7 billion a year to the regional economy and over $500 million in annual tax revenues.

Improving accessibility around the baseball stadium, University of Michigan-Dearborn, and retail sites like Twelve Oaks Mall could produce $3 billion to $5 billion in annual economic benefits. The report found the possibility of similarly large economic benefits in Atlanta, Charlotte, Dallas, Denver and Seattle.

"This report shows how important it is to prioritize taxpayer money on infrastructure projects with the best benefit-cost ratios," said Adrian Moore, vice president of research at Reason Foundation. "If you focus on the projects proven to improve mobility and eliminate traffic jams, your investment will be rewarded several times over. Shorter travel times increase worker productivity, spawn more jobs and help create more shopping, entertainment and dining choices."

"We studied eight cities and the findings are clear," said David Hartgen, author of the report, senior fellow at Reason Foundation and emeritus professor of transportation at the University of North Carolina at Charlotte. "Reducing traffic congestion by 10 percent improves productivity by over one percent. One percent may sound small, but in a city like Detroit, it can mean billions of dollars in economic gains. The biggest gains come from enhancing mobility around suburbs, universities and malls. Smaller economic increases are made around central business districts and airports."

Traffic congestion is going to have increasingly negative impacts on the Detroit economy in the coming decades. Reason finds that if infrastructure investments are aimed at the projects that will relieve the most traffic, Detroit needs to spend approximately $24 billion (in 2005 dollars) to eliminate severe traffic congestion by 2030. That figure is less than the $41 billion the region plans on spending on transportation in its current long-range plans.

The study makes several recommendations, including:

  • Pay more attention to the accessibility of various locations, not just downtown.
  • Remove bottlenecks throughout the region. Relatively modest expenditures can have major impact on travel times, particularly if congestion is relatively concentrated geographically.
  • Add road capacity in and around the rims of cities. Investment in suburban accessibility often offers a very good return rate.

The Reason Foundation study takes an in-depth look at traffic and economic growth in Atlanta, Charlotte, Dallas, Denver, Detroit, Salt Lake City, San Francisco and Seattle.

Full Report Online

The full study is online here.

Reason Foundation's transportation research and commentary is here.

About Reason Foundation

Reason Foundation is a nonprofit think tank dedicated to advancing free minds and free markets. Reason Foundation produces respected public policy research on a variety of issues and publishes the critically acclaimed Reason magazine and its website, Reason.com. For more information, please visit Reason.org.

Contact

Chris Mitchell, Director of Communications, Reason Foundation, (310) 367-6109




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