Beyond Congestion Pricing

By Gregory H. Shill February, 2025

After years of political and legal efforts to block it, congestion pricing finally went into effect in New York City in January 2025. Early indications are positive, though threats to its continuation from the Trump administration and others remain. But its journey to this point has already made one thing clear: it is time for the Big Apple to seize more of its own destiny in transportation policy.

The battles that delayed and still imperil the Metropolitan Transportation Authority’s congestion pricing scheme underscore the need for policies that New York City can implement unilaterally. Making urban transportation policy in the shadow of an uncooperative gubernatorial or presidential administration is the norm, not the exception, and cities must be strategic. They should pursue policies that minimize the need for external buy-in—even from traditional allies like the MTA, a state agency. This call for increased city self-determination invokes Richard Briffault’s expansive, functional conception of city power and is not limited to New York. Cities already possess abundant untapped authority in transportation and should use it.

Through analysis of city-state transportation policy tensions, this Article applies Mancur Olson’s collective action framework to explain why accomplishing congestion pricing was so difficult despite its clear win-win potential. In casting the challenge as one of concentrated costs and diffuse benefits, it contributes a novel taxonomy of stakeholders affected by congestion pricing. It also proposes a series of actionable changes that New York City can implement independently. These have the virtue of offering meaningful reform without the need for the approval of outside officials. Beyond the particulars of congestion pricing, such a strategy is of general and enduring importance given the widely noted propensity of states and the federal government to prioritize the transportation needs of other areas over those of cities.

Introduction

On January 5, 2025, congestion pricing finally went into effect in New York City. The program, which is administered by New York State’s Metropolitan Transportation Authority (MTA), charges a toll of $9 to motorists entering the Manhattan core during peak hours. Its purpose is to manage demand for a scarce resource: access to a fixed quantity of road space during periods when demand tends to rise sharply. In addition, it stands to generate a new revenue stream for the MTA, which is the leading provider of mass transit in the metropolitan area.

Congestion pricing went into effect only after running a gauntlet of legal and political battles, including an eleventh-hour “pause” by New York Governor Kathy Hochul. These challenges are still ongoing, and the program’s future is not yet secure. On February 19, 2025, Sean Duffy, President Donald Trump’s Secretary of Transportation, purported to revoke the permission previously granted by his department for the program,¹ and the MTA filed suit to defend it the same day.² Several other lawsuits against the program are also working their way through the courts. Nevertheless, the program has crossed a historic threshold, becoming the first of its kind in the United States to go into operation.

Early indications are encouraging. In its first week, congestion pricing claimed remarkable progress toward its goals: car volumes in the congestion zone dropped by 7.5% on weekdays, delays on the Hudson and East River crossings fell by up to 63% and 43%, respectively, and ridership and travel speeds on MTA buses improved.³ These are consistent with models showing the potential for a toll to increase trip speeds.⁴

Promising as these results are, this Article’s focus is not congestion pricing’s early days,⁵ or the ongoing litigation, but its design and why that design made the program so difficult to enact and sustain. The problems were not technical but institutional and structural, and they caused decades of delay. These barriers are often overlooked when drawing lessons from the experience of congestion pricing in other countries that have governance structures that respond better to city needs.

While its adoption was a minor miracle, congestion pricing was just one of many potentially transformative transportation policy choices New York could have made. Even the most optimistic estimates of its long-term benefits leave many problems unaddressed and valuable opportunities on the table. Unlike congestion pricing, these opportunities have the virtue of being within New York City’s power to deploy unilaterally. Especially in a hostile presidential administration, these tools—the ones that New York City can implement independently—are more important than ever.

This Article does two things. First, it explores the city-state dynamics that made the pursuit of congestion pricing appealing to New York City officials by sparing them the hard choices involved in using their own authority to make transportation policy. Second, it develops a playbook of policies that can and should be implemented by the New York City government unilaterally. These changes would be helpful regardless of the future of the program.

The Article begins with a potted recent history of New York’s congestion pricing saga in Part I. Part II distinguishes city from state transportation policy incentives and argues that some transportation policy challenges lend themselves better to local rather than regional or statewide resolution. Part III identifies the constituencies that stand to benefit and lose from congestion pricing. Applying the collective action framework of Mancur Olson,⁶ it casts the divisions between these groups as largely a problem of uncertain and diffuse benefits versus certain and concentrated costs. Part IV develops a policy playbook for the City of New York. Crucially, these policies are within the municipal government’s authority to adopt—and because transportation is so vital to New York City, they would quickly enhance quality of life and economic growth as well as transportation service. The Article then concludes.

I. Congestion Pricing in New York

The idea of charging vehicles to enter busy urban areas during peak hours in order to manage traffic is credited to the economist William Vickrey.⁷ In New York City, it has been under discussion for so long that the original Penn Station was still standing when it was first conceived.⁸ Achieving approval at the state level required the marshaling of immense political capital, and the pitched battle entailed a long period of uncertainty that provided a ready-made rationale for elected officials and policymakers to avoid planning for alternatives. This is unfortunate for two reasons. First, many alternative ideas, some of which are developed infra at Part IV, are complements to congestion pricing that would help maximize its utility, not rival policies that would impair or preclude it. Second, while those ideas come with their own challenges, they are the right challenges, because they are rooted in New York City itself. The state and the region will never reap more benefits from fixing transportation in New York City than the city itself will—and New York, unlike many cities, actually has the scale and resources to fix its own problems.

This Article uses “the City” as shorthand for the municipal government of the City of New York as well as the interests of its constituents. Where exactly the balance of those interests lies is a contested question, and the municipal government is not unitary. But thus defined, the concept is tractable enough. Following local convention, and where doing so does not confuse things, the Article also sometimes uses “the City” to refer to the metropolis itself, not only its government.

In London, Stockholm, Singapore, and other cities that have adopted congestion pricing over the past 50 years, there is good evidence that the policy is effective at curbing vehicle congestion. It also generates revenue that is often used for complementary purposes, like expanding mass transit. That combination in turn tends to create positive externalities in the form of reducing noise and air pollution and making streets friendlier for pedestrians,⁹ which can foster a positive feedback loop that vitalizes the city center.

In New York, congestion pricing has been through the wringer even by local standards of contentiousness.¹⁰ Before its most recent, tentative revival, it was killed repeatedly. It has been the subject of at least ten lawsuits filed in recent years; some are still pending.¹¹ The Federal Highway Administration’s Final Environmental Assessment ran to 958 pages plus thousands of pages of appendices.¹²

Although the program received final federal regulatory approval in 2024, uncertainty at the state level continued to dog it until the end of the year. The MTA gave final approval in March,¹³ but in June, Hochul, the governor, announced that the program would be “indefinitely paused.”¹⁴ This imperiled an important new funding stream for the MTA as well as broader transportation reform ambitions. Agitation and litigation¹⁵ ensued, along with speculation about the political motives behind the pause.¹⁶ The week after the November 2024 election, the Democratic governor announced that she was lifting the pause.¹⁷ As modified, the plan requires most drivers to pay a toll of $9 to enter Manhattan south of 60th Street, down from the original plan of $15; the toll will rise to $12 in 2028 and $15 in 2031, helping to generate an estimated $15 billion for the MTA.¹⁸

The modified plan went into effect on January 5, 2025, but was followed by lawsuits¹⁹ and the announcement of revocation of federal permission for the program a month into Trump’s second term, litigation over which is now pending.²⁰ Given this constellation of events, uncertainty for the program in the near term is assured.

While these delays and attacks are lamentable, blaming the program’s tentativeness on the opposition of political actors outside the City misses the larger context of transportation policy paralysis that produced congestion pricing and not any number of other reforms, such as those developed infra at Part IV. The City’s hesitancy to use its own authority for major transportation reforms—and the implicit choice instead to outsource that responsibility to the state—chained the City’s transportation future to a program that was inherently uncertain and controlled by officials for whom the City’s best interest was only one priority among many.

Beyond decongestion benefits, the stakes for transit were and remain high. In June 2024, shortly after Hochul announced the pause, the New York State Comptroller estimated that a cancellation of congestion pricing would cost the MTA $15 billion in direct revenue plus another roughly $2 billion in federal matching funds for transit capital programming while exacerbating the agency’s operating costs problem.²¹ In October 2024, the Comptroller warned of the agency’s deteriorating fiscal condition: it had “quickly turned from stable back to uncertain” over the preceding year because of a plateauing post-pandemic ridership recovery, lower tax revenues, and “a pause on congestion pricing and other financial risks.”²² A cancellation of congestion pricing threatened to “create additional operating budget costs from higher maintenance costs ($260 million annually) and higher debt servicing costs ($300 million annually).”²³ The state comptroller projected escalating operating budget deficits at least into 2028, ranging from $652 million to $3 billion annually in that final year depending on the methodology chosen.²⁴ On the other hand, if realized, most of congestion pricing’s potential fiscal and transit benefits would still take years to be felt.

During the Hochul pause, there was genuine uncertainty over whether congestion pricing would proceed. Not surprisingly, the coalition of local officials and advocates who had fought tooth and nail to get it enacted continued to focus during that period on reversing the state’s decision—and apparently only on that, not on broader reforms. Regardless of whether Trump’s effort to terminate the program is successful, it is in the City’s best long-term interest to follow the lead of other cities that have adopted congestion pricing and adopt complementary policies.

Congestion pricing is one tool—a price mechanism—for redistributing travel demand. However, it is not the only tool available. Moreover, its need for state and federal authorization creates challenges that are peculiarly difficult in our system of government, which pits states and the national government against cities²⁵ and lacks meaningful regional governments.²⁶

The uncomfortable reality is that while the City was and remains a secondary victim of the many threats to the MTA’s congestion pricing program, it also shoulders significant responsibility for traffic congestion and the weakness (by global city standards) of mass transit in the five boroughs.²⁷ This Article explores the City’s untapped capacity to get itself out of this problem—a possibility that has been largely overshadowed by the high drama over congestion pricing.

II. The Case for NYC Primacy in NYC Transportation

A single-minded focus on congestion pricing by the City and by state officials representing the City may have been politically important to get the policy adopted and implemented. But many high-impact solutions, such as those developed infra at Part IV, were not pursued despite being straightforward as a matter of City legal authority and policy benefits. While congestion pricing has great potential, the City should aim for other reforms that do not require state or federal approval.

This Part makes the case for City primacy in the governance of transportation in New York City. This call should not be mistaken for a push for exclusivity; there will always be an important role for regional or state authorities. For example, commuter rail would not be successful if operated wholly at the City level. But in a city that possesses the geographic and population scale of New York; its economic resources; and its large share of metropolitan population and GDP, the case for a default principle of local primacy in local transportation policy is strong. For the City, ditching the passive approach for an active one that leverages these advantages would have been wise during the development of congestion pricing. During the second Trump administration, it is imperative.

This expansive conception of local government power ideas finds support in Richard Briffault’s canonical Our Localism series.²⁸ “Are local governments legally powerless, as is often contended,” Briffault asks, “or are they, in fact, fairly powerful? The answer turns on the meaning of power and on an assessment of the needs of local governments.”²⁹ While cities owe their legal existence to state governments, and some spheres of “local” power have been explicitly reallocated to special districts or state agencies, cities—especially big ones—nevertheless possess abundant authority.³⁰ Thus “if power refers to the actual arrangements for governance at the local level, then local governments possess considerable power” because they “often get what they want.”³¹ When mated to transportation policy in New York City, this insight has great potential.

Subpart A of this Part details the City’s power relative to its state and region. Subpart B provides a theoretical framework for applying that power to transportation policy.

A. The Power of New York City Relative to Its State and Region

The congestion pricing saga of 2024 was not the first case of the City’s interests clashing with Albany’s—far from it. For example, City Comptroller Brad Lander compared Hochul’s action to the state’s abolition of the commuter tax a quarter-century earlier, a change that chipped away at the City’s fiscal capacity.³² That decision was driven by electoral considerations,³³ as Hochul’s was widely believed to be.³⁴

The existence of an electoral dimension to the congestion pricing dispute is not surprising. Cities always have interests that are in tension with those of state and other local governments. In the case of New York City specifically, the relevant governments are too numerous to count and spread across three states. In our vetocracy,³⁵ there will always be some powerful politician or agency with the juice and incentive to trade off the City’s interests for those of the suburbs (and those who live elsewhere entirely), whether it is Andrew Cuomo,³⁶ Chris Christie,³⁷ Phil Murphy,³⁸ Shelly Silver,³⁹ Kathy Hochul,⁴⁰ the U.S. Department of Transportation during Trump’s first⁴¹ and second⁴² terms, or Robert Moses’ various authorities.⁴³ In 1999, suburbanites didn’t want to pay a commuter tax; today, they don’t want to pay a toll to drive into the City. These types of conflicts are inherent in a system of government like ours.

A focus on these dramas obscures something important: New York City is very large and very powerful, in economic, political, and legal terms alike. Far from being some bit player, it is the principal city in a conurbation of over 20 million people⁴⁴—in terms of population, jobs, income, and wealth—and it contributes a large share of the metro area’s elected representatives.⁴⁵ It is a global capital of finance and culture. As important, it enjoys a high degree of autonomy in certain spheres notwithstanding its position as legally subordinate to the state. The 2024 pause sharpened the question why the City⁴⁶ has failed, over and over, to seize the levers it already controls.

Important powers of the City include the authority to determine rules and regulations for street traffic; determine parking rules and fees; enforce vehicle and traffic laws; and create bus lanes, bike lanes, and expanded sidewalks. The New York City Charter and implementing legislation allocate these powers to the Commissioner of the New York City Department of Transportation (NYC DOT), who is appointed by the Mayor, with varying degrees of concurrent authority for the Mayor and other City agencies and officials.⁴⁷ NYC DOT and the City routinely exercise many of these authorities, occasionally in imaginative ways like the 14th Street Busway, which redesigned the eponymous street to speed up bus travel while still allowing pick-ups and drop-offs by commercial and passenger vehicles.⁴⁸

Assembling a winning coalition for further transportation policy change in the City is no doubt difficult, but relying on Albany is both tenuous (as the pause underscored) and conceptually backwards. Given its scale and resources, the City is best situated to address intra-City transportation challenges itself.

Put another way, the despairing critiques by Lander and other advocates of congestion pricing prove too much. If, as they correctly observe, state authorities—and, for that matter, the federal government—have been obstructing the City on public transportation and other City priorities for decades, then the City needs to find a new strategy rather than accepting that constraint as binding.

B. A Theory of NYC Primacy in NYC Transportation

Many public goods, even ones that might enjoy majority support, are underprovided. One reason is the difficulties in motivating collective action. The political economist Mancur Olson provided a classic statement of this problem: a proposed change that imposes concentrated costs for the sake of dispersed benefits is difficult to achieve.⁴⁹ This holds even more strongly when the pain is felt immediately while the upside is deferred or spread thin. Conversely, a change that offers definite and concentrated benefits and diffuse costs is easier to adopt. The mechanism that explains this theory is that the groups that stand to experience an immediate change in circumstances have more incentive to mobilize support for their position—and less difficulty doing so—than the groups that stand to feel only abstract or uncertain changes.

Congestion pricing is a perfect illustration of this problem of collective action. The suburban Westchester or Nassau County resident bears a concrete, definite, and immediate cost and uncertain benefits from the program. Meanwhile, the City resident who doesn’t have a car may not bear costs of congestion pricing, but the benefits of subway improvements slated to be completed in the 2030s, or even of reduced traffic, are sufficiently uncertain or distant that the resident may discount them. This reflects a more general facet of human nature: “Habits reflect time-inconsistent preferences that lead to seeking immediate rewards.”⁵⁰ Conceivably, once begun a congestion pricing could become more popular, and indeed there are studies that report improvements in public perceptions after such programs are implemented.⁵¹ But there is no getting around the basic challenge that significant promised improvements will materialize, if at all, only in the future while the pain is certain and felt immediately. This helps explain a great deal of the slow walk to political acceptance in New York among the relevant power brokers outside the City.

In New York State politics, suburbanites are credible swing voters and wield outsize power in the New York City region, the state—and, in recent elections—to some extent even the U.S. House of Representatives.⁵² This made congestion pricing an especially poor candidate for state approval. But the decision to rely on the state in the first place mistakenly assumed a necessary role for Albany in improving New York City transportation.

The main benefits of congestion pricing and indeed transportation policy in New York City in general flow to the City. The state will never have more reason to improve the many facets of City life to which transportation is essential than the City itself does. New York City boasts most of the jobs and amenities in its metro area. It should implement policies within its legal domain with confidence and without waiting for the state. This is easier said than done, of course—but that difficulty reflects dysfunction at the City level, not the state. This distinction, collapsed by the congestion pricing debate, should guide the City’s future policy decisions.

* * *

Congestion pricing is a means to a set of ends. Those ends can also be advanced by other policies. The City might want for ironclad legal authority to do a comprehensive congestion pricing scheme on its own,⁵³ but it does not need that: it has other tools to pursue many of the same goals. As the City confronts a new, hostile federal policy environment for at least four years, now is a good time for the City to draw up a plan. The goal should be emphasizing changes it can implement independently, without state or federal approval.

III. The Everything Bageling of Congestion Pricing

Without making an explicit division, the MTA’s public website explaining congestion pricing⁵⁴ envisions two classes of beneficiaries: drivers and everyone else.

This Part unpacks these two stylized categories. The first category—drivers—encompasses many people who dislike the policy intensely. The second is wide but shallow: a big group none of whose members stand to reap benefits in the near term that even begin to rival the burdens felt by the first group.

Part II applied Olson’s framework to show the downsides of maximizing the population of beneficiaries when doing so creates concentrated costs and diffuse benefits. But congestion pricing also suffers from a related but distinct problem. It was crafted to try to anticipate every possible objection and constituency, which left it without a powerful champion. Its design recalls New York Times columnist Ezra Klein’s “everything bagel” metaphor for why the United States struggles to build infrastructure.⁵⁵ The idea applies the aphorism “the perfect is the enemy of the good” to the politics of building housing and infrastructure. Rather than an ideal bagel containing all the fixings, an insistence on mollifying all constituencies can mean no bagel at all.

Klein’s theory “chastise[s] Democratic policymakers for undermining their vision of abundant clean energy, transit, affordable housing and high-tech manufacturing with an ever-expanding list of regulatory requirements that make it awfully expensive to build anything.”⁵⁶ Congestion pricing is both a legal and political everything bagel. It was subjected to a massively burdensome environmental review and its chronic precariousness is due in part to an ever-expanding list of de facto political coalition requirements in New York. Horizontal and vertical attacks from New Jersey⁵⁷ and the federal government, respectively, have exacerbated these problems.

A. The First Class of Beneficiaries: Drivers

The first group that congestion pricing stands to benefit is drivers. It does this by increasing the efficiency of car travel: traffic moves more freely after cities adopt a congestion charge.⁵⁸ This tends to benefit suburbanites. As a general rule, and compared to city dwellers,⁵⁹ they have fewer good transit options, more income and wealth (and thus more ability to absorb a charge), and prefer car travel to transit. Suburbanites should therefore have a higher willingness to pay for time savings in car travel.⁶⁰

However, it is unclear whether suburban drivers as a group see the tradeoff in these terms. After all, it was various New York City constituencies that clamored for congestion pricing, not suburbanites or their elected representatives. In fact, the suburbs led the opposition. Perhaps suburbanites (or a politically empowered subset) subjectively value the time savings less than the congestion charge, don’t believe they’ll save much time, or just viscerally resent another “tax” on living in the expensive tristate area. To the extent the suburban hostility to congestion pricing represents a failure to rationally weigh tradeoffs, it can be understood as part of a more general cognitive bias known as loss aversion⁶¹ that prevents people from accurately valuing prospective benefits when doing so would cause them to give up current benefits, especially if the future benefits are somewhat uncertain but the loss of the current ones is certain.⁶² Perhaps for these reasons, congestion pricing was never primarily sold as a benefit to drivers or suburbanites.

B. The Second Class of Beneficiaries: Everyone Else

An aggressive appeal to drivers would have required a heavy dose of paternalism—in this case, getting people to accept a cost that was both certain and quantifiable ex ante in exchange for a benefit that was neither. It’s no surprise this wasn’t the primary pitch. Instead, the main benefits and beneficiaries of congestion pricing were more diffuse—or, as the MTA put it, “Everyone benefits from congestion pricing.”⁶³

The project’s leading benefits were said to be:

Increased funding for transit: $17 billion for capital projects, consisting of $15 billion in direct revenue⁶⁴ and $2 billion in federal matching funds.⁶⁵
Increased transit efficiency. Faster-moving traffic facilitates faster buses, which makes bus travel more desirable, creating the potential for a positive feedback loop of utility and ridership. Under optimistic assumptions, this same flywheel might boost transit revenue.
Environmental mitigation. This would operate both directly (by reducing traffic and emissions) and indirectly, by funding efforts to reduce emissions impacts in certain areas likely to experience an increase in vehicle traffic avoiding the congestion zone.⁶⁶
Improved road safety. Eliminating car trips or swapping them for transit use might translate into fewer crashes, injuries, and fatalities.⁶⁷

To realize the full benefit of this last item, a sustained enforcement push might be needed. A reduction in traffic tends to mean higher vehicle speeds on average, and shifting the distribution of speeds to the right-hand side of the curve might also mean more extreme speeders,⁶⁸ who likely bear a disproportionate share of responsibility for traffic deaths.⁶⁹

Of all the claimed benefits of congestion pricing, revenue for the MTA is the most identifiable and measurable one—and the hardest one to replace through direct appropriation, given the scale as well as the loss of matching funds. Yet even with the gargantuan sums noted above it is not certain what the MTA could achieve. The MTA’s capital costs are the highest in not only the United States but (by a large margin) the world,⁷⁰ as the NYU Marron Institute Transit Costs Project has documented.⁷¹ For example, a proposal to extend the Second Avenue Subway by 1.5 miles is projected to cost $7.7 billion and won’t be finished until the 2030s.⁷² Most observers regard those estimates as optimistic.

Congestion pricing in the latest iteration represents a significant expansion from the original concept of trying to discourage traffic congestion. It now serves several load-bearing functions fiscally and politically, embodying the spirit of the everything bagel.

It remains to be seen whether the metaphorical everything bagel of congestion pricing will be as successful in New York City as its literal counterpart. Regardless, the City has tools at its disposal to make progress on all four of the above benefits—even revenue—without congestion pricing.

IV. A Playbook for City Self-Determination in Transportation

Whatever the future of congestion pricing, the City has many policy options at its disposal. Five such ideas follow. Each would work well with the others and regardless of whether congestion pricing continues. The political and other tradeoffs they present are the right ones: in exchange for liberating the City from external constraints, they require the City to set its own priorities. Most of these ideas have been tried on a small scale in New York or on a larger scale elsewhere, and many have been studied rigorously. Together, they would achieve for the City a significant increase in self-determination—in transportation, but also more broadly.

A. Boosting Municipal Population and Revenue

The City should decide it is going to allow its population to grow. Other cities need to engage in marketing campaigns or offer incentives to attract residents; New York City merely needs to make it legal to build housing to bring supply more in line with demand.

The City, which de facto caps its maximum population with land use policy, can flip a switch to become larger, more prosperous, and more economically diversified. Around 40 percent of the buildings in Manhattan would be illegal to build today due mostly to restrictive zoning and building codes—for starters, a level of density approximating that of those buildings should be legalized.⁷³
The increase in density and fiscal capacity that would result from relaxing these rules would lay the groundwork for a shift toward mass transit and away from continued reliance on private cars. This would be a bitter pill in suburbs, but should be able to win majority support in Manhattan and other parts of central New York City.

Converting negative space to positive space.

Streets can be seen as the negative space of cities. They are necessary, but primarily because they provide a way to access everything else. The things that make cities great—residential areas, offices, factories, parks, schools, hospitals, etc.—comprise positive space.⁷⁴
In recent years, the City has taken action to reallocate some of the right of way to non-vehicle uses. This is a salutary change. But the City also needs more development, not only a different transportation mix for its negative space.
Whereas in many cities the main thoroughfares are owned by the state, in the Big Apple, the large majority are owned by the City. Many streets above 14th Street and in the outer boroughs are too wide. The City should think more creatively about these assets.
Specifically, the City should think beyond bus and bike lanes to embrace non-transportation uses⁷⁵ of this space. Examples could include new housing or other services, like garbage collection. Small linear parks (“parklets”) will be helpful in places, but what New York needs most is more housing. Tokyo has shown there is room for creativity in doing infill housing construction on former streets. Confronting the same problem of a too-wide street as well as a history of devastating conflagrations, the Japanese metropolis “developed a mile-long set of 13-story buildings” that double as an urban firebreak.⁷⁶ Whether or not that specific application would work well in the City, the project is suggestive of the potential for adding housing on what are today overly wide avenues. This may require shifting control of some City assets from NYC DOT to other agencies, but should not require much or any coordination with other political entities.
The City should identify road area that can be repurposed for positive space such as housing, accessory commercial units (ACUs), or other forms of development and auction off the land to property owners or developers for that purpose.
In pedestrian-dominated areas like the West Village that are starved for pedestrian infrastructure, have a shortage of buildings, and are chronically congested with vehicles, full pedestrianization of some streets and permission to construct ACUs and other buildings in the right of way might be appropriate. The sales and property tax revenue potential would be a nice side benefit but the main purpose to these changes to transportation and land use would be to allow people to reach destinations more easily.⁷⁷ This would be achieved both by allowing more positive space to be added and by making it easier to get to. Lately, the City has gone the other way, using onerous regulation to wind down the restaurant curbside dining boom that many saw as a bright spot of the pandemic and revert dining spaces to one or two parking spots for cars.⁷⁸

The City should explore ways to implement value capture, a mechanism that would allow it to recoup the costs of transit and street improvements that generate outsize hyperlocal benefits through corresponding tweaks to the property tax.⁷⁹ This could be coordinated with the MTA or adopted unilaterally for City projects.

B. Reducing the City’s Transportation Costs Structure

In the medium term, shrinking the cost structure of New York City government operational and capital expenditures through automation, standardization, consolidation, and pension reform is imperative.

In the near term, however, there may be more opportunity for increasing revenue than for reducing costs. One approach would be to identify other ways to subsidize road services. And a subsidy would be helpful: at present, for example, at least half of the NYC DOT budget is really about roads.⁸⁰ Parking regulation, discussed in the next subpart, presents some opportunities to raise revenues while curbing undesirable externalities.

C. Implementing Transportation Demand Management

The City does not break out either its spending on vehicle infrastructure or the value of its roads as assets. For example, the City does not maintain an official count of the street parking spaces in the City that are provided free of charge but that could in principle be subject to the price mechanism. One estimate holds that there are 3 million free spots for the 2.2 million cars registered in the City.⁸¹

On the margin, a residential permit system would curb demand (including from commuters), raise revenue, cut down on insurance and license plate fraud (both of which are sources of concern), and have other beneficial effects.

A permit charge of $150 per vehicle per year would generate revenue of hundreds of millions of dollars annually—and unlike congestion tolls, those funds would go directly to the City, not the MTA. Such a revenue stream could be deployed quickly to upgrade the experience and safety of driving, walking, and biking City streets. Locationally appropriate increases in the price of metered parking (as low as $1.50 an hour in some places—which is lower than in downtown Iowa City, Iowa) and garage parking taxes should be implemented as well.

D. Maximizing the Utility of Public Transportation Services

Although the transit operators that serve the City are overwhelmingly run by state agencies, it would be mistaken to conclude that the City lacks mechanisms for improving their service. As noted above, the large majority of streets—including most major thoroughfares—are owned and operated by the City. The City mostly controls how lanes and uses are allocated.

Bus lanes can be created by the City for major MTA routes, and the City can make them far more effective by stepping up enforcement of restrictions on their use. (After all, it is the City that enforces traffic violations.) The City already automates some bus lane enforcement⁸² and should expand that⁸³ as well as traffic enforcement more generally⁸⁴ to improve safety and walkability.⁸⁵ The City also possesses not only the power to price but to remove street parking, whether with the goal of accelerating bus or private car travel, encouraging transit use, or (as noted above) repurposing the space for development.

E. Making the City Safer and More Livable

The City has the authority and tools to enforce speed limits, bring back and firm up the Dangerous Vehicle Abatement Program,⁸⁶ and adopt other policies targeting the outlier population of reckless drivers whose conduct is currently ignored by Vision Zero road safety policy.⁸⁷

The City’s vast array of urgent safety and livability needs should prompt it to think creatively. The sanitation department used to affix difficult-to-remove orange stickers on the windows of cars that obstructed street cleaners, for example.⁸⁸ Surely cars blocking handicapped spaces, unlawfully obstructing visibility at intersections, or creating certain types of hazards should be considered an equally grave menace.

Similarly, it is commonly said that the NYPD doesn’t want to increase the intensity of non-discretionary traffic enforcement; if that is a true barrier, it is probably easier to fix or sidestep it—for example, by empowering the NYC DOT to issue tickets, as has been tried with other city DOTs—than to persuade suburbanites of the wisdom of congestion pricing.

More broadly, the City should take seriously the diverse menu of available options to supercharge the livability benefits of congestion pricing (or compensate for them, if the program is halted or watered down). For example, there are other ways to accomplish the emissions reduction objective that are within the City’s authority. The City can expand the use of electric vehicles in its own massive fleet of cars and trucks, expand public EV charging infrastructure, or introduce preferential parking for EVs. Even more impactful, it could reduce its reliance on vehicles altogether for performing City functions. These are examples of changes that do not directly substitute for congestion pricing—for example, they do not create a revenue stream or enhance transit service—but they would improve air quality and the City lifestyle product.

Conclusion

The transportation needs of a great metropolis like New York are too important and complex to entrust to those who lack skin in the game.

It is no mystery why congestion pricing—which demands sacrifices of suburbanites for the perceived benefit of city-dwellers—struggled to get underway. And though now operational, the program continues to fight for its legal life. Whether or not the Trump administration’s efforts to terminate it are successful, only New York City itself has the ability to kill off its own capacity to improve transportation. The flip side of this is that the Big Apple has immense power to realize that potential, regardless of what happens to the congestion charge in court.

New York City should capitalize on its existing authority and pursue the dozens of smaller steps urgently needed to become bigger, more prosperous, and more sustainable through better land use and transportation policy. These actions will require major political battles, and some will fail. But this redrawing of the boundaries of the question would position the City where it belongs: in charge of its own destiny.

* Professor of Law & Sandler Faculty Fellow in Corporate Law, University of Iowa College of Law. The author thanks Sean McQuade for research assistance and managing editor Matt Blaszczyk for editing support. Some material in this Article was initially developed in Greg Shill, Congestion Pricing and the Way Forward for NYC, gregshill.substack.com (June 6, 2024), https://gregshill.substack.com/p/congestion-pricing-and-the-way-forward.