News out of City Hall has one topic on the minds of all Manhattan drivers and residents: congestion pricing. Here, we will explore this new initiative and demystify the big, expensive elephant on our streets.
MACRO OVERVIEW
The intended outcomes of the congestion pricing program are traffic reduction, air quality improvement, increased use of public transportation, and more efficient management of road space. The system will use electronic tolling technology to collect fees. Congestion pricing has been implemented in several cities worldwide including London, Stockholm, Singapore, and Oslo. These cities report varying degrees of measurable success.
WHAT? WHEN? HOW MUCH?
New York City's congestion pricing program has been approved and is slated to begin in Spring 2024 pending four public hearings in February and March. It covers the area stretching from 60th street down to the southern tip of FiDi and aims to fund repairs for our aging public transportation system. Drivers will pay a toll for the privilege of crossing into that section of town. The amount will vary depending on vehicle type: $15 toll for passenger cars, $24 for small trucks, $36 for large trucks, and $7.50 for motorcycles.
EXEMPTIONS
There has been supercharged debate over proposed exemptions and logistics. Taxis will pass on a $1.25 surcharge to their passengers to cross into Lower Manhattan, while rideshare apps like Uber and Lyft will pass on $2.50. New Yorkers that make less than $50,000/year can apply for a 50% discount on their toll, but only after the first 10 trips in a month. Additionally, so-called “crossing credits” have been approved. The four tunnels that pour into Lower Manhattan will be partially exempt, with the partial congestion toll being baked into the tolls already in place on the Lincoln, Holland, Queens-Midtown, and Brooklyn-Battery tunnels. Toll credits will amount to $5 per passenger car, $2,50 for motorcycles, $12 for small trucks, and $20 for large trucks.
Notable groups that were left without exemptions include public-sector employees, Manhattan residents above the income threshold of $50,000/year, utility companies, and those with medical appointments in the affected zone.
REALITY
While the program will make navigating Manhattan by car more expensive, most Manhattanites don’t use personal vehicles. Recent reports show that less than 18 percent of residents depend on a vehicle to get around, especially in Midtown and lower Manhattan. The prevailing belief is that if the funds collected are used to improve the MTA infrastructure, getting from point A to point B will become cheaper, more reliable, quicker, and safer for all travelers.
IMPACT ON REAL ESTATE
The question on every Manhattan property owner’s mind is how the program will affect the local real estate market. The short answer is - it's hard to tell. Given the high median income for the area (around $84,000), and the enormous cost of entry for real estate purchases and rentals, it is difficult to imagine a toll having a noticeable impact on the price of homes in and near the impacted zone. On one hand, quality of life in the zone is likely to improve. On the other hand, certain expenses are likely to rise.
Cities that have implemented congestion pricing. report an average 3% increase in property values within the zone and virtually no impact on areas outside of it.
CLOSING
