Times has a nice article that points to research which explains that road capacity expansions, extensions to public transit, and changes in land use are not very effective in addressing traffic congestion. Instead, the only effective solution to alleviate traffic snarls may be to price road usage with something like a congestion pricing.
We investigate the effect of lane kilometers of roads on vehicle-kilo- meters traveled (VKT) in US cities. VKT increases proportionately to roadway lane kilometers for interstate highways and probably slightly less rapidly for other types of roads. The sources for this extra VKT are increases in driving by current residents, increases in commercial traf c, and migration. Increasing lane kilometers for one type of road diverts little traf c from other types of road. We nd no evidence that the provision of public transportation affects VKT. We conclude that increased provision of roads or public transit is unlikely to relieve congestion.
Urban density appears to have a small causal effect on driving. Our estimates of the density elasticity are generally between -7% and -10% and is about -8% in our preferred specification... In particular, even concentrating the population residing in 83% of the area the continental us into an area of about 1500 square kilo-meters would result in only about a 5% decrease in aggregate driving, and this policy appears to describe the upper envelope of what densification policies can accomplish. On the other hand, existing estimates of the gasoline price elasticity of driving suggest that a similar decrease in driving would be accomplished with a gas tax that is no larger than gasoline price fluctuations observed over the past five to ten years. Congestion pricing programs appear to have even larger effects. In sum, while dense urban development may well be desirable because it provides a residential environment where people want to live and that make them work more productively, it is probably more costly to manipulate driving behavior through densification policies than through congestion pricing or gasoline taxes.
I have blogged several times, including one recently highlighting the need for a multi-pronged approach to address urban transport problems. Any meaningful effort has to involve the use of all the four levers - increase the cost of vehicle ownership (higher emission standards, higher vehicle taxes etc), vehicle usage (congestion charging, higher parking fees etc), extensive promotion of public transport, and focus on transit-oriented development (higher FAR on transit corridors and around stations).