A Price to Enter: Anticipatory Housing Market Sorting and Access Inequality under New York's Congestion Pricing

TL;DR

This paper investigates how New York City's congestion pricing influences housing prices, rental markets, and spatial equity, revealing early market sorting, segmentation, and implications for urban access and inequality.

Contribution

It provides empirical evidence on housing market responses and spatial effects of congestion pricing using advanced causal inference methods in New York City.

Findings

Housing prices inside toll zone declined by 3.3%

Rent declines of 3% observed, especially among lower-value segments

Price resilience among premium properties indicates market sorting

Abstract

This study examines how congestion pricing shapes housing market outcomes and spatial equity in New York City. Using high-frequency sales and rental data and a combination of propensity score matching difference-in-differences, geographic regression discontinuity, and event study designs, the analysis identifies distinct short-run adjustment patterns triggered by the policy announcement. Housing prices inside the toll zone fell by about 3.3% and rents by 3%, with the sharpest declines occurring immediately after the announcement. These effects weakened over time, and price resilience emerged among premium properties, indicating early market sorting and growing segmentation. The Geo-RDD results show a clear boundary penalty, with properties just inside the cordon experiencing more pronounced declines than otherwise similar properties just outside. Renters and lower-value segments were more exposed to early adjustment pressures, while implementation-stage effects were limited. The findings suggest that congestion pricing can reshape urban space not only by altering mobility incentives but also by redistributing access and opportunity. Equity-oriented design that includes early-stage support for boundary neighborhoods and renters, along with reinvestment of revenues into untolled transit access, is important for ensuring that the benefits of congestion pricing are shared rather than concentrated.