Urban neighborhoods across America have a “parking problem.” Free curb spaces are hard to come by during busy times, especially in commercial areas. Because curb spaces are so much cheaper than garages, drivers continue to cruise for spaces. That’s the reason one of the major recommendations of parking reformers like Donald Shoup is raise the price of on-street parking, particularly in commercial districts. (I’ll discuss his proposals for residential neighborhoods later.) In their view, the “shortage” of on-street spaces results because the spaces are underpriced. As a result, drivers cause huge amounts of wasted time, fuel, and unnecessary traffic. These spaces should instead be priced high enough to ensure a few empty spaces at all times. During peak periods parking would be expensive, but at other times it would be much cheaper or even free.
In response to my recent post on Donald Shoup’s High Cost of Free Parking, one commenter asked “isn’t the curb thing just regressive taxation, discriminating who can shop downtown by income?”
While the economics of the proposal is straightforward enough, the ethics aren’t. Would performance-based meter pricing hurt the poor?
In my view, the equity of switching to performance parking depends on 1) who’s parking, 2) the costs of underpricing and 3) the result of market prices.
Although the precise profile of parkers depends on the neighborhood and time measured, we know wealthier families own more cars and drive them more often, and low-income households have limited access to cars or sometimes none at all.
According to a government study, nationally roughly 20% of the lowest income households have no car, and that figure is likely much higher for Washington, D.C., where overall 37% of all households has no cars. Furthermore, use of the car is also strongly correlated with income: the highest income households “make about 30 percent more trips, and the average length of those trips is more than 40 percent longer than trips by those in the lowest income class.”
Higher parking prices in Washington, D.C. will have almost no impact at all on 37% of the households without any private vehicles whatsoever, a group that includes many of the city’s poorest.
Costs of of underpricing
In order to consider the true cost of on-street parking today, we must consider not simply the meter price but the costs of searching for a space. These variables are considered in an economic model created by Shoup that seeks to model the decision a driver makes between paying for off-street parking or cruising for a free or inexpensive street space. (Chapter 13, Choosing to Cruise). Without going into details, he shows that cruising for a free space can be analyzed as a rational behavior, but the costs incurred in terms of time and fuel are very real. If the curb spaces are sufficiently congested because of underpricing, the search for parking can cost cruisers significantly – up to or more than the amount of off-street commercial parking. In addition, all the cars circling for parking produces significant negative externalities like pollution and traffic. This means that even cheap meters may not actually mean cheap parking if everyone is forced to hunt for a space.
Furthermore, free spaces are made available randomly to the pool looking for parking at any one time, hardly good approach for a public policy. Scarcity also rewards those with the most time and flexibility to search for parking.
The results of market prices
A second model created by Shoup will help us examine the trade-offs between proximity and price when choosing a space. How do drivers decide what they are willing to pay for parking? While some of his assumptions could be questioned, the model demonstrates that when drivers decide how far from their destination, income is only one of the important variables. He shows how vehicles with multiple passengers, or people in a hurry regardless of income, will impact how much they are willing to pay.
Will this mean that high-income households “monopolize the best parking spaces?” Shoup thinks not: “Many factors other than income also affect the value drivers place on saving time on any particular trip. Lower-income drivers may park at the center when they are in a hurry, while higher-income drivers may park at the periphery and walk when they have plenty of time. … if wealthier drivers do park closer to their destinations they will pay more for their parking, and market-priced parking will thus introduce a progressive charge on the wealthy.”
Market pricing will raise the price paid but slash the cost of waste by encouraging turnover of parking spaces, allowing the same number of spaces to serve more people. Performance parking also has the positive side-effect of easing traffic and helping buses stay on schedule, improving the quality of the service of their riders. This result has been documented for both parking fees and congestion pricing on roads.
While the issue can’t be settled definitively without specific studies of individual neighborhoods, it seems clear the ethics aren’t as clear as we might initially think, and the public as a whole has much to gain from improved management of public parking spaces. Beyond the narrow calculus of economic equity, Shoup believes higher parking prices in neighborhoods will speed re-use of vacant building, stimulate depressed urban neighborhoods, and even re-orient planning towards the needs of neighborhood residents:
The revenue from curb parking will refocus planners’ attention on streets and neighborhoods. Because neighborhoods will have real money to spend and real choices to make, the residents’ preferences will acquire new weight and real community participation will be necessary. Concentrating planners’ attention on the task of improving older neighborhoods may well be one of the new parking paradigm’s most important benefits.(Shoup, 585)
If increased parking revenue captured at the neighborhood level has this effect even at a small level, it seems like a policy that could benefit all residents, regardless of income.