Expand High-Occupancy Toll Lanes Throughout the Bay Area

Editor's note: Read the Metropolitan Transportation Commission's response to SPUR's HOT lanes analysis.

Annual savings potential:

Assumptions

• The net revenue impact of the HOT lane program will be to generate $70 million region wide.
• Predicted emissions are a function of the elasticity of demand for new lane-miles. The range of elasticities is higher in the long run because new lane miles lower the cost of long commutes, and thereby increase demand for housing in places farther from the region's urban core.
• New HOT lanes proposed in MTC's plan will increase VMT in the long run, and thus the expansion program has a net increase in emissions.

Analysis

The region currently has 400 miles of High Occupancy Vehicle (HOV) lanes, which permit only vehicles with at least two occupants during peak hours. Another 100 miles are planned. Converting these lanes to High Occupancy Toll (HOT) lanes, which permit single-occupancy vehicle use for a fee, would allow the region to sell spare capacity while maintaining free-flowing traffic in these lanes.

MTC's HOT lane plan, part of the 2035 Regional Transportation Plan (RTP), is really two separate projects. The first project converts existing and planned HOV lanes to HOT lanes. This change will raise revenue, and may reduce idling, congestion, and emissions in the short run.

The second project involves using revenue from the first project to pay for 300 miles of new HOT lanes, 60% of which will close gaps in the regional express lane network. This project will increase the region's freeway miles by about 5%. The net long-term impact of both projects is to increase the number of car trips taken in the region, and thus to increase the region's CO2 emissions.

SPUR believes that using prices to manage demand for existing roadways is an important long-term solution to increase the efficiency of our transportation system.¹ Simply put, the future of our road system will involve better pricing to manage demand rather than new highway construction to facilitate more driving. We see this proposal for a complete regional HOT network as an important step toward the broader goal of pricing road space. Unfortunately, the politics around roadway pricing has dictated that this proposal create HOT lanes by building new lane miles rather than converting existing lanes. Therefore, our analysis shows that this proposal will increase CO2 emissions in the long run quite significantly. We acknowledge the important benefits and also the important downsides of this strategy. The downsides would be mitigated by a commitment to invest the revenue from HOT lanes in demand management, transit, bike, and pedestrian infrastructure in the region's urban core. Along with a coordinated regional land use planning effort, such a policy could facilitate more compact growth and economic prosperity, while reducing congestion and CO2 emissions.

What we do now
The Bay Area's existing freeway network now provides 400 miles of High Occupancy Vehicle (HOV) lanes. Another 100 miles are either currently under construction or funded. These facilities provide buses and carpooling motorists relief from congestion, encouraging commuters to use these modes of travel. There are gaps in the HOV network, but limited available funding has halted development of new HOV lanes for now.

What we could do
In July 2008, MTC committed to pursuing a regional network of High Occupancy Toll (HOT) lanes. The regional network concept involves converting existing HOV lanes to HOT and using the revenue generated to finance completion of the HOV/HOT system as well as other improvements within the HOT corridors. HOT lanes could provide for reduced congestion and emissions, and provide faster and more predictable travel times for carpools and buses. Funds from HOT lanes could allow the region to complete its HOV network without having to rely on outside funds.

Cost
An MTC study of the project, completed in December 2008, estimated that the HOT lanes would produce between $8 billion and $11.4 billion in revenue between 2015 and 2035. Operations and maintenance would cost $1.6 billion, and debt service would consume $6.7 billion. Assuming the mid-point of the revenue range, the total revenue generated over this 20-year period would amount to $1.4 billion, or $70 million per year.

Note that these costs include the investments required to complete the HOV network: the net revenue described above is in excess of system completion costs.

Carbon savings potential
Adding new freeway capacity in the form of HOT lanes will result in the following impacts on motorist behavior: New single occupant cars will switch route to the freeway to pay into HOT lanes (change route of trip). Single occupant cars will pay into HOT lanes (and vacate general purpose lanes). Single occupant cars will begin to carpool and move into HOT lanes. Drivers of former single occupant cars will switch to transit as a result of transit improvements in HOT lanes (change of route and mode). Former single occupant drivers on freeway switch to transit (change of mode). Modeling undertaken for RTP 2035 accounts for these changes in travel behavior, as well as an increase in efficiency due to reduced congestion, yielding a decrease in emissions per mile of travel and a decrease in regional emissions.

However, when additional capacity reduces congestion and thereby reduces the cost of driving, drivers will make more trips and longer trips. In the short run, this induced travel will include new trips that would not have otherwise been made. In the long run, adding new capacity to the Bay Area's freeway system will lower the cost of long commutes, increasing demand for housing in communities farther from the urban core. Newly available freeway capacity will indeed make possible more development on the periphery of the Bay Area, yielding longer trips. MTC's RTP 2035 model does not account for this type of induced trip.

Economic growth and land use regulation is surely important in determining travel demand patterns. However, particularly on the periphery of the Bay Area and neighboring regions like the Central Valley, land use regulation is permissive. Congested commute corridors into the core of the Bay Area may indeed be the most important constraint on residential development. Several academic studies show that while there is debate about the magnitude of new travel induced by roadway investments, that relationship is always positive: new roadway investments result in higher VMT.² In the short run, studies show a range of elasticities of induced trips on new roadways of 0.2 to 0.6, with long run elasticities from 0.6 to 1.

If we assume a 4.59% increase in freeway miles, and short-run elasticities of VMT with respect to lane-miles on the order of 0.2 to 0.6, then the freeway expansion will produce between 842,456 and 2,527,367 additional VMT per day, or between 308 and 1,541 additional tons of CO2 per day. With 255 weekdays per year, the additional annual metric tons of CO2 expected from induced demand would be between 78,000 and 236,000 per year. If the long run elasticity of demand is between .6 and 1, then the added increase in emissions in the long run is between 235,000 and 393,000 metric tons.

MTC's study estimates that the introduction of HOT lanes would reduce CO2 emissions during the Bay Area's 2035 morning peak period by 7%, from 4,650 metric tons to 4,320. This is because fewer emissions are produced from the tailpipes of moving rather than idling vehicles. With 255 week days per year, and doubling this savings to account for evening peak travel, this amounts to a savings of 168,000 metric tons per year.

Given these estimated savings from reduced congestion, we would expect that in the short-run, the estimated change in CO2 from the HOV/HOT could fall anywhere between -90,000 (a net reduction in CO2), to 68,000 metric tons (a net increase in emissions). In the long run, the net increase in CO2 emissions from the project would fall between 68,000 and 225,000 metric tons.

Endnotes
¹ Our analysis on variable rate road pricing found that this could potentially reduce 38,000 tons of CO2 annually in San Francisco and raise revenue for transit improvements. For our analysis on the beneficial CO2 effects of pricing, see http://www.spur.org/publications/library/report/critical_cooling/option25
² For example: Hansen, Mark, "Do New Highways Generate Traffic?" Access, No. 7, Fall 1995, pp. 16-22. Fulton, Lewis et al. "A Statistical Analysis of Induced Travel Effects in the U.S. Mid-Atlantic Region, Journal of Transportation Statistics, April 2000.
Lee, Douglas B. et al "Induced Traffic and Induced Demand." Transportation Research Record, 1659, 1999. DeCorla-Souza, Patrick. "The Long-Term Value of Value Pricing in Metropolitan Areas Transportation Quarterly," Vol. 56, No. 3, Summer 2002 (19–31).
Noland, Robert B. and Lewison L. Lem (2002), "A Review of the Evidence for Induced Travel and Changes in Transportation and Environmental Policy in the US and the UK," Transportation Research D, Vol. 7, No. 1 (www.elsevier.com/locate/trd), Jan. 2002, pp. 1-26.
Hansen, Mark and Yuanlin Huang (1997), "Road Supply and Traffic in California Urban Areas," Transportation Research A, Vol. 31, No. 3, pp. 205-218.
Cervero, Robert. "Road Expansion, Urban Growth, and Induced Travel: A Path Analysis." Journal of the American Planning Association, Volume 69, No. 2 June 2003, 145 - 163.