How land use patterns keep driving cheap: Geographic support for transportation taxes

Urban planners often prescribe compact, walkable development as a way to reduce car travel, emphasising the roles of physical design and land use regulations. Economists, in contrast, stress how pricing – carbon taxes, gasoline or petrol taxes, tolls, and congestion charges – can mitigate pollution and other negative impacts of driving.

But where do these taxes on driving come from? There is no benevolent authority who sets the fuel tax at the optimum level. Rather, taxes are determined by elected officials, who face political pressures from their constituents and campaign contributors, or by voters directly through referenda and ballot initiatives.

Moreover, taxes that make driving more expensive are politically fraught. Despite more than 50 years of economic consensus about the desirability of congestion pricing, only a handful of cities – notably Singapore, London, and Stockholm – have actually implemented such schemes.

In our new paper, we show that voters in California are more willing to support taxes on driving when they live in dense neighbourhoods that are well served by public transportation. The magnitude of the effect is modest – a few percentage points – but could make the difference in a close election. Ideology is the dominant factor in voting decisions – support for taxes on driving is far greater in Democratic neighbourhoods – but we identify a separate effect of urban form and public transportation after carefully controlling for ideology.

Our findings reinforce the synergies between pricing and the built environment. Researchers have already demonstrated that higher fuel taxes lead to more compact development through creating market demand for housing where there are alternatives to the private car. And pricing may have greater impacts on people’s travel decisions when they live in neighbourhoods with realistic public transit, walking, and cycling choices. Our paper shows that compact development and frequent transit can also lead to voter support to increase taxes on driving.

Moreover, our findings imply that the voluminous research on land use and transportation underestimates the long-run impacts of compact development and public transportation on driving. Prior studies capture how density and other aspects of urban form affect car ownership and driving, but not how they change the political calculus of taxing car use.

Much has been written about how path dependencies in land use patterns and public transportation systems lock in automobile-oriented urban form. From a political economy perspective, such land use patterns may also lock in cheap driving.

Read the full paper on Urban Studies OnlineFirst here.