Back in 2019 New York State passed a law authorizing the implementation of congestion pricing here in the City. First what is it?
Congestion pricing levies tolls on vehicles entering the Central Business District of Manhattan. This is defined as all areas south of 60th Street, but excluding the West Side Highway and the FDR Drive. You can only be charged once a day, even if you leave and return.
Range of Proposed Central Business District Toll Prices:
Benefits:
- $1 Billion annually to fund capital improvement projects at the MTA
- 20% reduction of vehicular traffic in the CBD
- Better air quality
- Improved street level experience for all
- Reduced parking placard abuse (people who abuse the system for free parking will now have to pay the toll)
- Decreased travel times in the CBD
Costs:
- Increased cost or travel time for those who drive through Manhattan daily (such as from Brooklyn to Jersey)
- Motorists driving from Jersey already pay tolls (and you can’t blame them for avoiding NJ Transit trains!)
- Could have a negative impact on owners of retail properties if foot traffic falls significantly
When: Late 2023, earliest.
What Does It Mean For Residential Real Estate?
- In other places that have implemented congestion pricing, the prices of properties in the affected zone have risen. London saw a $15 billion increase in property values inside the affected area. We expect the same trend here.
- Traffic right outside of the zone (in this case the 60s both East and West Sides) will see increased vehicular traffic as drivers circle looking to park and avoid the tolls. This will mean pricing pressure in these areas.
- Parking in the 60s will get even more expensive than it is now.
- Outer borough locations poorly served by subways will face pricing pressure as driving will become a less attractive option and those commutes can be grueling otherwise.
- People from Staten Island will be mad. Very.
For all the belly aching and hand wringing about congestion pricing, who doesn’t want less traffic, better air quality and for the MTA to get some badly needed capital improvements? Not to mention the upward pressure on real estate prices? I say, congestion pricing? Bring it on.
Have a great weekend!