New York City has been cleared to implement congestion pricing, a practice that allows the city to charge drivers entering Lower Manhattan, New York Gov. Kathy Hochul announced Monday.
The decision paves the way for the city to begin the program as soon as next spring.
CNN has reached out to the Federal Highway Administration for comment.
The toll is formally known as the Central Business District Tolling Program — but it's commonly called "congestion pricing."
In practice, it works like any other toll, but because it specifically charges people to drive in the traffic-choked area below 60th street in Manhattan, it would be the first program of its kind in the United States.
Proposals range from charging vehicles $9 to $23 during peak hours.
The plan had been delayed for years, but it cleared a milestone last month when the Federal Highway Administration signed off on the release of an environmental assessment.
The New York Metropolitan Transportation Authority (MTA) can now begin the process of finalizing toll rates, as well as discounts and exemptions for certain drivers.
New York City is still clawing out of from the devastating impact of the Covid-19 pandemic. Congestion pricing advocates say it's a crucial piece of the city's recovery and a way to re-imagine the city for the future.
"This program is critical to New York City's long-term success," New York Gov. Kathy Hochul said last month.
The plan would also mark the culmination of more than a half-century of efforts to implement congestion pricing in New York City. Despite support from several New York City mayors and state governors, car and truck owners in outer boroughs and the suburbs helped defeat proposals.
In 2007, Mayor Michael Bloomberg called congestion "the elephant in the room" when proposing a toll program, which state lawmakers killed. A decade later, Gov. Andrew Cuomo — who had long resisted congestion pricing — said it was "an idea whose time has come" and declared a subway state of emergency after increased delays and a derailment that injured dozens. Two years later, the state gave the MTA approval to design a congestion pricing program.
Ultimately, it was the need to improve New York City's public transit that became the rallying cry for congestion pricing.
Worst gridlock in the United States
Each day, 700,000 cars, taxis and trucks pour into Lower Manhattan, one of the busiest areas in the world with some of the worst gridlock in the United States.
Cars travel at just 7.1 mph on average in the congestion price zone, and it's a downward trend. Public bus speeds have also declined 28% since 2010. New Yorkers lose 117 hours on average each year sitting in traffic, costing them nearly $2,000 in lost productivity and other costs, according to one estimate.
The toll is designed to reduce the number of vehicles entering the congestion zone by at least 10% every day and slash the number of miles cars travel within the zone by 5%.
Congestion comes with physical and societal costs, too: more accidents, carbon emissions and pollution happen as honking cars take up space that could be optimized for pedestrians and outdoor dining.
Proponents also note it will improve public transit, an essential part of New York life. About 75% of trips downtown are via public transit.
But public-transit ridership is 25% to 30% lower compared to pre-pandemic levels, according to the MTA. The MTA says congestion fees will generate a critical source of revenue to fund $15 billion in future investments to modernize the city's 100-year-old public transit system.
The improvements, like new subway cars and electric signals, are crucial to draw new riders and improve speed and accessibility — especially for low-income and minority residents, who are least likely to own cars, say plan advocates.
New York City is "dependent on public transit," said Kate Slevin, the executive vice president of the Regional Plan Association, an urban planning and policy group. "We're relying on that revenue to pay for needed upgrades and investments that ensure reliable, good transit service."
Improving public transportation is also key to New York City's post-pandemic economic recovery: If commutes to work are too unreliable, people are less likely to visit the office and shop at stores around their workplaces. Congestion charge advocates hope the program will create more space for amenities like wider sidewalks, bike lanes, plazas, benches, trees and public bathrooms.
"100 years ago we decided the automobile was the way to go, so we narrowed sidewalks and built highways," said Sam Schwartz, former New York City traffic commissioner and founder of an eponymous consulting firm. "But the future of New York City is that the pedestrian should be king and queen. Everything should be subservient to the pedestrian."
Hochul touts decision, New Jersey officials "outraged"
"Congestion pricing will reduce traffic in our crowded downtown, improve air quality and provide critical resources to the MTA," New York Gov. Hochul announced. "With the green light from the federal government, we look forward to moving ahead with the implementation of this program."
But several Democratic New Jersey officials, including US Sen. Bob Menendez, US Reps. Josh Gottheimer and Bill Pascrell, Jr, expressed their outrage over the decision.
"All New Jersey drivers entering Manhattan using the Holland and Lincoln Tunnels and George Washington Bridge must be exempt from New York's Congestion Tax," the officials said in a joint statement. "We will not stop fighting until we defeat this plan and ensure New York is not allowed to balance its budget on the backs of hard-working New Jersey families. That's a Jersey promise."
Benefits, critiques and mitigation measures
While no other US city has yet implemented congestion pricing, Stockholm, London and Singapore have had it for years.
These cities have reported benefits like decreased carbon dioxide pollution, higher average speeds, and congestion reduction.
Just one year after London added its charge in 2003, traffic congestion dropped by 30% and average speeds increased by the same percentage. In Stockholm, one study found the rate of children's acute asthma visits to the doctor fell by about 50% compared to rates before the program launched in 2007.
Some groups are fiercely opposed to congestion charges in New York City, however. Taxi and ride-share drivers, largely a low-income and immigrant workforce, fear it will hurt drivers already struggling to make ends meet. The MTA said congestion pricing could reduce demand for taxis by up to 17% in the zone.
Commuters and legislators from New York City's outer boroughs and New Jersey say the program hurts drivers who have no viable way to reach downtown Manhattan other than by car, and that this would disproportionately impact low-income drivers. (But out of a region of 28 million people, just an estimated 16,100 low-income people commute to work via car in Lower Manhattan, according to the MTA.)
Other critics say it could divert more traffic and pollution from diesel trucks in Manhattan into lower-income areas like the Bronx, which has the highest rates of asthma hospitalization in the city.
The MTA and other agencies have plans to mitigate many of these adverse effects, however.
Taxis and for-hire vehicles will be tolled only once a day. Drivers who make less than $50,000 a year or are enrolled in certain government aid programs will get 25% discounts after their first 10 trips every month. Trucks and other vehicles will get 50% discounts during overnight hours.
Additionally, the MTA pledged $10 million to install air filtration units in schools near highways, $20 million for a program to fight asthma, and other investments to improve air quality and the environment in areas where more traffic could be diverted.
The stakes of New York City's program are high, and leaders in other cities are watching the results closely.
If successful, congestion pricing could be a model for other US cities, which are trying to recover from the pandemic and face similar challenges of climate change and aging public infrastructure.
"It's good to see New York City's program is moving forward," said the Los Angeles Times Editorial Board last month. "Los Angeles should watch, learn and go next."
- CNN's Gregory Wallace and Rob Frehse contributed to this alert