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Jonathan Price – CRE & Flex Expert
- Early reports showed improved traffic and faster commute times, but the Trump administration has suspended the city’s congestion pricing program.
- Critics of the charge worry the policy could disproportionately affect low-income workers, small businesses, and neighboring areas.
- If it’s reinstated, long-term success depends on sustainable urban planning, transit improvements, and fair distribution of costs.
New York City’s congestion pricing program, launched on January 5, was meant to be a landmark initiative — the first of its kind in the U.S. — aimed at reducing gridlock, cutting emissions, and funding much-needed city transit improvements.
Modelled after similar programs in London, Singapore, and Stockholm, the policy charged drivers up to $9 to enter Manhattan’s busiest areas. However, the Trump administration has already moved to suspend it.
Governor Kathy Hochul has defended the plan and insists that congestion pricing should be New York’s decision. She is preparing for a legal fight, while Trump has declared the policy “dead.”
Supporters view congestion pricing as a bold step toward a greener, more efficient city, while critics argue it unfairly burdens workers and businesses.
Millions of commuters, small business owners, and companies navigating return-to-office (RTO) mandates are watching closely.
With the cost of commuting already high, does this policy incentivize sustainable urban development, or does it place undue strain on everyday workers?
Should the policy move forward, one key question remains: Will the long-term economic and environmental benefits outweigh the immediate backlash from employees and businesses trying to navigate the future of work?
Congestion Charging: A Climate Solution or Costly Commuter Burden?
As employers demand workers return to the office, traffic congestion has surged in many U.S. cities, including New York.
In Manhattan, over 700,000 vehicles enter daily, reducing traffic speeds to just 7 miles per hour. The congestion policy, which includes fees as high as $9 for cars and $22 for trucks, was introduced to tackle this growing issue of traffic pollution.
It has, however, sparked considerable debate — with critics arguing that it could have unintended consequences for workers, businesses, and the surrounding areas.
One of the biggest concerns surrounding the congestion charge is its potential impact on neighboring New Jersey. State officials fear the tolls will drive businesses and commuters across the Hudson River and, consequently, undermine New Jersey’s economy. Critics also argue that the policy unfairly impacts New Jersey residents without offering tangible benefits to their transit infrastructure.
Furthermore, where there is limited public transportation, driving is often the most practical option for many workers (especially those in low-income or outer borough areas). Critics warn that the pricing system may disproportionately burden lower-income individuals who rely on personal vehicles, whilst wealthier commuters can afford the fees or opt for premium transit options.
Lower-income workers could face the brunt of the congestion charge, raising concerns about fairness.
Yet, some experts believe that the congestion charge could be a catalyst for positive change.
Jeff Stade, Co-Founder and CEO of Jawnt, proposed to Allwork.Space that employers could play a pivotal role in easing the commuting burden.
He advocates for companies to offer transit subsidies or invest in regional coworking spaces, which could help reduce the number of commuters driving into Manhattan. Stade emphasized that covering public transit costs may be more cost-effective for employers than maintaining empty office spaces in New York.
By alleviating the financial burden on workers, they could make return-to-office policies more attractive. Stade also stressed that faster and more efficient commutes could enhance employee wellbeing and company productivity.
Amanda Kross, Americas Regional Lead at JLL, also shared her thoughts with Allwork.Space.
Kross encourages employers to assess and improve their commute benefit programs to better support employees who depend on driving.
By doing so, companies can help lessen the financial burden of congestion charges. Kross also believes improving public transit should be a priority, particularly making services more reliable, faster, and safer.
Her insights are supported by research from JLL’s Global Consumer Experience Survey, which shows that commuters are more likely to use public transportation if these factors are improved.
Interestingly, Kross believes that Manhattan’s congestion pricing will not have a significant impact on office attendance.
With more than 90% of commuters in the Congestion Relief Zone (CRZ) already using public transit or walking, Kross notes that fewer than 10% of commuters drive themselves to work. NYC’s return-to-office rate of 64% in November 2024 is higher than the national average of 55%, suggesting that the city’s office attendance is already robust.
Beyond the congestion charge, there is a broader conversation about urban planning. New York City, in particular, could reduce its traffic problems without relying solely on congestion pricing. Many experts argue that addressing the root causes of congestion — including long commutes and heavy car reliance — could offer a more sustainable solution.
According to the OECD, sustainable urban planning, which includes increasing affordable housing and improving transit access, is a key strategy for reducing traffic congestion.
The National Housing Conference highlights that areas with affordable housing near public transit hubs tend to see lower car dependency. The Urban Land Institute and the Brookings Institution further highlight that promoting high-density, mixed-use developments near transit stations reduces traffic congestion and improves overall sustainability.
These approaches promote long-term environmental and social benefits. However, ensuring these policies benefit all residents equitably is essential for their success.
Environmental Gains vs. Unintended Consequences
Congestion pricing is viewed by many as a key strategy to advance sustainability goals (reducing emissions and improving air quality) by investing in and promoting public transit over personal vehicle use.
Kross said that the early signs are promising. The Metropolitan Transportation Authority (MTA) reported a drop of over one million vehicles entering New York’s CRZ within weeks of the program’s launch, and subway usage has also increased.
JLL’s Global Consumer Experience Survey also found that 61% of commuters are motivated to choose sustainable transportation over personal vehicle use.
However, experts also warn of potential unintended environmental consequences. As more commuters opt for public transit, there are concerns that the policy could increase the number of people working remotely, contributing to suburban sprawl and higher residential energy consumption.
The United Federation of Teachers argued that the environmental review for the program was insufficient, suggesting that the plan might actually push pollution to surrounding areas.
Despite these concerns, New York’s congestion pricing is a key part of the state’s broader efforts to meet environmental goals. Early reports show faster commute times and less traffic in the first four weeks of the charge.
With transportation contributing to 28% of U.S. emissions, reducing car dependence in urban areas is a step in the right direction. Ultimately, the success of congestion pricing depends on smart urban planning that addresses housing, energy use, and broader commuter patterns.
Lessons from London: What New York Must Prepare For
New York’s congestion-pricing program mirrors London’s long-standing initiative, which launched in 2003.
London’s experience offers key lessons in both successes and unintended consequences.
Initially, the congestion charge reduced traffic by up to 30% and generated billions for public transport. However, over time, traffic increased again as road space was repurposed for pedestrian and cycle lanes, squeezing vehicles into fewer lanes and causing slower movement. New York must plan for similar unintended outcomes and focus on longer-term benefits.
A key takeaway from London’s program, as Kross explained to Allwork.Space, is the importance of transparency in funding allocation.
The congestion charge in London has raised over £1.2 billion, much of which has been reinvested in public transportation. £960 million of that amount funded bus network improvements, boosting reliability and frequency. Kross emphasizes that reinvesting capital into transportation was central to gaining public support, as it ensured the program was seen as more than just a tax. New York should follow suit to avoid skepticism over expenditure.
London’s challenges highlight the complexity of congestion pricing. Despite the program’s initial successes, congestion has re-emerged as more space has been allocated to buses, bike lanes, and pedestrian areas.
The remaining vehicle lanes became more congested, slowing travel and frustrating drivers, including taxi passengers, who now pay higher fares due to longer routes. For New York, this raises concerns for commuters, rideshare users, and businesses relying on efficient deliveries.
Critics argue that London’s congestion charge, now £15 ($18) per day, has also negatively affected the hospitality sector by discouraging customers from driving into the city.
London’s experience also shows that while congestion pricing alters travel behavior, it does not entirely eliminate congestion. Some commuters find alternatives, but others either absorb the additional cost or re-route through different neighborhoods.
New York should keep in mind potential spillover effects, where traffic increases outside the toll zone. By learning from London’s successes and missteps, New York could make congestion pricing more effective in the long term — if it’s allowed to reinstate the program, that is.
Will Congestion Pricing Reshape NYC’s Workforce Future?
With the rising cost of living, many city workers burdened by expensive, time-consuming commutes are reevaluating where and how they work. New York City’s congestion pricing plan could thus serve as a turning point in the debate over returning to the office.
Estimates suggest annual commuting costs range from $5,000 to $8,500 per worker. If congestion pricing increases these costs, more workers may seek remote or hybrid arrangements to avoid the added expense.
Will this policy be the tipping point for employees rethinking their commutes, or will it push employers to offer subsidies and adopt more flexible work models?
Free public transport, decentralizing work hubs to reduce commuting, or implementing dynamic pricing (in response to traffic demand) are a few solutions.
Some companies are also considering coworking spaces or suburban satellite offices as a middle ground between fully remote and costly daily commutes. Additionally, there is a push for equity-based exemptions, such as discounts or exemptions for essential workers and low-income commuters, to ensure fairness.
According to Jeff Stade, the transition to flexible work is already altering commuting patterns, which could encourage more U.S. cities to invest in sustainable transit. He told Allwork.Space, “Congestion pricing in New York is just one policy example where we see transit getting the required funding.”
Similarly, Kross argues that instead of pushing workers toward remote jobs, the congestion program could highlight the need to strengthen New York’s public transit system.
Kross explained that the city’s economy relies on daily commuters from across the Tri-State area, and maintaining that flow requires continuous investment in rail, bus networks, and safety improvements.
She highlighted that effective implementation of congestion pricing could improve urban commuting instead of discouraging it, and by enhancing public transit options, the city has an opportunity to make commuting more efficient and attractive for workers in all five boroughs and beyond.
From an urban planning standpoint, Kross contends that this policy could spur transit-oriented development.
Already, proximity to major transit hubs such as Grand Central has increased office demand in nearby areas, and Kross, therefore, suggests that developers and city planners capitalize on this momentum by prioritizing projects that boost accessibility and sustainability, thereby reinforcing New York’s status as a transit-centric city.
A Final Thought
The future of urban transportation requires a blend of innovative policies, enhanced transit systems, and sustainable urban planning. If the New York congestion pricing is reinstated, it could redefine how and where New York City-area employees work. Whether the city emerges as a model for sustainable urban work or a cautionary tale of unintended consequences depends on how businesses, employees, and city leaders adapt.
