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Vehicles idle in traffic on West Broadway in Vancouver on March 12, 2020.DARRYL DYCK/The Globe and Mail

The charging of road tolls, better known as mobility or transport pricing, is a controversial practice that has become a hot topic in Vancouver now that city council has voted in favour of officially considering it as part of a climate emergency action plan.

Desperate to get residents out of their cars, other cities have already adopted the policy with success, including London, Stockholm and Singapore. New York and San Francisco have proposed congestion pricing in the works.

The idea is that drivers pay a toll to enter a defined area of the city most encumbered by traffic congestion, usually restricted to the busiest time of day, with exemptions for commercial vehicles. Typically, cameras capture licence plate numbers and drivers receive a bill. In Vancouver, it’s at the research and engagement stage right now, with city staff looking into a pricing strategy to present to council in 2022. In 2023, it will go to council for final approval, and if it passes, it will be implemented by 2025. It would have to pass several hurdles, including inevitable pushback from residents and businesses that are potentially impacted. The city is leading the way with the move toward mobility pricing, but it says it’s consulting with the province and regional partners.

In Vancouver, the proposed “metro core” that would be subject to a congestion toll is 16th Avenue to the south, Burrard Street to the west, Clark Drive to the east, and Burrard inlet to the north.

Those living within the metro core would enjoy reduced traffic and noise, improved air quality and a more walkable existence. But the area also contain some of the priciest real estate in Metro Vancouver. Some wonder whether an electronically cordoned off zone will have the effect of a gated community, something like the one created when traffic was diverted from Point Grey Road, west of Macdonald Street to Alma. In that case, property owners with waterfront views had the exclusive benefit of no longer dealing with any car traffic, adding value to an already prestigious location.

Economist Nancy Olewiler, director of Simon Fraser University’s school of public policy, is concerned that if Vancouver goes solo with mobility pricing, it could create an even more exclusive housing market. She is for mobility pricing, but only on a regional basis. She also gives city staff credit for putting a lot of research into the proposal, which, she says, is still a long shot.

“[The idea] that downtown Vancouver is becoming more and more specialized, it will accelerate that, in my view,” Prof. Olewiler says.

Properties inside the zone might gain added value from the centrality, clean air and downtown amenities.

“You could say that if you are inside the line, the value of not having to pay the toll would be capitalized into your house price.”

A 2016 paper authored by London School of Economics doctoral researcher Cheng Keat Tang, showed that in London there was a temporary drop in housing prices within the zone following the introduction of the unpopular congestion charge introduced in 2003. But then, prices began to increase as residents saw the benefits.

Housing prices are a “useful metric” of how much residents value mobility charges, Mr. Tang wrote.

He found that homeowners valued the improved traffic conditions enough that when a second zone was temporarily added, property prices increased by 4 per cent, relative to home prices outside the zone.

“My findings show the effectiveness of the congestion charge and that homeowners appreciate these benefits by paying more for homes in the zone,” Mr. Tang wrote.

His research also showed that in terms of reducing traffic and congestion, the charge was highly effective.

But London and Stockholm already had well-established transit systems before the charges came into affect, and are physically very different cities from Vancouver, Ms. Olewiler says. Policy makers need to take a “hard look” at the demographics of the downtown labour force, where those people live and what their options are, Ms. Olewiler says. She says, for example, that low-income service workers coming from locations that don’t have transit options might be adversely impacted.

“As someone who looks at public policy, I’m not enthused about cities going off on their own … because we are a region. We are not Singapore. I think we should have something that is more regional wide, because the implications for housing, transit and congestion don’t stop at Vancouver,” Ms. Olewiler says

Tsur Somerville, professor at the Sauder School of Business at the University of B.C., says there are a lot of variables to consider, including the transit system, and how hard the commercial sector in particular could be impacted. For example, he says a downtown business that has a lot of employees who drive to work may opt to relocate to Burnaby, B.C.

“I recognize that we have congestion – I’m not saying we don’t,” he added. “But compared to other places that have this [pricing], one, our congestion is not so bad, and two, our public transit network isn’t quite as well suited.

“The better the public transit system, the smaller effect this will have on real estate – and by smaller I mean negative effect,” Prof. Somerville said.

He says other policy changes, including increasing the density in low-density residential areas, would need to complement the plan.

“The City will do this and we will still have single-family zoning at 29th Street SkyTrain station? Really?” he says. “These things should be coordinated.”

Charles Gauthier, president and chief executive officer of the Downtown Vancouver Business Improvement Association (DVBIA), says his organization is opposed to Vancouver taking on such a scheme without being part of a coordinated regional plan. The Mayors’ Council and TransLink released a report on regional mobility pricing two years ago, examining congestion point charges of about $5 to $8 a day and multi-zone distance based charges of about $3 to $5 a day. But so far, there hasn’t been any follow-up action.

Mr. Gauthier says he’s not as worried about downtown being as affected as other retail areas. Once the pandemic is over, downtown will have the benefit of tourism, office workers and conventions. Other shopping districts won’t, Mr. Gauthier says.

“There are a number of BIAs in that area that are fragile at best in most times, and now with COVID are even shakier – mostly retail – and I suspect this could drive a stake even further into their long-term survival.

“Our endgame is, we want this to be coordinated, regional, and we don’t support Vancouver going alone because it’s a bit of an unknown. How will it work? Who will pay it? When will it be in effect? … Based on all that, we can’t get behind this.”

Neil Wyles, executive director of the Mount Pleasant Business Improvement Area and former restaurateur, says a congestion toll would directly impact the busy Main Street retail community if residents had to pay to drive north of 16th Avenue.

“People wouldn’t come here to do their daily shopping or visit these merchants if they were outside of this area,” Mr. Wyles said.

“I feel it’s a tax grab, I really do. I would support this being a regional approach, if this was done through a body like TransLink.”

He also wants more clarity around where the revenues would be going and what the charge would be.

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