Scott Harris, 1/1/2025

Ah this congestion pricing thing.

Because my children’s school is positioned between 60th and 61st Streets on West End Avenue, I’ve had a front-row seat to the city’s preparation for it. What do I mean? The camera and associated infrastructure was installed directly outside the school’s front doors (see an example via the photo above).

Ugly, big, and annoying, starting on January 5th we now can either drop our kids off one block from school, or enter the congestion zone for the half block and pay and extra $1 per uber or cab ride. Not great, to be sure.

What is Congestion Pricing?

If you’ve been living under a rock, perhaps you haven’t heard of this? People will get charged a fee every time they enter midtown from above 61st Street, and covers everything in the city below (except the FDR and the West Side Highway). You can get all the details here, too.

Then Kathy Hochul became like your crazy ex-girlfriend or ex-boyfriend.

• We’re on! It’s going into effect on October 1st. It’ll be $16, thanks!
• We’re off! It’s time to reflect on it (and perhaps delay until after the November election…)
• No, I really love you and we’re on again! And so I’ll save you a little money (maybe we always intended to lower the price and this makes us look better to do it this way?).

I’m not sure that the metaphor works that well, since “I love you” usually doesn’t look like a $9 tax every time you want to see the person. But at least it’s $7 cheaper than it was the first go-round. Even better, it’s half price if you’re out on a motorcycle, and 75% off ($2.25) between 9pm and 5am on the weekdays, and 9pm to 9am on the weekends. Not sure how this makes sense, since lots of people come into town on Friday and Saturday nights? But okay, I guess date night (to keep the dysfunctional dating metaphor going) will be a bargain.

What’s the Big Idea?

The big idea of congestion pricing is to raise money to pay for all sorts of city preparations for another Hurricane Sandy, or whatever reasons New York State wants to throw our way. If it raises a billion dollars a year, okay. I’ll believe it when I see it.

The question that I have gotten is whether it will impact the prices of real estate.

A reporter asked me a few weeks ago. I thought it would perhaps expedite real estate decision-making if someone were living below the congestion zone and needed to go through it every day to, say, drop kids at school.

Possible Outcomes

Here are a few of the other outcomes people have thrown out there. I’ll share my thoughts:

1. A Temporary Real Estate Slowdown? If the election wasn’t more than a bump in the road, I can’t see enough people caring about this to halt their search, especially given the time of the year. We’re likely going to be off to the real estate races, transactionally speaking
2. An increase in prices inside the zone? Really? If the streets get cleaner and traffic dies down, we won’t really feel that for a while. The city has done nothing other than pick up steam since COVID in terms of the streetlife going back to normal. The bustle is why people want to be here. Not the quiet. I don’t think prices go up because of the congestion pricing.
3. What’s it going to do to commuter hubs outside the city? Heck, I wouldn’t know where to start. If people got used to commuting in during COVID in their cars, this tax probably puts the final nail in the coffin. But if people must drive in for any number of reasons, they already pay $15 a day for the bridges and the tunnels. Maybe people get in earlier or leave later. Perhaps it boosts restaurants’ later dinner business inside the zone? I’m stumped, people.

A Nothing Burger? Or a S*#* Sandwich?

As I fast-forward from my interview to today, I’m not so sure anything will happen worth discussing too much further. It’s one of these “welcome to New York” moments. No one said it was inexpensive to live or work here. Even if you needed to through every day, it’s $3285/year ($9 x 365 days) to deal with this. Is that going to change people’s driving behavior? Color me skeptical. I hear no one talking about it, complaining about it, or even waxing philosophical about it.

I believe that the biggest loser could be Ubers and Taxis, who are going to be even more ridiculously expensive than they already are.

For those worried about their real estate, there are plenty of other costs putting pressure on prices. Congestion pricing isn’t the one to worry about! – Scott & The HRT