property taxes, user fees, development levies) are generally not neutral with respect to development patterns – in some cases, they work together with planning tools to achieve sustainable development objectives – in other cases, they do the opposite 7 “Getting the Prices Right” • Incorrect pricing of urban services has been at the root of a number of urban problems... [...] including sprawl • Marginal cost pricing -- higher fees are charged to those far away from existing services; if use average cost, subsidizing sprawl • Pricing services correctly results in efficient use of services as well as more efficient land use 8 Pricing Services Correctly • Examples: – User fees • Road pricing • Parking levies – Property taxes – Development levies 9 User Fees • Signals what. [...] roads and parking) 13 Road Pricing • Highway users do not look at external costs (congestion and pollution); therefore over-use highways relative to what is economically efficient • Under-pricing of auto congestion externality results in excessive dispersion – inefficiently low residential densities and sprawl 14 Road Pricing • Road toll – incentive to make efficient decisions with respect to moda. [...] bus transit in London • Technology makes it easier • Maybe toll new roads or HOT lanes 15 Parking Levies • Free parking provides wrong incentives – to use cars and park for the day in central city • Cruising for spaces wastes time, fuel, creates traffic congestion, accidents, pollution – One study shows cars cruising for free parking contribute over 8% to total traffic • Parking fees can vary with. [...] highways, sewer lines, etc.) • Growth pays for itself 19 Development Levies • Developers will develop at the efficient time and place if they face the full social cost of their development • If levy differentiated by location, density, type of development – then efficient development • A uniform charge will subsidize inefficient land uses 20 Final Comments • Need to create the right incentives for.
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