HOT Lanes: A Better Way to Attack Urban Highway Congestion

June 8, 2000 • Commentary
By Robert W. Poole Jr. and C. Kenneth Orsk
This article is adapted from a longer version that appears in the current issue of Regulation magazine, published by the Cato Institute.

As anybody who uses an automobile in the Washington, D.C., area knows, traffic around here is awful, and it is not just a matter of perception: Recent surveys have all ranked the D.C. metropolitan area as one of the worst traffic areas in the nation.

The conventional solution of building our way out of this mess with new highways has been tried again and again but has failed repeatedly, for two reasons: NIMBY (“Not‐​In‐​My‐​Back‐​Yard”) activists have effectively blocked new road construction, such as in the case of the Intercounty Connector in Montgomery County. And even if you could marshal enough political power to overcome NIMBY opposition, new roads fill up almost as quickly as they are finished because they are a “free good.”

To help alleviate those problems, High‐​Occupancy Vehicle (HOV) lanes were once seen as innovative and beneficial, the idea being that they would encourage carpooling and thereby reduce highway congestion and air pollution. But opposition to HOVs is spreading as transportation researchers find HOV lanes to be ineffective in reducing congestion, environmentalists become skeptical that HOV lanes actually reduce traffic, elected officials come under increasing pressure to convert them to general‐​purpose lanes and irate commuters stuck in regular lanes conclude that carpool lanes are intended to make life miserable for solo drivers. Indeed, HOV ineffectiveness has caused politicians to take notice: In New Jersey, California, Minnesota, New York and Virginia, selected HOV lanes have either been discarded or had their usage rules modified.

Roads are a scarce good in great demand, but since we don’t charge people for using them, overcrowding is the inevitable and eternal consequence. The way to alleviate congestion is to charge people sufficiently to reduce demand, thus allowing the free flow of vehicles, a principle as elementary and undeniably true as the law of gravity. But introducing congestion charges is politically difficult. A politically acceptable way to introduce charges involves the conversion of HOV lanes to High‐​Occupancy Toll (HOT) lanes. How, exactly, do HOT lanes work?

HOT lanes can be established rather inexpensively by placing electronic toll booths in existing HOV lanes, alongside the travel lanes or in the medians of highways. As of 1999 there were 23 HOT lanes projects (at varying degrees of development) in 11 states. A significant benefit of those projects is that they can often be financed, developed and operated by private firms. Indeed, effective public‐​private partnerships and enabling laws are fundamental to the success of HOT lanes projects. The 91 Express Lanes project in Orange County, California, was opened in late 1995, one of four private toll road ventures authorized by the California legislature in 1989. Project development and operating procedures are spelled out in a franchise agreement signed in 1990 by the state and the facility’s operator, the California Private Transportation Company. Four HOT lanes (two in each direction) were built in the median of State Route 91, which was previously a congested, eight‐​lane freeway; tolls vary with time of day to ensure that the toll lanes always remain uncongested. To keep traffic flowing quickly and smoothly at rush hour, Express Lane tolls have been raised four times since 1995, and currently the cost of traveling the entire 10‐​mile facility ranges from 75 cents to $3.50.

Perhaps the most troubling argument against HOT lanes is the claim that they are elitist “Lexus lanes” that the rich can use to speed past the poor, who remain stuck in traffic. But another way to view HOT lanes is as a step toward a system that better meets users’ unique needs. A mother racing to get to a daycare center to avoid paying dollar‐​a‐​minute late fees may well decide it is worth paying $2 to use a HOT lane. Other people would prefer to remain in the regular lanes — which a HOT lane program does not take away — and pay in the form of time rather than dollars. Data from existing HOT lanes projects indicate that people at all income levels use the lanes when saving time is important to them.

HOV lanes — under attack by motorists, academics and environmentalists — may not, and should not, survive politically. A much better alternative is HOT lanes, a policy innovation whose time has come. The HOT lanes concept is a rare policy innovation that improves economic efficiency and is politically feasible as well.

About the Authors
Robert W. Poole Jr.
C. Kenneth Orsk