Los Angeles is known for a lot of things: Hollywood, world-famous beaches, and great food. Yet, it has also earned a reputation for being home to some of the most congested highways in the country. One of the major factors contributing to LA’s traffic woes– besides its high population– is the urban sprawl the city is infamous for. This sprawl means that unlike cities like New York or Chicago, Los Angeles is not very walkable and public transportation is often insufficient. Instead, LA residents must rely on their cars for nearly all transportation.

Traffic congestion is more than an annoyance for Angelenos. Estimates show that LA’s congestion costs the city $19.2 billion annually or $2,828 per driver. Of course, there is little consensus about the best way to alleviate these traffic problems, but that has not stopped city planners from trying. One possible solution, the high-occupancy (HOT) lane, allows city planners to more effectively utilize existing infrastructure while also pricing traffic in a politically feasible manner.

Beginning in the 1970s, high-occupancy vehicle (HOV) lanes were introduced to the LA area. The idea behind them is simple: if people are incentivized to ride together, there will be fewer cars on the road while still transporting the same number of people. These lanes were also intended to benefit the environment by decreasing the number of cars on the road, thus saving fuel and reducing emissions. Unfortunately, few solutions work in practice as well as they do in theory. 

While they may be popular with certain drivers, HOV lanes have largely been shown to be ineffective at their two main goals: they fail to promote carpooling to an appreciable extent and, more importantly, they can often make traffic worse than if they were general-purpose (GP) lanes. Many cars utilizing carpool lanes are filled with passengers that would have been carpooling regardless of incentives to do so; think of parents taking their children to school, or families going to the store together. Only 10% of carpools in major cities are “induced” by HOV lanes. This, combined with the fact that HOV lanes “suffer a 20% capacity penalty,” and that “a system with one HOV and three GP lanes carries the same number of persons per hour as a system with four GP lanes,” and it seems clear that HOV lanes largely fail at their intended purpose.

Simply adding more capacity to roads and freeways also, somewhat paradoxically, often fails to reduce traffic congestion. This is due to a concept known as “induced demand.” When more new capacity is created, traffic is reduced in the short term, and driving suddenly becomes a more attractive option for commuters. Instead of walking, taking public transport, or simply not traveling at all, people will instead choose to drive. In economic terms, the extra capacity on the roadways lowers the opportunity cost of driving compared to alternative options. These extra cars on the road eventually raise congestion levels again until traffic is as bad as it was before. This phenomenon is well observed too. Recently, the Katy Freeway in Houston, one of the busiest stretches of highway in the U.S., underwent a $2.8 billion expansion project to relieve congestion. In the three years after the project’s completion, however, rush-hour congestion had increased by over 50%.

This situation seems like a ‘Catch-22.’ Increasing roadway capacity may be helpful in the short run, but increasing roadway capacity by any reasonable extent will fail to solve traffic issues in the long run. On the other hand, decreasing roadway capacity on already-congested roads would certainly make congestion worse and would be economically detrimental without viable alternatives simultaneously implemented. 

Although LA has continued to build new HOV lanes in recent years — to the tune of billions of dollars — the county has also been experimenting with a new variation on the HOV lane, the high-occupancy toll (HOT) lane. HOT lanes incentivize carpooling similarly to HOV lanes by allowing carpools to travel in less congested lanes, but they also add the option for single-occupancy vehicles to pay a toll for access to the lanes. In the LA area, this system has been put into place on the I-10 and I-110 freeways under the name “Metro ExpressLanes.” The lanes work by detecting a transponder commuter’s place on their windshield. The transponder also includes a selector switch that enables a driver to indicate how many passengers they have in their vehicle, allowing them to avoid the toll applied if they are carpooling. Near the entrances to these lanes are also electronic billboards that display the current toll for the HOT lanes based on traffic conditions.

LA’s Metro ExpressLanes on the I-110 and I-10 freeways start at $0.25 per mile under low traffic conditions and can range up to $1.40 per mile under high-traffic situations. This “congestion pricing” helps to ensure that the cost of the HOT lanes remains high enough to keep traffic flowing smoothly. Higher tolls during rush hour also may cause drivers to plan their trips for off-peak hours, further helping reduce road congestion.

On paper, these lanes seem to solve many of the issues inherent to HOV lanes using technology and basic economics. The free tolls for HOVs maintain the incentive for carpooling, but it also allows the lanes to be more fully utilized by giving the option for single-occupancy vehicles to pay extra to bypass congestion. This toll also helps to limit the effects of induced demand by creating an additional cost for drivers to use the faster lane. In essence, a driver will compare the value of saving time against the price of using the faster lane. 

HOT lanes can also allow for public transport systems to operate more efficiently. Bus stops are often located along HOT lanes, allowing buses to have a more consistently congestion-free path through the city. The LA Metro Silver Line, which primarily utilizes the ExpressLanes on the I-110 freeway, saw nearly a 30% increase in ridership after tolls were introduced on the lanes. This boon to bus routes has not only occurred in LA either. There is evidence that average travel speeds for buses and ridership have increased significantly after HOT lanes were opened in cities like Miami, Minneapolis, and Atlanta.

So if HOT lanes seem to have so many benefits, why are they not more common? 

Perhaps most importantly, HOT lanes are not cheap to implement. HOT lanes have been relatively easy to implement in the LA area as the city has already spent decades developing its HOV lane infrastructure. While not costless, converting HOV lanes to HOT lanes requires far less money than constructing entirely new lanes, overpasses, and exits. The total implementation cost of LA’s current HOT lanes on I-10 and I-110 was $79 million, a tiny sum in comparison to the newly constructed I-405 HOV lanes. However, the readily convertible infrastructure that LA has does not exist in every other county. For some places, the cost of constructing news lanes or converting existing lanes may make HOT lane projects prohibitively expensive. 

It is also important to consider that HOT lanes would provide no extra benefit on freeways where congestion is not already a frequent problem; if traffic flows smoothly all the time, there is no incentive for drivers to pay extra to use an express lane. This is why they tend to work best in high population, high congestion cities like Los Angeles.

HOT lanes are also often criticized as being a form of a regressive tax, privileging those who have enough money to make the time saved worth it. This has led to some labeling HOT lanes with the pejorative “Lexus Lanes.” Although the tolls on HOT lanes are technically not a tax, the social equity of priced lanes is worth considering. While these lanes may seem to benefit high-income commuters more, the inequities stemming from privileging these drivers with faster travel lanes may be made up for by the revenue they generate. In 2018, the LA ExpressLane program brought in $63 million in tolls, some of which were put towards funding for new city buses. The net tolls from the ExpressLanes in Los Angeles must also be reinvested in transportation projects within the corridor they were collected in. This expenditure includes improvements such as nearly $3.8 million to a downtown LA bike share program or $2 million towards improving a south LA Metro station. In this way, HOT lanes can act as a means of collecting and redistributing wealth from higher-income commuters towards local communities in need of new transportation infrastructure. This is all without mentioning that by diverting some drivers, the existence of the toll lanes can also indirectly benefit commuters not using the HOT lanes by reducing overall congestion at peak hours. A UCLA study supports this idea by suggesting that people across all income levels supported toll lanes on freeways after having experienced them in Los Angeles.

Despite their revenue-generating effects, many economics-based studies go as far as to claim that HOT lanes alone are not enough to charge commuters for the negative externalities they produce through increased road congestion and environmental impacts. Instead, they argue that commuters should be more universally charged for trips on major roadways, especially at peak hours. London, for example, has already implemented a similar policy by charging all vehicles a toll for traveling within Central London during certain times of the day. Creating a similar policy in a city like LA is often seen as a political infeasibility because drivers feel they should not have to pay for something that, at least at the point of access, has always been free. For this reason, HOT lanes serve as a compelling middle-ground that allows city planners and politicians to implement congestion pricing in a politically viable way.

HOT lanes are not a new idea, but their popularity has grown a lot in recent years. In addition to the twelve freeways in the US that have already implemented them, there are also ten more HOT lane projects in development across the country. While the idea of introducing a new toll may not excite many, the potential upsides to properly planned and managed HOT lanes should. Even if a HOT lane was only able to reduce congestion by a small amount, it still would be providing much-needed money to fund projects that help support both those who own cars and those who do not. In this way, HOT lanes represent an important way to start pricing the negative externalities created by car traffic and congestion.

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