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3 Enormous Benefits to Charging the Right Price for Parking

Less traffic, higher transit use, and more tax revenue — charted and mapped.

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Costanza's universal theory of parking states that drivers should never pay for a spot because, if they apply themselves, they'll get it for free. Most U.S. cities do everything they can to abide the theory. They undervalue the price of street spaces. They keep parking so cheap it encourages driving (and thus undermines their own transit investments, leading to more driving). And they require a minimum number of parking spaces for new developments whether residents need them or not.

These policies conspire to create a situation in which even someone as lazy as George Costanza can eventually find a free — or, at least, very cheap — parking space in the city. But what's thrilling for Georgie Boy (assuming no one steals his space by pulling in head first) is bad for the city as a whole. Three recent studies highlight big benefits to setting the right price for city parking: less traffic, more transit use, and greater tax revenue.

Less congestion

First comes a close evaluation of SFpark, San Francisco's world-class effort to match the price of parking with real-time demand. SFpark changes the cost of street spaces in commercial areas to maintain an average occupancy of 60 to 80 percent. By making sure the streets are never completely full, the program hopes to reduce circling and thus congestion on city streets.

The new study (here, in full), led by Adam Millard-Ball of UC-Santa Cruz, analyzed hourly parking data to determine that SFpark has indeed achieved this target occupancy rate through demand-responsive parking prices. As a result, the researchers conclude, SFpark was responsible for a 50 percent drop in cruising for spots. Millard-Ball calls the finding evidence "of the benefits of meters more generally," and says even cities without sophisticated programs like SFpark can benefit from responsive pricing. 

"People might not like new meters or an extension of meter hours, but certainly our data suggests that they're very effective in reducing the amount of traffic cruising for parking," he says.

If anything, says Millard-Ball, the rate changes imposed by SFpark weren't drastic enough. Bay Area drivers were actually slow to respond to the price changes, perhaps because SFpark only raises meters a quarter at a time. But the impact of any parking price on cruising came through most clearly in the traffic spikes that occurred right after the meters turned off (below, circling in the Marina neighborhood surges in red at 6 p.m. / 1800 hours) — another reason to extend pricing into nights and weekends, and onto residential streets:

"I think the broad lessons are, firstly and most simply, that charging for parking works," says Millard-Ball. "We see this most dramatically in our data around the time the meters get switched off. Cruising spikes, and it's much more difficult to find a space."

Higher transit use

Another new study, this one led by Amy Auchincloss of Drexel, surveyed public parking costs from 2009 in 107 U.S. cities. The researchers found a significant association between these parking prices and public transit use during the same period. In larger cities — defined as those with more than 6,700 people per square mile — transit passenger miles increased 2.3 fold with higher parking costs, even adjusting for the economics of a given city. (Note though that the researchers found no such link in smaller cities.)

The upshot is that cheap parking encourages people to drive into a big city. Put another way, public transit investments alone aren't enough to attract riders. Cities must consider raising the cost of driving and parking, too.

More tax revenue

The third study in Costanza's ménage a parking focuses on the effects that parking can have on a city's bottom line. Researchers at the University of Connecticut and the State Smart Transportation Initiative found that land devoted to street and garage parking generates less tax revenue for a city than other types of development do. This is especially bad news for cities with minimum parking requirements — policies that compel developers to provide a certain number of spots regardless of market demand. (That includes most U.S. cities at the moment, though a trend toward parking maximums has started in some places.)

In Hartford, this lost tax revenue amounts to roughly $1,200 per year per parking spot (below, Hartford parking in 1960 and in 2000). That amounts to $50 million a year for a city in which all downtown real estate pays $75 million in annual taxes. "If the city can find new uses for these parking lots, then this means that it can bring a lot of revenue," study co-author Norman Garrick told WNPR in Connecticut.

To be sure, there are equity challenges that go along with raising parking prices on city streets. But cheap parking is already compromising fairness in many city neighborhoods — hurting traffic, transit, and taxes for the many while helping Costanza's theory for the few. A better theory of parking would hold that drivers should never pay less for a spot than it's truly worth.

Top image: Alfonso de Tomas/Shutterstock.com

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