In mid-June, just weeks before a new congestion pricing policy was to go into effect in New York City, governor Kathy Hochul made an abrupt about face, pulling support for the program and putting it on hold indefinitely.
The program would have charged drivers a daily toll to drive within Manhattan’s busiest and most congested neighborhoods and areas, including SoHo, Times Square, Madison Avenue and the Meatpacking District. While supported by many advocacy groups, politicians and commuters, it also faced opposition from automakers and politicians in New Jersey. Their arguments against the policy range from the negative impact it would have on workers who regularly commute into the city by car and the detriment to businesses, whose trucks would be charged an especially high fee of $24-$36 per day.
But congestion pricing would actually have a beneficial impact on businesses in Manhattan, according to experts. Manhattan is one of the biggest retail hubs in the country housing a store for nearly every major fashion brand. The potential benefits go beyond just benefiting residents and the environment. There are more than twice the amount of people who take public transit in New York City than drive. The increased flow of foot traffic and cleaner, safer streets would be a boon to the city’s many shopping hubs like SoHo and Madison Avenue, according to Rachael Fuss, senior policy advisor at Reinvent Albany, a political advocacy group focused on transparency in New York politics.
“Congestion pricing has three main goals: improving air quality, reducing traffic congestion and fixing NYC’s buses, subways and commuter railroads,” Fuss said. “Meeting these goals will help residents and businesses in Manhattan and across the region by getting people and goods where they need to go faster, safer and with cleaner air.”
Rebecca Fitts, svp of brand strategy at real estate advisory Alvarez & Marsal Property Solutions which works with brands like Patagonia and Kendra Scott, said lowered foot traffic is affecting some parts of Manhattan’s real estate landscape.
“The Lower East Side has been a difficult market for retailers due to low weekday foot traffic,” she said.
Similar programs enacted in cities like Singapore, London and Stockholm have eased traffic, increased air quality, and provided funding for infrastructure and public transit. New York’s version was set to be the first such policy in the U.S.
Congested streets in Manhattan have a negative halo effect on the entire city’s retail environment, according to business advocacy groups. Hochul’s stated reasoning for postponing congestion pricing is to avoid harm to businesses while they’re still recovering from the pandemic. But traffic congestion is more likely to accrue losses for businesses. When the city’s traffic worsens, shipments get delayed and overtime and fuel expenses balloon, according to the Partnership for New York City, a nonprofit representing hundreds of businesses throughout the city.
“This [congestion] policy will generate over $1 billion annually for transit while reducing traffic congestion, which is worse today than ever before,” said Tom Wright, president and CEO of the Regional Plan Association, a policy group focusing on issues affecting New York, New Jersey and Connecticut. “Vehicle travel speeds in Midtown now average just 5 miles per hour, 3% slower than in 2019. The streets are full, and the best way to grow the regional economy is to reduce congestion and fund mass transit.”
The possibility of congestion pricing isn’t dead yet — Hochul has said the policy will be revisited in the near future. And according to Fuss, despite the holdup, congestion pricing is inevitable in the city.
“There are no viable policy alternatives that meet [the city’s goals], and finding another way to generate $15 billion to fix the public transit system is not going to be easy,” she said. “Lawsuits from environmental groups are coming any day now challenging the governor’s pause of the program. Between the lawsuits and lack of funding alternatives, we believe the governor will come to the conclusion that congestion pricing is the best path forward to improve New York City’s streets, subways and air.”
