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58 I N T E R N AT I O N A L P E R S P E C T I V E S O N R O A D P R I C I N G PRICING TRAFFIC, PACING GROWTH qualify" decision would require weighing the savings in house payments against potentially significant marginal Robert Dunphy driving costs. Asking home buyers to pay the cost of sprawl could help reverse the middle-age spread of most New developments in transportation pricing and contin- regions and create a sizable new funding source. It ued shortfalls in public coffers indicate that the time is would also protect residents of new developments from right for a different approach to funding transportation. a future of being stuck in traffic. Significantly, expanded use of road pricing promises also Four recent experiences in pricing demonstrate the to help pull new housing inward, in contrast to the cur- growing acceptance of a price-based approach to financ- rent system under which people often accept longer com- ing infrastructure and managing demand; they also pro- muting distances in an attempt to find lower-priced vide good test cases to help us understand the land use housing. Several new pricing strategies have the poten- implications of various pricing approaches. Land use tial to exert an especially powerful influence on land use results from the following experiments can be expected patterns. to generate informative results in the coming years. At The first is a street service fee, which would shift the one end of the spectrum, HOT lane demonstration proj- lion's share of highway finance from the gasoline tax ects are the "light beer" of pricing even though they to a street service fee paid by the month, similar to fees require considerable efforts for successful implementa- for cable TV or the Internet. This approach would tion. At the other end, London's congestion charging result in an immediate drop in the price of gasoline, scheme represents a "deep pricing" approach and offers simplify the adjustment of user charges, and protect a new model for many cities struggling to deal with the transit revenues. A monthly utility or telecommunica- effects of car traffic. tions fee is already familiar to most Americans and thus would not represent a wholly foreign concept. It Unprecedented improvements in London's traffic could also make car taxes more palatable by spreading brought about by London's program have rewarded them over a year rather than imposing them in one or Mayor Ken Livingstone with strong public support. two payments per year, as is typical for most car licens- A "London-like" proposal for New York could ing fees. A simple fee would be based on annual result in similar levels of congestion relief, as well as an mileage estimates adjusted regularly for actual use. infusion of between $7 billion and $19 billion for badly Technology could allow the charging of higher rates needed transportation investments. on congested facilities. In Minnesota, which has studied pricing since The second is an honest pricing approach. The grow- 1994, the stars are aligned to create the state's first HOT ing acceptance of charging solo drivers for an uncon- lane conversion on Interstate 394, reinforced by the gested commute in HOT lanes creates a new need for money. opportunity to fund radial highways needed to accom- The Seattle, Washington, region, whose 205-mile modate suburban growth. New radial roads needed to network of carpool lanes is one of the nation's largest, is serve suburban expansion would all be priced. Rather about to proceed with its first HOT lane and has stud- than choosing the largest house for which a buyer qual- ied an extensive pricing system for a regional network ifies and worrying about the traffic later, a "drive to of 131 miles on seven major highways.