Study shows building road capacity has a widespread economic benefit

Jul 11, 2019

You’ve heard the dogma from the anti-growth crowd stating we “just can’t build our way out of congestion” because it’s too expensive or futile, but what if that isn’t the case? What if, after all the rhetoric and hyperbole, we actually could build the capacity we need to get people moving and see a net benefit to our state’s economy?

The National Bureau of Economic Research (NBER) has released a new study by economists Treb Allen and Costas Arkolakis, called “The Welfare Effects of Transportation Infrastructure Improvements.” The paper surmises that there are potential gains in economic benefit and congestion relief from the addition of highway capacity. The basic idea is that better highways lower the total costs of moving goods and services between destinations.

The researchers built a model that shows that the cost of construction to add capacity to around 7,000 routes between 900 U.S cities was soon made up in the economic benefit and efficiencies in the system.

In other words, adding more lanes would reduce the trade costs of delivering goods to market.

Where the roads are built obviously affect the return on investment through saved time and additional reduced freight costs. The study demonstrates the “gains of adding 10 additional lane-miles range from $10 to $20 million for three quarters of the highway segments,” but, “substantially larger gains for segments within metropolitan areas and along important travel corridors, with the returns exceeding $500 million for two highway segments in the New York City metropolitan area. “

This economic benefit of adding capacity is either not understood or willfully ignored by the Washington State Department of Transportation (WSDOT).

The agency has taken an approach of managing, rather than relieving, traffic congestion. Agency officials state that their goal is to reduce, rather than accommodate, trips (think costly tolls, less cars, and more buses and expensive light rail).

In fact, WSDOT officials have confirmed they have stopped measuring statewide traffic delays, despite having a statutory obligation to reduce traffic congestion. This is short-sighted and has significantly increased the cost of traffic congestion on working families in the Puget Sound region over the last several years.

Worse still, the head of WSDOT, Secretary Roger Millar, has given up on fixing congestion and says congestion “is a problem we just can’t solve.”

In justifying his statement that congestion is a problem that cannot be solved, Secretary Millar argues that it would cost WSDOT $115 billion to get everyone moving on 451 additional lane miles at the posted speed limit (60 mph) at all hours of the day. Spending $115 billion to add 451 miles of roadway across Washington would be incredibly valuable for both working families (the majority of whom depend on an automobile for competitive access to employment) and freight movers. It would be far more valuable, in fact, than spending close to $100 billion including debt service to lay down 62 miles of rail to serve fewer than 3% of daily trips in 2040. But, economic benefit is largely ignored because it undermines the smart growth narrative.

WSDOT’s own, occasional efforts to reduce gridlock demonstrates their position on traffic congestion relief is not true. The agency’s decision to allow vehicles on the northbound I-405 hard shoulder during the afternoon peak period is one great example. After WSDOT opened the peak-use shoulder lane between SR 527 and I-5, 500 more vehicles were able to travel on I-405 during the afternoon peak hour (4PM to 5PM), and at faster speeds, as there were fewer vehicles per lane per hour. Faced with penalties if they did not reduce congestion in the express toll lanes, WSDOT found a way to do it. When congestion relief benefited the agency, they provided it.

The Puget Sound Regional Council (PSRC) planners admit that congestion will only get worse in the coming decades. Despite acknowledging the data, they still advocate for spending billions more of our money on mass transit and transit-oriented development rather than on roads. This defies logic and shows the group-think our agencies are immersed in.

Ironically, the policy of trip reduction rather than trip accommodation can only end in more traffic congestion, which hurts everyone. To benefit from transit, more people will need to live closer to where they work, increasing population density and real estate demand. This also increases the need for products and services in a given area, requiring additional freight movement, increasing congestion still further. These conditions exacerbate the social stratification we already see between those who can and those who cannot afford to live near employment centers.

The WSDOT policy, advocated for and supported by its leadership and groups like the PSRC, shows that the agency has effectively given up on its primary responsibly to provide a transportation system that encourages freedom of movement for all road users. Fortunately, there is another way.

The NBER study shows that the economic and mobility benefits of capacity far exceed the cost of construction and maintenance. Rather than dismissing the benefits of accommodating trips, WSDOT should be honest and perform a complete cost-benefit analysis of strategically adding capacity in Washington State to justify its position. The agency’s agenda-driven approach to managing congestion rather than adding capacity to improve speeds for commuters and freight needs to be reconsidered.