Income-Based Equity Impacts of Congestion Pricing—A Primer

Introduction

There are three principal types of equity considerations that relate to the distribution of benefits and burdens of toll or congestion-pricing projects:

1. Income equity: Are low-income groups negatively affected? Is a system that places the burden of travel-behavior change disproportionally on low-income individuals fair?
2. Geographic equity: Are some parts of the region made worse off than other parts? Will traffic diversion from tolled routes negatively impact neighborhoods or reduce performance on alternative toll-free routes?
3. Modal equity: Are public perceptions with regard to encouragement of multi-modal transportation addressed? For example, some believe that it is not fair to offer the same travel-time savings to those who pay a toll as to those who “do the right thing” by carpooling or taking transit.

This primer focuses on the first type of equity—income equity. Equity concerns with regard to income have often been raised about congestion pricing. The benefits of congestion pricing may not be distributed equally among all users. High-income users are more likely to remain on the highway, pay the congestion fee, and benefit from a faster trip. Low-income users may be worse off if they choose other less-expensive times, routes, or modes. When public use of infrastructure assets is deliberately made more expensive at certain times, low-income people and those concerned about their welfare may raise legitimate concerns about equity.

Toll roads impact environmental justice in at least two ways: impacts from the alignment and impacts from the ability to take advantage of better service. This primer focuses on the second impact—the ability to take advantage of better service—because the focus is on congestion pricing as applied to existing facilities. This primer presents information on the low-income equity issue in three sections as follows:

1. An overview of what is known about the low-income equity issue on the basis of current literature,
2. Results from studies conducted under the U.S. Department of Transportation’s (DOT’s) Value Pricing Pilot (VPP) Program, and
3. What is known about the issue, at this point in time, from DOT’s urban partners funded under the Urban Partnership Agreement (UPA) Program and the Congestion Reduction Demonstration (CRD) Program.

The VPP Program was established by the U.S. Congress as the Congestion Pricing Pilot Program in 1991. It was subsequently renamed the VPP program under Section 1216 (a) of the Transportation Equity Act for the 21st Century (TEA-21) in 1998, and continued through the 2005 Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU).

The UPA Program was announced by U.S. DOT in May 2006 and was followed by the CRD
Program, initiated in 2007. Both programs were designed to address congestion problems, with particular emphasis on establishing partnerships with major urban areas to make significant reductions in roadway congestion by using congestion pricing as a key strategy. There are currently six urban partner cities—Miami, FL; Atlanta, GA; Minneapolis, MN; Seattle, WA; San Francisco, CA; and Los Angeles, CA. New York, NY, was originally designated an urban partner but lost its urban partner status in April 2008 after it failed to obtain the legislative authority needed to implement congestion pricing.

Map. A map of the United States showing U.S. Department of Transportation urban partners under the Urban Partnership Agreement and Congestion Reduction Demonstration Programs. The highlighted cities are Seattle, San Francisco, Los Angeles, Minneapolis-St. Paul, Atlanta, and Miami.

Map showing U.S. Department of Transportation urban partners under the Urban Partnership Agreement and Congestion Reduction Demonstration Programs.