New York City streets could look less crowded by this time next month (Pixabay - thelegendreturn)
Years in the making, congestion pricing looks likely to finally arrive on June 30, 2024. Despite opposition from some local lawmakers, including a group of elected officials from Staten Island and several jurisdictions in New Jersey, congestion pricing seems almost certain to go into effect, permanently transforming how New Yorkers navigate the city and potentially impacting where New Yorkers choose to live and the values of properties both in and outside the Congestion Relief Zone (defined here as local streets and avenues at or below 60th Street).
In this article:
New York City’s congestion pricing plan
Once in effect, all passenger, small commercial vehicles, and motorcycles will face a toll. If using an E-ZPass, the charge will be $15 during peak hours and $3.75 overnight period. Motorcycles will pay $7.50 during the peak period and $1.75 overnight. In addition, vehicles will be charged only once per day. Charges for trucks and buses will range from $24 to $36 during peak hours and $6 or $9 overnight, with some trucks and buses being subject to exemptions as well as emergency vehicles.If you're thinking of leaving your car at home and taking a taxi or Uber instead, also be prepared to pay more, but not as much as you would in your vehicle. App-based rides will go up $2.50 at all times a day, while taxis, green cabs, and black cars will increase $1.25 per trip.
In response to initial resistance from some drivers living near but outside Manhattan and from New Yorkers living on lower incomes, three important exemptions have been introduced to help ease the impact of congestion pricing.
- Vehicles entering via toll tunnels: Lawmakers have agreed upon reduced fees for anyone coming into Manhattan's congestion zone via the Lincoln Tunnel, Holland Tunnel, Queens-Midtown Tunnel, and Hugh L. Carey Tunnel. For passenger vehicles, the charge will be $5, motorcycles will pay $2.50, and trucks will pay $12 to $20 extra depending on their size.
- Drivers from households with an AGI under $50,000: During the peak pricing period, anyone with a federal household adjusted gross income (AGI) of no more than $50,000 and anyone who receives Supplemental Nutrition Assistance Program (SNAP), Special Nutrition Assistance Program for Women, Infants, and Children (WIC), or Temporary Aid to Needy Families Program (TANF) benefits will receive a 50% discount on tolls, but there is one caveat. The discount won't kick in until the 11th peak period trip in the Congestion Relief Zone.
- Residents in the Congestion Relief Zone with a household AGI under $60,000: Finally, residents who live in the zone who have a household AGI under $60,000 may qualify for a tax credit for any tolls paid throughout the year.
Map of the Congestion Relief Zone (RPA)
Why congestion pricing is being introduced
Congestion pricing is being introduced to help New York City tackle two growing problems. First and foremost, there are high hopes that the introduction of congestion pricing will help tackle traffic congestion in Manhattan, particularly south of 60th Street. Second, a projected $15 billion windfall has been earmarked for such improvements to the MTA as equipment repairs and upgrades (e.g., new subway cars and electric buses), accessible subway stations, modernized technology, and the expansion of the Second Avenue subway into East Harlem."New York should have the world’s best urban transportation system, and congestion pricing is critical to achieving this goal" – Regional Plan Association
Predicted impacts of congestion pricing in the NYC real estate market
While only time will tell how New York City’s congestion pricing scheme impacts real estate, the introduction of congestion pricing is likely to affect property values and quality of life both in and outside the congestion pricing zone over the coming years in four possible ways.- Property values may rise in the Congestion Relief Zone: When London introduced the London Congestion Charge in its Western Extension Zone, home values in the area increased by 3.68% relative to homes located just outside the zone. Analysts suggest the surge in values reflects consumers' willingness to pay more to live inside the zone where there is less traffic and noise and better air quality. In New York City, it seems likely that home values will also rise within the city's Congestion Relief Zone.
- Quality of life may increase inside the Congestion Relief Zone but decrease outside the zone: In London, air pollution has decreased city-wide since the introduction of congestion pricing. However, air quality has also improved more rapidly inside the zone than outside the zone. In New York City, a similar situation may play out, with air quality and other quality of life factors (e.g., noise levels) improving faster inside the zone than outside the zone and opponents arguing that it could bring more pollution to already disadvantaged areas. If this happens, it could further intensify disparities in the quality of life that already exist between neighborhoods in Lower and Upper Manhattan.
- Remote work may persist: Despite the efforts to get workers back into the office, congestion pricing could make remote work even more attractive among those who can participate. This could, in turn, leave more Manhattan offices empty or nearly empty. If this happens, however, it may put increased pressure on city officials to rezone commercial districts for residential use.
- The MTA could improve, increasing housing prices in more distant neighborhoods over time: In a best-case scenario, congestion pricing will not only lead to a reduction in traffic congestion and air and noise pollution below 60th Street in Manhattan but also generate billions of dollars for the MTA. If this happens, it could finally enable the MTA to upgrade its bus and subway systems as well as its service – the MTA is already set to roll out service increases on express bus routes going into the congestion zone. This in turn could impact housing values in neighborhoods that are currently further away from the city center, including uptown neighborhoods such as Washington Heights in Inwood.
In the short term, parts of Manhattan on the cusp of the Congestion Relief Zone might see more, well, congestion as drivers search for parking and workarounds to avoid the fees. Residents of these areas are understandably concerned about the possibility of increased traffic and pollution. However, this will likely shake itself out as time passes and buildings just inside the Congestion Relief Zone (i.e., no more than four blocks away) could experience an increase in property values as predicted for their counterparts further inside.
126 East 57th Street (ODA Architecture)
Located on the eastern end of Billionaires' Row, 126 East 57th Street is distinguished by its "cubic" design that allows for a pixelated appearance at street level and unique floor plans inside. Several units will have private outdoor space by virtue of the numerous setbacks, and all residents will have access to amenities like a landscaped courtyard, fitness center, indoor sports court, indoor pool, sauna and steam room, party lounge with prep kitchen, and roof terrace. A sales launch is estimated for later this year.
This project is taking shape on a through-block site on southbound Lexington Avenue and the two-way 57th Street. A decrease in vehicular traffic would significantly affect area congestion, as would be the case with the following completed buildings.
This project is taking shape on a through-block site on southbound Lexington Avenue and the two-way 57th Street. A decrease in vehicular traffic would significantly affect area congestion, as would be the case with the following completed buildings.
Sutton Tower (Astra Studios)
Sutton Tower, #32A (Corcoran Sunshine Marketing Group)
252 East 57th Street (via SOM)
252 East 57th Street, #59A (Corcoran Group)
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One Beacon Court
One Beacon Court, #PH54W (Serhant LLC)
200 East 59th Street (Douglas Elliman)
200 East 59th Street, #15A (Douglas Elliman Real Estate)
The Sherry Netherland (Sotheby's International Homes)
The Sherry Netherland, #701
$4,800,000
Park/Fifth Ave. to 79th St. | Cooperative | 2 Bedrooms, 3 Baths
The Sherry Netherland, #701 (Sothebys International Realty)
611 West 56th Street (Corcoran Group)
611 West 56th Street, #27A (Corcoran Group)
The Parc Vendome (Official)
The Parc Vendome, #11D (Compass)
Element (Keller Williams NYC)
Element, #33A (Christies International Real Estate Group LLC)
One West End (Compass)
One West End, #10A
$5,195,000 (-3.7%)
Riverside Dr./West End Ave. | Condominium | 3 Bedrooms, 3.5 Baths | 2,748 ft2
One West End, #10A (Compass)
Would you like to tour any of these properties?
Just complete the info below.
Or call us at (212) 755-5544
Would you like to tour any of these properties?
Contributing Writer
Cait Etherington
Cait Etherington has over twenty years of experience working as a journalist and communications consultant. Her articles and reviews have been published in newspapers and magazines across the United States and internationally. An experienced financial writer, Cait is committed to exposing the human side of stories about contemporary business, banking and workplace relations. She also enjoys writing about trends, lifestyles and real estate in New York City where she lives with her family in a cozy apartment on the twentieth floor of a Manhattan high rise.
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