Tag: road pricing

• Beyond left and right in city building

  I tweeted this morning (actually it was a post I scheduled weeks ago) that I generally don’t understand why so many city-building issues become political.

  The example I gave was corner stores, more specifically small-scale retail within neighbourhoods. Does wanting to be able to easily walk to amenities from my home place me on the left or the right of the political spectrum?

  I thought of this because every now and then someone will respond to one of my posts and sling some political moniker back at me in an attempt to debunk my argument.

  And each and every time it makes me stop and think: Am I really that? I don’t like the idea of being neatly placed in a particular bucket, and that bothers me far more than someone disagreeing with my point.

  When I ask AI to tell me what it thinks of me based on over 13 years of daily city-building posts, it says this:

  Based on your writing on brandondonnelly.com, you do not fit neatly into conventional partisan left/right buckets. Instead, your positions place you firmly in the pro-growth, market-urbanist / “Abundance Agenda” quadrant: culturally and socially progressive, strongly urbanist, yet grounded in market discipline, capital allocation, and regulatory pragmatism.

  This doesn’t sound wrong.

  But the result is that I often sit on different sides. I’m for bike lanes and neighbourhood retail, but I’m against inclusionary zoning and I don’t believe that rent control as a broad tool achieves its desired housing outcomes.

  At the same time, I also think you can look at specific issues from completely different perspectives.

  Bike lanes, for instance, are typically associated with centre-left progressives, but I see them as a capital-efficient, high-throughput form of mobility that increases individual choice and helps wean us off government-subsidized roads.

  Road pricing (or congestion charges) can similarly be viewed as a left-leaning tool that curbs emissions, promotes transit usage, and assuages the bike-lane crowd.

  But it’s actually the most fiscally conservative way to price roads. It’s classic Milton Friedman. Congestion is merely an economic failure: an artificial shortage caused by zero user cost on a scarce good.

  If I’m an advocate for anything on this blog, it is looking at each issue independently, trying to arrive at some understanding of the truth, and then being open to completely changing my mind if I end up being wrong.

  2026.11.09

• The geometric impossibility of the car-centric metropolis

  

  The Katy Freeway in Houston has 26 lanes at its widest, and after a $2.8 billion expansion between 2003 and 2008, commute times reportedly increased by 30-50%.

  Highway 401 in Toronto has 22 lanes at its widest and is ranked as the busiest highway in North America with an average of ~500,000 vehicles per day. It does not flow freely at most times throughout the day.

  Avenida 9 de Julio in Buenos Aires is one of the widest surface avenues in the world, but traffic congestion didn’t improve until lanes were converted into a bus rapid transit line.

  Sheikh Zayed Road in Dubai ranges from 12-16 lanes and acts as the main high-capacity spine for what is a linear, car-dependent global city. It too is known for its traffic congestion.

  The common thread among all of these examples is that, irrespective of the width and number of lanes, none of these cities have solved the problem of traffic congestion. I challenge you to think of a counterexample. And that is because it is impossible to build a large, economically vibrant global city centered primarily around private automobiles without suffering severe traffic congestion.

  The car is the most spatially inefficient mode of transport for cities, and this doesn’t change with tunnels or with autonomous vehicles (at least sufficiently to make this statement wrong). The fundamental issue is one of space: too many cars for a finite amount of road capacity.

  People who live in car-dependent communities are reluctant to accept this reality, but the only proven solution to congestion is to reorient away from the car toward more efficient modes of transport, namely mass transit. And one of the most effective ways to make this switch is to price roads and congestion.

  This is not to say that individual cars don’t have a place in global cities; they of course do. It is to say that it’s impossible to rely on them as the primary means of mobility without there being negative consequences.

  It’s also worth pointing out that one of the core features of cities is agglomeration economies, which is to say that the spatial concentration of activities leads to cost savings, productivity gains, and greater innovation. Cars demand the exact opposite: spatial dispersion.

  Which would you rather optimize for?

  2026.10.18

• Why Waymo’s arrival in Toronto is our chance to price the roads

  Today, Waymo announced that it has started training its vehicles on the streets of Toronto, with the goal of welcoming riders in 2028. This is exciting. I wish the timeline were shorter, but whatever, I’ll take it.

  “Expanding into Canada marks an important milestone in Waymo’s global journey,” said Waymo co-CEO Tekedra Mawakana. “Toronto is one of the world’s great cities — innovative, diverse, and forward-looking. We’re proud to bring the Waymo Driver to Canada’s largest city and to partner with the vibrant business, arts and cultural communities that share our commitment to safer streets and more accessible mobility.”

  But I also agree with Matt Spoke of Toronto Standard that this is a perfect opportunity to start talking seriously about congestion pricing. As we all know, road pricing is generally unpopular until it’s implemented and people see the benefits. To date, this obstacle has blocked Toronto from taking serious action around traffic congestion.

  Autonomous vehicles are different. I think it would be politically pretty easy to levy congestion charges strictly on autonomous vehicles. Most people aren’t going to care about “the machines.” And it would be the proactive thing to do.

  Based on the safety data we have on AVs, none of us should be driving cars anymore. This means it’s only a matter of time before AVs become the majority of vehicles on the road. I will bet you that my daughter will never drive her own car (unless she becomes an old-school motorcar enthusiast).

  Implement road pricing for AVs today and nobody will notice. But in 10 years, it will be viewed as positively clairvoyant.

  2026.10.16

• Toronto’s bike lane pendulum

  This week, the Province of Ontario started work on its plan to remove about 19 kilometres of bike lanes in Toronto on major streets such as Bloor Street, Yonge Street, and others. The plan is to restore motor vehicle lanes, push bike lanes to secondary streets, and “keep drivers moving.” However, work did not start without protest. Hundreds of cyclists have been protesting this week, and a handful of arrests have been made.

  The thing about bike lanes in Toronto, and other places, is that they tend to follow a political pendulum. We have a history of building bike lanes, and then paying lots of money to rip them out. It’s of course wasteful, but bike lanes are divisive and they can make for good politics. Recent polls suggest that the majority of Torontonians support removing them on major streets. And I can understand why. We’re all frustrated with traffic congestion!

  But here’s what I would say in response to what’s happening this week:

  • The city should be making the decision, not the province.
  • A street like Bloor serves as an important east-west artery in our cycling network. Toronto’s grid does not have a secondary street equivalent.
  • Toronto needs more major streets like Bloor. It needs a bold 21st-century masterplan.
  • It is true that some sections, such as in Etobicoke, do have lower cycling ridership, but every lane needs to be evaluated in terms of the broader network.
  • Built form dictates behaviour.
  • Successful cities must be multi-modal.

  Traffic congestion is no doubt a major problem in Toronto, but we’re nipping around the edges and unwilling to make big, bold changes. The keys to solving traffic congestion are appropriate land-use policies, road pricing, and investment in non-car forms of urban mobility. Pretending otherwise is just fooling ourselves. To solve congestion, Toronto needs to reduce automobile dependency.

  2026.10.15

• Why uploading Toronto’s highways to the province won’t fix traffic congestion

  In 2023, the City of Toronto announced a deal that would “upload” the Gardiner Expressway and Don Valley Parkway from the city to the province. This was a big deal because these highways were previously the city’s largest state-of-good-repair liabilities, and so, before this deal, the city was, you know, trying to figure out how to pay for them.

  One option was road pricing (or expressway tolls). And in 2016, this became a real possibility with City Council overwhelmingly endorsing the plan, before it got rejected by the province. It will come as no surprise to regular readers that I was in support of it and writing about it at the time.

  

  In 2016, Toronto estimated that 40% of all trips on these two expressways were by non-residents, and yet they were being funded by Toronto taxpayers. When I said this on Twitter, many of you got upset and argued that people coming in from the suburbs are a boon for the city. No doubt. But the reality is that this was an inequitable funding structure.

  Let’s look at the 2022 Transportation Tomorrow Survey results, which I wrote about here.

  The mode share for all trips to downtown Toronto (from within the city) was 75% non-car, with transit making up the largest share at 40.4%. And the mode share for home-based work trips to downtown Toronto (people who leave home in Toronto to go to work downtown and then come home) was about 80% non-car! In this case, transit made up nearly 50% of the trips.

  The effective result is that the people who tended to drive the least to work were paying for the highways with their tax dollars, and the people driving into downtown were not. This is in no way intended to be an attack on the latter camp. The simple reality is that driving into downtown and buying a chicken souvlaki pita from Jimmy the Greek at lunch isn’t enough to offset the road usage costs.

  The uploading of the highways to the province (which is still advancing but has already relieved Toronto of its financial obligations) is a more equitable solution. It shifts the cost burden to Ontario taxpayers, reflecting that people from all over the region use these highways and that Toronto is part of a broader economic agglomeration.

  But this only solved the jurisdictional problem. We still have worsening congestion and an inefficient funding model. The problem with using broad-based taxation to obfuscate infrastructure costs is that direct usage then goes unpriced, and that leads to what is known as a “tragedy of the commons.”

  We all tend to act in our own short-term self-interest, and the result is that road demand constantly outstrips the available supply. There’s zero marginal cost to actual usage, whether you drive 100 kilometres each day or bike to work. The most effective way to manage traffic congestion is to remove the hidden subsidy for driving and price the costs and negative externalities.

  2026.08.21

• Traffic is agonizing, maybe we should try something new

  The other day I asked my dad how a function he attended went, and he responded by saying, “Traffic, BRUTAL. Traveling by car is an agonizing experience.” He’s not wrong, and I know most of us in Toronto like to complain about it. Traffic is one of the negative externalities of a big city.

  But here’s the thing: we know how to solve this problem. You price congestion, as has been done in New York, London, Singapore, and many other cities, and then direct the revenue it generates to a mode of transport that isn’t as agonizing in a big city: rail travel.

  I’ve written so much on this topic over the years that there’s very little I can add at this point. If you’d like to have a read, here are the search results for “congestion pricing.”

  While the policy has proven successful elsewhere, political inertia and valid concerns over equity keep Toronto stuck. But until we charge for valuable road space, gridlock remains our default. New York City has also shown us that once people see the benefits, they quickly change their minds.

  2026.08.19

• Manhattan’s congestion charge is back, maybe

  I first wrote about Manhattan’s proposed congestion charge back in 2018. Naturally, some people supported it and some people opposed it. Four years later, it was reported that the charge was still being considered for the area of the island south of 60th Street, and that it could generate an additional $1 billion in revenue for the city’s transportation authority. But then in June of this year, right before the charge was set to come into effect on June 30, 2024, New York Governor Kathy Hochul said “nah, let’s pause this indefinitely.” And at that point, it felt mostly dead.

  Nope: A revised tolling plan has just been announced — the charge has been reduced from $15 to $9 — and Hochul is now trying to jam it through before Trump takes office in January. Trump opposes the charge and has branded it the “most regressive tax known to womankind”, so there’s a real deadline here. This could get interesting. Do you think it will actually happen, some 6 years later? (In reality, the timeline is far longer. Congestion pricing also looked promising during the Bloomberg era, but then similarly died. And I’m sure there were even earlier proposals.)

  2024.11.14

• This is what happens when you price roads

  As a general rule, road pricing isn’t popular. But that’s not because it doesn’t work. The problem is that it works too well, and people don’t like the idea of driving less and paying for roads (that currently have a zero marginal cost).

  Here’s a recent study by Robert Bain and Deny Sullivan that looked at just how well it can work. In it, they examine 76 data points from 16 countries, including roads, bridges, tunnels, and cordons (areas).

  The question: What happens to demand once the marginal cost of using a road goes from $0 to some cost greater than zero? (As part of this, they also looked at whether the road or bridge in question has viable alternatives.)

  The results:

  

  The median traffic reduction was 25%. But the interquartile range was -17% to -44%. This is all very significant. Said differently, the traffic impact in nearly a quarter of the examples was -45% or more. So almost a halving of traffic congestion.

  These reductions are obviously a function of the cost of using each road, but regardless, the overarching takeaway remains the same: You may not like or want road pricing, but it totally works.

  2024.10.24

• Toronto’s highway 407 is doing what it is supposed to do

  In Google’s guide to its maps, there is a section on live traffic congestion, and in it, this image is used:

  

  It is a map of the Toronto region, and not surprisingly, it is showing traffic congestion on the 401 highway. But what’s interesting about this image is that there’s no traffic at all on the 407 express toll route. (This is the green highway running generally parallel and north of the 401, for those of you who aren’t familiar with Toronto.)

  This is, of course, accurate. A 2019 study by the Canadian Centre for Economic Analysis called the Economic Impacts of Highway 407 found that, at the time, an average of 413,000 drivers were using the 407 highway each weekday. And of these trips, more than 85% of vehicles were travelling at or above 100 km/h. This translates into a traffic congestion index of almost zero.

  During this same time, the highway 401 through Toronto showed that about 85% of vehicles were travelling below 50 km/h. Meaning, lots of congestion. This also had a significant impact on collision and fatality rates. On the 407, both were about half of what they were on the 401. (I couldn’t find any more decent data, but if you have it, please share it in the comments.)

  The reason for these differences is simple: the 407 charges for congestion. Here are the current per kilometer weekday rates for light vehicles travelling westbound:

  

  Naturally, there are people who think the 407 is too expensive and that it shouldn’t have been privatized. But the reality is that it works; really well in fact. And this is the only method that has been proven to reliably combat congestion. We can go ahead and spend a gazillion dollars building a new tunnel under the 401, and double the number of lanes (it’s already 18 lanes at its widest point), but we already know that it won’t solve our congestion problem.

  Either we price roads and congestion, or we don’t. But if we don’t, then we need to be brutally honest with ourselves about the economic trade off that we are making: free/underpriced roads = traffic congestion, and accurately priced roads and congestion = less traffic. The choice is ours. But know, there’s no such thing as a free lunch.

  2024.09.28

• Rent control and road pricing — economics is the study of choice

  Yesterday’s post tried to pit politics against the realities of how we know cities and economics work. So today, I thought I would share a set of memos from Howard Marks (of Oaktree Capital) titled Economic Reality, Political Reality (which he refers to as an oxymoron), and Shall We Repeal the Laws of Economics?

  In this last one, he specifically talks about things like price gouging (starting with the grocery industry) and apartment rent controls. Each is worth a full read when you have the time, but here I’ll leave you all with a few city building-related thoughts.

  Marks describes economics as the study of choice. And within these choices, there are many complicated moving pieces and second-order consequences. Take, for example, rent control in New York City. What rent control does is stop the free market from being able to freely set rents. The result:

  A person in favor of this arrangement would argue that it maintains affordability and diversity. What it means in purely economic terms is that some people who couldn’t afford to live in New York City if rents were set by free-market forces are able to live there if they’re lucky enough to secure an apartment with regulated rent. But other people who would like to live in New York City and can afford higher rents can’t do so because there are no apartments for them. And lastly, landlords that have apartments that are somehow unregulated can command higher rents than would be the case if additions to the supply of apartments weren’t being discouraged. It’s a matter of personal philosophy whether this is good or bad. But clearly, the laws of economics and the actions of free markets aren’t at work in New York City. Someone in government is making the decisions.

  Much like inclusionary zoning in the case of new housing, the tradeoffs with regulated rents are that you get (1) less overall housing supply and (2) more expensive prices for the people that can pay market rents.

  You could argue, as Marks suggests, that these are acceptable outcomes; but regardless of your opinion, there are real consequences to this policy decision. There’s no such thing as a “free lunch” in economics, and consequently there’s no such thing as no-cost affordable housing. The question is: Who pays?

  Going back to the topic of traffic congestion from yesterday’s post, Toronto’s general reluctance to implement any form of road or congestion pricing is also an economic choice. We have priced our roads so cheaply that demand is always going to outstrip supply. And this is expected. What we are experiencing today is a natural market outcome.

  Targeting bike lanes as part of the problem is meant to counter this by increasing road supply. Less bike lanes means more space for cars, right? But the second-order consequence of this choice is that you push people off their bikes (which take up less road space) and into cars (which take up more road space). So demand is also likely to increase.

  The stark reality of solving traffic congestion is that it will require greater change. It will mean fewer people driving, more people taking transit and biking, and the people who do continue to drive will have to pay more for it.

  Of course, this is not what any politician wants to talk about. As Marks says: “In the world of politics, there can be limitless benefits and something for everyone. But in economics, there are only tradeoffs.” The tradeoff we have decided to make is cheap roads in exchange for crippling traffic congestion.

  2024.09.22