The Economic merits of road diets and traffic calming

Road Diet: A modification of a road or street that narrows the road by removing travel lanes. Most commonly, a road diet involves the conversion of 4-lane street with a center turn lane to a 2-lane street with turn pockets, landscaped median, and on-street parking. The result, in general, is slower, more well-behaved car speeds with little or no reduction in traffic volume, greatly increased safety, improved street appearance, improved community pride, and a substantially improved environment for retail shops along the street.

Transportation Choice: Creating a travel environment in which it is safe, convenient, and pleasurable to use several forms of travel, such as using transit, walking or bicycling, as well as driving. The opposite of choice is an environment in which roads are hostile and distances to destinations are significant, which forces nearly all trips to be made by car.

Traffic Calming: Creating a travel environment on a street in which average motor vehicle speeds are reduced by the nature of the street design. Common calming tools include speed humps, roundabouts, traffic circles, road diets, reduced travel lane width, textured or brick street surfaces, modest turn radius size, street trees and buildings close to the street, and on-street parking.

An Economist View of Transportation Design
Many national and regional policies assume that increased driving provides economic benefits. Programs that subsidize or promote car use are often justified for the sake of economic development. Proposals that car subsidies be reduced, that roads not be widened, or transportation choice be promoted are often opposed because it is believed it would stifle economic growth. By contrast, we economists are not suggesting that cars provide no benefits, or that driving should be eliminated. However, above an optimal level, increases in car use appear to impose more costs than benefits, even when considering a relatively narrow, market-oriented scope of impacts (when non-market costs such as pollution, equity, and declining quality of life are considered, the optimal level of car use is even lower).
Businesses in car-dependent communities have greater overhead costs. They must pay higher salaries to account for the higher cost of living, are burdened with increased costs for employee and customer parking facilities, and additional taxes for roads. These additional overhead costs are worse for the economy than a tax because they are true resource costs, not just economic transfers.
In a community with a long history of road building, car use appears to experience diseconomies of scale due to increasing congestion and other externalities. Each driver benefits if others drive less, reducing demand for road space and parking. There are probably few, if any, further economies of scale in car, petroleum and roadway industries.
There is no reason to believe that car expenditures provide more jobs or higher profits than expenditures on other consumer goods. Because a very large proportion of fuel and car assembly is imported, money spent on fuel and vehicles provides relatively little employment in a community...Only 15% of gasoline expenditures remain in the local economy...A region's economy may benefit by selling vehicles or fuel to other regions, but not by increased consumption of such goods within the region.
Many countries experience their greatest periods of economic growth when per capita car travel is relatively low, while growth rates decline as households become wealthy enough to afford personal cars.
Empirical evidence suggests that the ability of each transportation technology to operate at top efficiency strongly depends on a balanced infrastructure which provides transportation choices. User can therefore choose the most efficient way to make a particular trip. A car-dependent system makes the entire transportation system less efficient.
In an auto-dependent community, road and parking capacity are high, individuals have little transportation choice, transit is not cost-effective, land use patterns are relatively sprawled and dispersed, non-car travel is stigmatized, and transportation planning is single-mindedly focused on auto-oriented strategies.
Car-dependent cities spend the most on transportation, have to subsidize their transit the most, bear the greatest indirect costs such as road crashes and pollution, and overall are committing a higher proportion of their wealth for non-productive passenger transportation...Cities with transportation choices gain an economic competitive advantage by reducing the total proportion of wealth that must be devoted to transportation. Conversely, excessive car use drains wealth from a city.
Once a road system becomes congested and land values have risen, there are significant diseconomies from increased auto use, since it becomes extremely expensive to increase roadway capacity.
An analysis of 70 American metro areas found that regions which invested heavily in road capacity expansion fared no better in reducing congestion than those that invested less in road capacity.
A new highway intersection may attract businesses to a specific location, but this often simply represents a shift of economic activity from one location to another, rather than creating true economic development.
Auto dependency reduces travel choices for disadvantaged people, and is therefore inequitable.
High levels of car use leads to less efficient land use patterns that require more travel for a given level of access. Cities with transportation choice can have a higher quality urban environment downtown and in outlying centers.
Public transit expenditures provide twice the return on investment as highway modifications.
Federal and state road construction grants appear to be "free" money that provide local jobs and business activity during the construction period, and are therefore attractive regardless of their long-term transportation impacts. This is distortive and therefore inefficient.
Free parking that "leverages" car communting may benefit car dealers, mechanics and gas stations, but it disadvantages the bus system, bicycle shops, and other businesses where consumers spend money they save from less expensive transportation: Housing contractors, restaurants, clothing stores, etc.
There appear to be few external benefits of car-oriented land use (such that a non-driver or people from other communities benefit from car-oriented land use patterns).
Car use provides many benefits, but like any economic activity, there is an optimal level of car travel consumption beyond which marginal costs exceed marginal benefits...Although less driving would reduce economic activity in the car industry, the resources saved would be available for investment in other sectors, leading to a net increase in total economic activity. The car industry is mature and overcapitalized, with little potential for growth or high profits.