Cost of Congestion Study: Where’s the ROI

I agree strongly with the recent posts by Rex and Evan about the Costs of Congestion report. This report helps define the shape and size of the existing and future congestion problem. The report outlines our robust transportation industry and that congestion can increase business costs.

While short on details, the PBA said they used the Regional Transportation Plan as the model to building out an illustrative transportation plan. Realistically, both the presentation and the report focus on highway development, investments that will only slow the inevitable gridlock.

The PBA presentation discussed Return on Investment (ROI) as a tangible reason to invest, that is if the region invests $10 billion over 20 years (rather than the projected $4 billion), we will see a 2:1 ROI, or $20 billion in economic benefits.

Their ROI calculations include the value of commuter’s personal time; in fact it’s over 50%. It’s easy to argue that personal time is not calculated in corporate balance sheets. Individual time is qualitative in nature, like other important goals such as livability, air quality, personal health, and access for low-income persons.

Without personal time, the expected ROI is 1:1. This is way too low.

When investing for economic reasons, the region and ODOT in its Oregon Transportation Plan update need to achieve a higher return. The business community, both large and small, must work with government and citizens to develop a more effective measurement tool that directs our limited resources towards strategic projects that can incubate a multitude of industry types and sizes.

I applaud Metro for discussing the Price of Government model as a way to reinvent the future transportation and land use plans. However I have heard less from Metro about what they currently value. Metro should engage the issue ROI from a strategic inquiry. Public questions include “does investing in the centers measure also bring significant economic investment? Could it do better than expanding our freeways?”

Metro should also be pushing investments that make the transportation industry more efficient overall. The upcoming Metro Freight Plan must do what the Portland Freight Master Plan did not, seriously take all modes into account. Water, rail, and ground transportation all have needs and Metro must focus on the primary bottlenecks that increase volumes while abating congestion.

The PBA presentation offered one potential solution, pricing the freeways. Above all solutions, pricing is the most effective at curtailing traffic congestion. Rather than spending $6 billion more, the region could collect this amount and distribute funds more judiciously.

There are many reasons to invest in transportation, economic develop being only one. Yet with these lenses in, government must get serious about spending the money in ways that will most improve the economy on all scales. Luckily, I believe that strategic investments will also lead to facilities that are good the qualitative ideals like livability and healthy communities.

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