A Pigovian tax is a tax on market activities that produce some kind of negative externality for society. The basic idea behind the tax is to try and use it to correct something that is happening, but that isn't all that desirable. Examples of negative externalities might include things like pollution and traffic congestion.
Traffic congestion is a bad thing, which is why I have long been a supporter of road pricing. We know how to do this. It has been proven to work in countless cities, including Singapore, London, Stockholm, as well as many others. But in most cases, there isn't the political will. That has certainly been the case here in Toronto.
Maybe this post will help.
A recent study by ETH Zurich, the University of Basel, and ZHAW has looked at the effects of Pigovian pricing on mobility within Switzerland. The study included 3,700 participants and spanned both French and German-speaking parts of the country.
The way the study works is pretty simple. They took thousands of people, gave them a transportation allowance (in Swiss francs), and then assigned costs to the various mobility options. These costs were intended to be commensurate with their amount of negative societal impact.
Driving, for example, came at a cost of 0.1 Swiss francs per kilometer. Whereas participants actually earned money for walking, since you could fairly easily argue that walking produces a net benefit to society. At the end of the four-week experiment, participants were allowed to pocket whatever money was left in their transportation wallet. So in theory there was an incentive to spend less.
What the researchers were trying to do was simulate Pigovian transport pricing and give people a more direct understanding of the societal costs associated with how they move around. And based on their results, it looks to have worked.
What the results show is that when you start pricing transport in this way, all mobility declines slightly (the "all modes" line). But that the biggest hit is, not surprisingly, driving. Car use declined by almost 5%, whereas walking, biking, and using public transit all increased. (The price elasticity of demand for car travel was found to be similar to when the cost of gas increases -- people drive a bit less.)
The authors go on to argue that longer-term Pigovian pricing is likely to produce an even greater impact on mobility, as people would likely adjust and start making bigger decisions about where and how they live. That seems plausible to me.
For a full copy of the study, click here.
A Pigovian tax is a tax on market activities that produce some kind of negative externality for society. The basic idea behind the tax is to try and use it to correct something that is happening, but that isn't all that desirable. Examples of negative externalities might include things like pollution and traffic congestion.
Traffic congestion is a bad thing, which is why I have long been a supporter of road pricing. We know how to do this. It has been proven to work in countless cities, including Singapore, London, Stockholm, as well as many others. But in most cases, there isn't the political will. That has certainly been the case here in Toronto.
Maybe this post will help.
A recent study by ETH Zurich, the University of Basel, and ZHAW has looked at the effects of Pigovian pricing on mobility within Switzerland. The study included 3,700 participants and spanned both French and German-speaking parts of the country.
The way the study works is pretty simple. They took thousands of people, gave them a transportation allowance (in Swiss francs), and then assigned costs to the various mobility options. These costs were intended to be commensurate with their amount of negative societal impact.
Driving, for example, came at a cost of 0.1 Swiss francs per kilometer. Whereas participants actually earned money for walking, since you could fairly easily argue that walking produces a net benefit to society. At the end of the four-week experiment, participants were allowed to pocket whatever money was left in their transportation wallet. So in theory there was an incentive to spend less.
What the researchers were trying to do was simulate Pigovian transport pricing and give people a more direct understanding of the societal costs associated with how they move around. And based on their results, it looks to have worked.
What the results show is that when you start pricing transport in this way, all mobility declines slightly (the "all modes" line). But that the biggest hit is, not surprisingly, driving. Car use declined by almost 5%, whereas walking, biking, and using public transit all increased. (The price elasticity of demand for car travel was found to be similar to when the cost of gas increases -- people drive a bit less.)
The authors go on to argue that longer-term Pigovian pricing is likely to produce an even greater impact on mobility, as people would likely adjust and start making bigger decisions about where and how they live. That seems plausible to me.
For a full copy of the study, click here.
Building height and density are not one and the same. You can have tall buildings configured in a low-density way (think post-war towers in the park). And you can have low/mid-rise buildings configured in a high-density way (think Paris and Barcelona). This is one of the reasons why it is important to decouple density and tallness when thinking about our cities.
This line of thinking is the approach that a recent study took when trying to determine the optimal built form for minimizing climate impact. In the study they define four building typologies: 1) high density, high-rise, 2) low density, high-rise, 3) high density, low-rise, and 4) low density, low-rise.
What they found was that taller environments tend to have higher life cycle GHG emissions, but that lower-density environments are (obviously) far more land consumptive. To determine life cycle GHG emissions they looked at both embodied and operating emissions, which is why the taller stuff didn't score as well under their methodology. There's typically a lot of concrete and steel in tall buildings.
This lead the team to conclude that if you want to optimize around climate impact, you should probably aim for that perfect middle ground: dense, but not super tall.
But as Joe Cortright (City Observatory) rightly pointed out in his email newsletter, one of the big limitations of this analysis is that it does not consider transportation-related impacts. And since we know that transportation is one of if not the largest source of GHG emissions and that how we get around is heavily dependent on land use patterns, it is probably an important piece to consider.
Photo by Alfons Taekema on Unsplash
Back in 2017, the City of Buffalo introduced something known as the "Green Code." It was the first overhaul of its zoning code in over 60 years. I wrote about it here. One of most notable changes as part of the Green Code was the complete elimination of parking minimums. Which is another topic that has gotten a lot of air time on this blog.
Now that it has been a few years, Buffalo provides an interesting case study: What do developers do once you eliminate parking minimums in a mid-sized city? I mention mid-sized because I think the size of the city is relevant here. There is a common argument that you can't eliminate parking minimums unless you're in a big and transit-rich city. "This isn't [insert big city]. People drive here." I am sure that many of you have heard this before.
But is that really the case? Here is what Daniel Baldwin Hess & Jeffrey Rehler found when they studied the development response to removing parking minimums in Buffalo:
The study looked at 36 major developments in the first two years after parking minimums were eliminated
In aggregate, the 36 developments built 21% less parking spaces than what was previously mandated, likely demonstrating that the old zoning code was resulting in an excess supply of new parking
Mixed-used developments (of which there were 14, generally consisting of residential + retail) built 53% less parking than what was previously required
One exception to this trend is that single-use projects (both residential and commercial) built either the same or more parking (most of these projects were in the suburbs outside of the downtown core)
What this suggests to me is that the previous zoning code was maybe appropriate for what the market was demanding (for parking) in suburban locations. Maybe. But it was certainly overshooting what the market was and is willing to accept in more urban locations in Buffalo. Mixed-used (i.e. being able to support retail at grade) is likely a good measure of the project's urbanity.
Perhaps more importantly, I think this study shows that developers are incentivized to build what the market wants -- no more and no less. Building parking that nobody wants is bad business. As is building too little parking such that you can't rent or sell your space(s). A Goldilocks parking ratio is what you're after, but it is constantly changing and finding it can be a bit of an art. Eliminating parking minimums is a good way to let the market try and figure it out.
Photo by Seth Yeanoplos on Unsplash
Building height and density are not one and the same. You can have tall buildings configured in a low-density way (think post-war towers in the park). And you can have low/mid-rise buildings configured in a high-density way (think Paris and Barcelona). This is one of the reasons why it is important to decouple density and tallness when thinking about our cities.
This line of thinking is the approach that a recent study took when trying to determine the optimal built form for minimizing climate impact. In the study they define four building typologies: 1) high density, high-rise, 2) low density, high-rise, 3) high density, low-rise, and 4) low density, low-rise.
What they found was that taller environments tend to have higher life cycle GHG emissions, but that lower-density environments are (obviously) far more land consumptive. To determine life cycle GHG emissions they looked at both embodied and operating emissions, which is why the taller stuff didn't score as well under their methodology. There's typically a lot of concrete and steel in tall buildings.
This lead the team to conclude that if you want to optimize around climate impact, you should probably aim for that perfect middle ground: dense, but not super tall.
But as Joe Cortright (City Observatory) rightly pointed out in his email newsletter, one of the big limitations of this analysis is that it does not consider transportation-related impacts. And since we know that transportation is one of if not the largest source of GHG emissions and that how we get around is heavily dependent on land use patterns, it is probably an important piece to consider.
Photo by Alfons Taekema on Unsplash
Back in 2017, the City of Buffalo introduced something known as the "Green Code." It was the first overhaul of its zoning code in over 60 years. I wrote about it here. One of most notable changes as part of the Green Code was the complete elimination of parking minimums. Which is another topic that has gotten a lot of air time on this blog.
Now that it has been a few years, Buffalo provides an interesting case study: What do developers do once you eliminate parking minimums in a mid-sized city? I mention mid-sized because I think the size of the city is relevant here. There is a common argument that you can't eliminate parking minimums unless you're in a big and transit-rich city. "This isn't [insert big city]. People drive here." I am sure that many of you have heard this before.
But is that really the case? Here is what Daniel Baldwin Hess & Jeffrey Rehler found when they studied the development response to removing parking minimums in Buffalo:
The study looked at 36 major developments in the first two years after parking minimums were eliminated
In aggregate, the 36 developments built 21% less parking spaces than what was previously mandated, likely demonstrating that the old zoning code was resulting in an excess supply of new parking
Mixed-used developments (of which there were 14, generally consisting of residential + retail) built 53% less parking than what was previously required
One exception to this trend is that single-use projects (both residential and commercial) built either the same or more parking (most of these projects were in the suburbs outside of the downtown core)
What this suggests to me is that the previous zoning code was maybe appropriate for what the market was demanding (for parking) in suburban locations. Maybe. But it was certainly overshooting what the market was and is willing to accept in more urban locations in Buffalo. Mixed-used (i.e. being able to support retail at grade) is likely a good measure of the project's urbanity.
Perhaps more importantly, I think this study shows that developers are incentivized to build what the market wants -- no more and no less. Building parking that nobody wants is bad business. As is building too little parking such that you can't rent or sell your space(s). A Goldilocks parking ratio is what you're after, but it is constantly changing and finding it can be a bit of an art. Eliminating parking minimums is a good way to let the market try and figure it out.
Photo by Seth Yeanoplos on Unsplash
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