Tolling Roads Could Bring Down Housing Prices

Comprehensive road pricing through tolls and congestion charges could play a major role in reducing housing prices and sprawl, according to a new study.

"An elaborate modeling of housing prices and traffic congestion in cities across the US concludes that financing roads with comprehensive congestion priced tolls rather than taxes rather would provide major benefits in reducing housing prices and sub-optimal densities - 'sprawl' - as well as reducing the familiar delays and uncertain travel times. Moving to tolls or other direct road use charges will significantly improve overall welfare, economic efficiency and standards of living, the study says. Authors are Ashley Langer University of California Berkeley and Clifford Winston, Brookings Institution. The study is reported in Brookings-Wharton Papers on Urban Affairs 2008.

It's a complex work. The methodology attempts to model the effects of congestion pricing on home location decisions, home prices and density. It allows for changes in land use and density, but sets limits to density permitted. Existing congestion conditions in various metro areas are fed into the model, and an array of different values of time saved provided for. The model differs from earlier ones in that it allows for that heterogeneity of values of time saved rather than assuming people are the same and using an average.

The model allows for the fact people will sort into commute distances inversely with their value of time, so different people will react differently to congestion pricing and gain different benefits.

The overall effect of comprehensive road pricing managed for free flow is likely to be decreased housing prices, higher density living especially in middle suburbs. Pricing encourages people to live somewhat closer to their work."

Full Story: Urban tolls would reduce cost of housing, provide major social benefits study shows

Comments

building block set

NEW! Build the world you want to see

Irresistible block set for adults when placed on a coffee table or desk, and great fun for kids.
$25
Red necktie with map of Boston

For dads and grads: tie one on to celebrate your city!

Choose from over 20 styles imprinted with detailed city or transit maps.
$44.95

City Coasters

Hand-drawn engraved maps of your favorite neighborhoods are divided up across 4 coasters making each one unique.
$36.00
Book cover of Unsprawl

Unsprawl: Remixing Spaces as Places

Explore visionary, controversial and ultimately successful strategies for building people-centered places.
Starting at $12.95