Thursday, June 21, 2007

Chicago Congestion Fee: Some Initial Reactions

Alderman Burke's proposal to study the imposition of a London-style congestion fee system in Chicago is probably the most interesting thing to have emerged from the seemingly endless Moving Beyond Congestion effort to raise more money for transit in this region.

The Alderman didn't help the cause of the congestion fee system by taking the bait of the reporters setting up yet another Chicago vs. suburbs battle:

And what about those who consider a congestion fee a back-door city income tax on suburbanites who work in Chicago?

"One could argue that, since they're using our streets and not paying the wheel tax that Chicago residents pay, that it would be a fair way of spreading around the responsibility for funding some of our expenses," the alderman said.

This provoked Dennis Bryne to emerge from his suburban bunker and fire a blast at the concept of congestion fees:

If nicking suburbanites for the costs of clogged downtown streets is the real purpose of Burke's proposed ordinance, why not go all the way: Impose a whopping toll or fine only on anyone who drives into downtown without a City of Chicago sticker? That way Burke would get the huge revenue stream he wants for the money-sucking CTA, and Chicagoans themselves would get to enjoy a less congested downtown, without having to pay a toll. Except that such a scheme probably would be illegal, because (A) public streets by law are equally public, and (B) the taxes of every motorist in Illinois help pay for city streets.

Byrne allows that there is "something appealing" about a congestion fee because those that are using a scare resource (highway space) and imposing costs on others (congestion/air pollution) are paying at least some of these costs.

Nevertheless, he comes down against congestion fees in the end. His argument is that congestion is the product of the dense urban environment at the core of the region. That dense urban environment no longer is necessary in his opinion for people to carry on most businesses:

Maybe a vehicle congestion tax isn't such a good idea after all. If congestion is the real problem with downtown, then maybe we should rethink what downtowns should look like.

Today's downtown is a hand-me-down from the late 19th Century, when technology forced people into more face-to-face communications. You could use the telegraph (assuming you wanted to wait for the messenger) or a novelty called a telephone, which wasn't so grand because the person you wanted to speak with didn't always have one. Sellers, buyers, suppliers, traders, lawyers, clerks -- they all had to communicate with each other, and that meant they had to be near each other, if not face-to-face. Also, people couldn't commute long distances; they could live no farther than the end of the horse-drawn streetcar line. Thus, skyscrapers and high downtown densities.

But those densities might be obsolete thanks to the telecommunications revolution. You can go through an entire day at the office without actually seeing a seller, buyer, supplier, trader or lawyer. It's why Sears could move its giant merchandise group out, over the horizon, to Hoffman Estates. It's as if congestion is the price we pay so some people can "do lunch" together.

Byrne thus asks why are we subsidizing a congested downtown through mass transit subsidies and the like when most business activity can be done in a less dense environment. He concludes that congestion fees address a problem of the government's own making through a variety of subsidies of downtown businesses, including transit subsidies.

Byrne's piece thus poses the fundamental question whether disinvestment in public transit serving downtown Chicago will have a harmful effect on the overall Chicago economy. Contrast Byrne's sanguine view that businesses will shift to less dense areas suitable for today's electronic-based functions conflicts with that of the Metropolis 2020 folks, who warned recently that keep public transit funding at current levels will be an "unmitigated disaster for the economy of northeastern Illinois." (See also warning that cuts in SEPTA service would harm Philadelphia economy.)

Some quick thoughts:

1. Byrne is almost certainly wrong that today's businesses no longer need face-to-face interactions and thus do not need high-density working environments. While it is true that runners, messengers and the like have been replaced by electronic data transmission, face-to-face interaction is still the key to creativity and high-level business work. Bryne's dismissive statement that "it's as if congestion is the price we pay so some people can 'do lunch' together" shows a profound lack of appreciation for the kinds of environments that generate long-term, high-quality economic growth. As one who has worked in both center city and suburban environments, I can attest to the dulling effect of suburban isolation on business creativity.

2. Byrne may be wrong that the government is more heavily subsidizing congestion than it is subsidizing sprawl. A recent study by a group called Good Jobs First funded by the Ford Foundation found that State of Illinois job subsidies were targeted to suburban businesses rather than businesses in the urban core. While this is but one type of subsidy it may be indicative of heavier public financial support for suburban sprawl than Byrne is willing to acknowledge.

3. An interesting question is whether congestion fees, by speeding auto traffic in the Chicago central area, would make the area less pedestrian-friendly and ultimately lead to lower densities. Hopefully, the City would not succumb to the siren sound of the traffic engineers who would want to repeat stunts like reducing pedestrian crossings across Lake Shore Drive in an effort to increase traffic speed, volume and hence revenue.

4. Byrne and an occasional poster to this blog appear to share the view that downtown property interests are benefiting from the existence of a public transit system centered on Chicago's Loop without paying their fair share. The poster suggests some kind of a fee or tax be imposed on property holders that benefit directly and substantially from the transit system. If the downtown interests oppose a congestion fee, as is likely, then does a revenue raise from the property interests for transit purposes makes some sense?


Anonymous said...

I agree with Byrne on two points:
1. Telecommuting does reduce the need for a dense office district. I used to work at an office and I work more effectively now at home. Saves me a bunch on gas and transit fares.
2. While I don't know whether downtown interests pay more or less than their fair share, I do endorse the concept that since they have the benefit of the Metra and CTA L hubs, they should pay for it, with some sort of special district fee. I so wrote my representatives. You undoubtedly question whether there should be suburban office development, but the businesses that are located there (such as those in the Lake-Cook Transit Management Agency) do subsidize the reverse feeder service (apparently not enough, though, as Pace's doomsday plan threatens to cut it, except the one new route also supported by CMAQ). The downtown businesses have the benefit of CTA and Metra service without paying additional RTA taxes for it.

Also, with regard to Burke's motivation, Burke admitted that he was more concerned with the revenue generated by the red light cameras than promoting safety. I don't understand the problems with the GPS detectors, because intersections with cameras have warning signs ahead of them.

Anonymous said...

No redirect and no diversions! What is going on with opaque governance ammendments?

Anonymous said...

It is a well established fact that sprawl is subsidized more by taxpayers than the dense urban environment. As one example, just think of all the roads and utilities that need to be built to serve the low-density suburban areas. City of Pittsburgh has completed a study recently, which analyzed what the cost of development "as usual" and "smart develepment" (which is still much less dense than any downtown) would be for the next 20 years. And the result was shocking: suburban sprawl will cost 13 billion in public money, while "smart development" only 2 billion. For the 11 billion you fund and maintain a public transportation system much better than anything that ever existed in Chicago. So, excuse me, Mr. Byrne, do your homework: it is the endless suburbs and extraburbs that "suck" public funding, not the sustainable development of the the city or its downtown.

Tom Bamonte said...

Anonymous #2--

Is this the cite to the study you reference:

If not, please supply.

Anonymous said...

Byrne is full of crap. Some people can do their work anywhere; some *need* face-to-face. But, for most people, it is very valuable and takes a lot of money/work to replace.

To explain: If I run a business, there are a lot of people I buy from, people I sell to, and employees who are crucial to the business. Seeing these people regularly creates trust: I understand their emotions, when they are comfortable with a situation, when they are unhappy, etc -- and often LONG before they give voice to those feelings.

I worked for years with people in London; and, trying to work together over the phone and email was miserable. But when I traveled over there and worked with them in person, the problems were cleared up within a week.

Face-to-face business is alive and kicking -- and will be for as long as people have emotions.

Anonymous said...

It was weird to see the good jobs first study cited in the post leading off with a quote from none other that Dennis Byrne. They quoted a 1994 column of his assailing the state's subsidy of the Motorola plant in Harvard. I wonder why he felt then that the city has a right to say "stop", but now he thinks the CBD is an over-subsidized relic of the 19th century.

I read these types of comments a lot -- that in the new modern age of the future, where everyone telecommutes, dense cities are unnecessary. It seems the opposite to me. If everyone just downloaded their work from home and shopped online, dense cities would be even more attractive. It would eliminate rush-hour traffic congestion. And because nobody would need a car to get to work, people would want to live in areas where a car is unnecessary.