Increase Transit Subsidies

Price Congestion to Provide Transit Subsidy

Prevent high transit costs from forcing people to leave jobs if they move.

New York City traffic by Nanira via Pixabay

What's the issue?

If gentrification drives lower-income residents to seek affordable housing far from the urban core, they are likely to face greater difficulty and higher costs getting to work. Low-income residents tend to rely the most heavily on public transit systems. Yet these systems are often underfunded, plagued by delays and patchy service. The higher cost and inconvenience of getting to jobs after being displaced to more peripheral urban areas can cause job loss for low income residents or make affording housing even more difficult.

How do transit subsidies help?

To address this problem, cities should create or increase transit subsidies for lower-income households. In Seattle, the ORCA LIFT program offers a lower transit rate for households with incomes less than double the federal poverty level, but in such a high cost city, families with higher incomes than this could also benefit from transit subsidies. Families earning 50-80% of area median income are just as likely to be displaced, and these incomes are still low enough that increased transit costs can constitute a burden. Therefore, Seattle should expand its program to households earning up to 80% of area median income.

To finance these transit subsidies, cities can levy a fee for private automobiles entering congested areas of the city, such as the central business district and put the revenue towards transit programs. This action in and of itself would would have multiple benefits. First, it would discourage automobile use in areas of the city served by transit, potentially freeing parking lots for housing development. Second, municipalities could capture the wealth of high-wage residents or even tourists that enjoy urban life but do not fund the infrastructure that supports it. Congestion pricing schemes are already popular in global cities like London and Stockholm, where they have generated millions in public revenue, reduced traffic, and boosted transit ridership.

Josh Cohen, "Seattle CDC Pairs Affordable Rent With Transit Discounts," Next City, 2016.

When and where does this policy work best?

This program is designed for cities that have functional transit systems and vibrant business districts. Transit-reliant workers would benefit most if revenues were then invested in subsidies.

Works best for neighborhoods in late-stage gentrification and neighborhoods receiving displaced persons

Works best in neighborhoods that are/have...

What are some possible problems and how can we address them?

Cities should avoid creating regressive policy by exempting disabled drivers and delivery and other work vehicles from fees. If they receive pushback from business owners who fear that fees will discourage people from patronizing downtown shops and services, they should cite the example of London, where businesses within the charged zone are growing faster than the ones outside of it. Additionally, cities could increase parking options at peripheral transit access points to enable more people who come from outside the city to take transit into the core.