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We talk a lot about mobility and traffic congestion on this blog — particularly in the context of Toronto — and that's because it remains a problem and we continue to avoid any sort of big and meaningful moves. Instead, we like to politicize the problem and find scapegoats, such as bike lanes. So I think it's important to have regular reminders that we do actually know how to address this problem. It's a choice we and other cities can make.
Here are three examples and possible solutions:
Copenhagen: Over 60% of residents use a bicycle to commute to work or school. It is one of the most bike-friendly cities in the world. You've probably heard this before and are prepared to say, "yeah, well, we're not Copenhagen." But it's important to point out that neither was Copenhagen. In the early-to-mid 70s, the modal split for bikes was somewhere between ~10-15%.
Singapore: This is one of my favorite examples. Singapore is home to the world's first congestion charge zone (1975). And it operates on a dynamic pricing model, meaning that traffic congestion is continually monitored and road prices are adjusted to ensure that traffic always flows at certain minimum speed. It's a highly effective tool and there's no shortage of global case studies. Here's Miami.
Zurich: Despite being one of the wealthiest cities in Europe, car ownership is relatively low (~40-45% of the population, compared to ~60-65% in Toronto). This is due to a great public transit system (Swiss trains and stuff) and because of strict parking policies, among other things.
Zurich has a hard cap on the number of parking spaces in the central part of the city. It is set at 1990 levels, which works out to about 7,600 total parking spaces. What this means is that if somebody, like a big bad developer, wants to build off-street parking, they need to simultaneously reduce the parking supply somewhere else. You can't exceed the cap.
This obviously discourages car usage and moderates the demand for city streets, but it also serves as a clever way to slowly replace on-street parking with better uses, such as an enhanced public realm. This policy has been in place since 1989 and it has had a dramatic effect on car usage. Between 2000 and 2021, the share of car trips in the city decreased from 40% to 29%.
I know that many of you will scoff at these solutions and think "yeah, there's no way." But this is how you make traffic better. You reduce demand and use our finite amount of road capacity more efficiently. So we can either make bold moves or we can continue to complain about traffic.
Cover photo by Claudio Schwarz on Unsplash
Zurich is today one of the hottest real estate markets in Europe:
And based on UBS' Global Real Estate Bubble Index for 2023, it also has the highest bubble risk:
According to Bloomberg, there are a number of reasons for this: low housing supply, a constrained geography, a key interest rate that is less than half of the ECB's, and Google. Google is one of the largest employers in the city, with more than 5,000 employees. And supposedly the starting salaries for a software developer there can reach 200,000 Swiss francs (nearly CA$300,000).
I also just learned that the minimum wage in Switzerland is 23.90 Swiss francs per hour. Based on 160 hours per month, that's 3,824 francs per month or 45,888 francs per year. In Canadian dollars, that's over $68,000 per year. Pretty healthy. Although, as we can see here, Zurich is also expensive.
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.