With tolls of $1 to $5 per crossing coming to a floating bridge near you in less than a year and local governments planning to add tolls to every freeway as early as 2030, now is a good time to think about how adding such per-use fees to our freeways might affect the home prices in the non-urban-core neighborhoods.
This topic is similar to the gas prices discussion we had back in 2008, but freeway tolling seems likely to have an even greater psychological effect than gas prices since you face the costs every time you get in the car instead of just once a week when you fill the tank.
Let’s make a conservative estimate that a post-tolling exurban commute will cost a potential homebuyer $5 a day. That’s roughly $100 a month, which can buy you about $20,000 more house at 5% interest rates. Not exactly enough to move you in all that closer.
What if we make a more extreme assumption about the cost of tolling to a daily exurban freeway commuter? Let’s say the new everywhere tolls add $20 a day to their commute costs. That’s about $400 a month, which is approximately equivilent to $80,000 in purchase power at 5% interest. Now we’re talking. That’s more than the difference between the median prices of Marysville and Shoreline.
Unlike gas prices, which don’t really make enough of a difference in a family’s bottom line to justify moving closer in, $5 per-use tolls on every freeway around Seattle may be just the social engineering that local politicians have been looking for to kill the “drive till you qualify” home-buying strategy.
What about for you? Is future tolling something that you take into consideration when you’re looking for your next home? Do you think it will be a factor for enough people to make a significant difference in the sales volumes in the further-out cities and rural areas?