Like a thunderbolt from the heavens, last week Governor Kathy Hochul indefinitely postponed the $15 congestion fee for cars entering Manhattan on 60th Street which was scheduled to go into effect on June 30. In my view, she made the right call based upon the old physician’s maxim: first, do no harm. It’s a savvy political move as well. Let me explain.

The governor correctly noted that the congestion pricing plan risked unintended consequences. More specifically, the city has not completely recovered economically from the pandemic and is therefore in no position to discourage people from coming into Manhattan right now.

Second, the plan would impose a financial hardship on many commuters who are already under inflationary pressure.

New York City has made major strides in emerging from the pandemic. The neighborhoods are thriving, crime is down, and the streets are much more crowded with pedestrians which is very good for the retailers’ businesses and safety in general. However, we still have one significant Achilles’ heel: the employee attendance at office buildings has hovered around 50% for well over a year. The last thing we need is to discourage those workers, many of whom have the option of working remotely, from coming into Manhattan along with people coming into the city for theater, museums, sports at Madison Square Garden or restaurant meals.

In addition, anyone who has been paying attention knows traffic is already considerably reduced since the pandemic, and particularly on Mondays and Fridays. As a result, the congestion pricing fee is probably overkill. Obviously, the main beneficiary of this welcome change are everyday New Yorkers, including the teachers, hospital workers, police and the like who live in places that are inconvenient to mass transit and would have had more difficult commutes if they had to change their travel habits.

It’s never mentioned, but Manhattan already has a form of congestion pricing in place at most of the major crossings which have significant tolls including the Holland, Lincoln, and Brooklyn Battery and Midtown Tunnels, and the George Washington and RFK Triboro Bridges. Mind you, I’m not an anti-climate change zealot. If the city needs money for transit projects, I don’t see anything wrong with placing a moderate toll of a few dollars on the other bridges crossing the East and Harlem Rivers which would also discourage car usage.

Further, no one knows how many cars would be kept out of town by congestion pricing and what the impact would be on pollution. Estimates are that driving would be reduced by a paltry 15%. As noted above, the level of traffic is already considerably down due to the pandemic, and has anyone done a before and after comparison showing the lower pollution level? In addition, I saw another statistic that lost time congested streets costs the city $20 billion a year. No one likes sitting in traffic, but that is a lot of money and I’d like to see how that massive amount was calculated.

But here’s the tip-off: this is somewhat of a money grab by the MTA, which genuinely does need the money for future projects such as the extension of the Second Avenue subway. Unlike in London, the NYC rules are very parsimonious with exemptions to the fee. For example, people who live below 60th Street that leave the designated zone would be assessed for the sin of returning home when they cross the border of what would effectively become a Balkanized city. In contrast, the fee for locals in London is discounted by 90%. Second, in London there is an exception for electric vehicles which don’t pollute, but not under our plan.

The governor was undoubtedly aware that the pricing scheme was very unpopular as a Siena Poll showed that 63% of New Yorkers were against congestion pricing and 26% approved. She also likely knows that the British Labour Party, which is poised to sweep the upcoming elections in the UK on July 4, lost a recent parliamentary byelection in London after its Labour mayor further expanded the area covered by the congestion scheme there. Governor Hochul, who was roasted in her 2022 gubernatorial election on the local issue of crime when she was supposed to win in a landslide, has surely taken note of the need to respond to the concerns of her constituents on the ground. To be fair, she is also taking criticism for her failure to act more quickly to quash the fee which understandably enraged supporters of the plan and potentially wasting close to $500 million expense for the infrastructure needed to implement the new system (by the way, isn’t that half of the anticipated annual revenues from the fee?).

Now if the city really wanted to do something that would benefit everyone, they can consider banning the infernal electric bikes and scooters that clog the streets and endanger every New Yorker who takes their life into their hands for the exalted privilege of going to work, school or even the supermarket. These days we all need eyes in the back of our heads to keep track of the mayhem out in the streets, and it’s not because of criminals. As an example, a 75-year-old rabbi crossing the street was just seriously injured by a hit-and-run e-biker that ran a red light earlier this week. The streets also aren’t safe for the regular bike riders either as one was just killed by a beer truck. Sadly, the so-called Vision Zero plan of prior years is more like flying blind.

In response, Mayor Adams just said he wants a crackdown on illegal e-bikes this summer. There is also currently a bill before the City Council to ban electric bikes and scooters in public parks. But that’s not nearly enough to keep us safe. If we want to do something good for New York, we should ban e-bikes and e-scooters entirely. Now that’s a common sense plan everyone should support. As for congestion pricing, this is the wrong time as it threatens NYC’s still fragile recovery.

Thank you,

Ruth Colp-Haber

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Wharton Property Advisors