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.
Who’s Parking?
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.
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I always make a stress-vs-proximity decision. Social pressure alters the tradeoffs. If I have people in the car, I may want to park closer. But I also don’t want to look like a pushover by paying too much for parking. If all parking (off- and on-street) costs about the same, you don’t have to worry about circling the same streets just to keep up appearances.
Kevin Drumm at Political Animal brought up something related to this. Or the idea that nothing should be done if it might, just maybe hurt the poor. As he said, the poor are always going to be hurt more. They have less money. So anything that charges fees is going to be regressive at some level. So how can you make those fees be a form of wealth distribution that benefits the poor more? He was talking about this in terms of congestion pricing in London, where the money goes back to improve transit. His post is here.
good page :)
Great discussion, Rob. I was unaware of the federal research paper.
Underpriced parking is very much an affordable housing issue too. Currently, our expectations about subsidized parking leads us to require that new development have expensive off-street parking — thus raising housing costs and potentially reducing the amount of house that can be built.
There’s a fairly extensive literature on housing & transportation affordability — see “A Heavy Load” and research by Reconnecting America and older stuff on location-efficient mortgages (STPP & CNT). these all have to do with household paying over 50% of their budget in housing & transportation, and reduced car ownership frees up income for other investments — like homeownership.
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I couldn’t disagree more on this subject.
“Free curb spaces are hard to come by during busy times, especially in commercial areas”.
In Chicago, or Manhattan, for example, free curb spaces in comercial areas/downtown, are not hard to find… they just doesn’t exist. The only thing you will find alike are the free 2 hours parking when you do some shopping.
“Because curb spaces are so much cheaper than garages, drivers continue to cruise for spaces”
Well, I don’t like to have to pay 12$ for half an hour of parking. Do you?
“In their view, the “shortage” of on-street spaces results because the spaces are under priced”.
I would say that is pretty simplistic. The problem is not price of the on-street spaces. As you say later on in your own thoughts, many families have one car per person, and I am not talking only about the wealthiest ones. May be the problem is not only the price, may be the problem is also in the demand of those on street spaces.
“As a result, drivers cause huge amounts of wasted time, fuel, and unnecessary traffic.”
Well, I would wish that they only cause that when they search for a cheap curb space. This is not the place, but in this country people just like to create traffic jams. If anyone has visited other countries, they must have realized how fluent the traffic is, even with many more cars on the roads.
“These spaces should instead be priced high enough to ensure a few empty spaces at all times”
Well, excuse me? First, that wouldn’t be anywhere close to optimum performance, it wouldn’t be in line with what “PUBLIC PARKINGS” are expected to be, and if you want a few empty spaces at all time, you can just go to those garages you mentioned in your second point.
I mean, that is your point, right? Not making public parking spaces so cheap… that is why you also have private garages, with a higher price, where you will most surely find empty spaces.
“During peak periods parking would be expensive, but at other times it would be much cheaper or even free.”
Taking into considerations that there is only peak hours and non peak hours, there should be only two fares. And that is already implemented. 25 cents per 6 minutes was the fare in the last place I parked in San Francisco.
“In my view, the equity of switching to performance parking depends on 1) who’s parking, 2) the costs of under pricing and 3) the result of market prices.”
Well, that is nice, but is that also valid for public parkings?
[Who]
“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.”
True… can we say then, that the problem in public on street parking is caused by those wealthier families that go downtown in different cars? Well, I don’t have the answer, but I am sure that would be a too simplistic approach, wouldn’t it?
“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”.
I guess you want to make a point telling us that these people doesn’t have a car, and they don’t need an on street parking. So why should we include that in the “who is parking” section? Shouldn’t we include them in the “who is never going to use the on street parkings” section?
“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.”
Now… that is a conclusion! Why don’t we rise the prices for everything that those city poorest will never use, or eat? Let’s start with the fresh vegetables and fruit, or let’s increment the medical costs or medical insurances, or the combustible for cars…
[The cost]
“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.”
Well, that is true. And it is also true for private parkings, where you should take into consideration that the total price will be reduced, since you won’t be searching for a spaces for as long as you would if you were in the street.
“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”
Let me see… last time I was parking in San Francisco, I had to choose between paying 25 cents every 6 minutes, or $3 every half an hour. That is for half an hour: $1.25 or $3, or for one full hour it would be $2.25 against $6… wow! That would be $3.75 difference! A full gallon of gas! May be we should start worrying about fuel consumption instead of on-street or off-street parkings!
[Market prices]
“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.”
Now I don’t understand exactly how paying more for the on-street space will help the line at the shop move faster, or finish that job interview sooner, or shorten the duration of the film. I don’t leave the car parked just to don’t let other people use it. I park the car, when I have to do some shopping, or because I have a job meeting out of my office, or because I have any other thing to do, not for the fun of parking the car there! So I would be interested in knowing how rising the price, will make me (and the rest of the world) do more things in less time! It would be the greatest invention ever!!!
“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”
There are many things that could be done to ease traffic, and help buses stay on schedule, and rising the prices of the on street parkings is not by far the best one. We can start by teaching how to de “performance driving” inside and outside the cities.
“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:”
Of course, I would love to have to pay to leave my car in the steet every evening, and even having to go downstairs to put more money every two hours! I am sure that will make me decide to rent a house in that neighbourhood.
Hey! I am serious: you have to see the positive side! As far as we have some parking personnel on the neighbourhood, I won’t have some “low-income-car” parked in front of my house! It’s the price I want to pay to draw a line between those that can pay for parking and those who cannot!
Do you truly think this will help the residents in any way? How much money can you get from parking meters in residential area?
“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”
As I said before, let me know how much money you can make from residential neighbourhoods, and the cost of any of those “tasks” to improve the neighbourhoods, plus the wage of the personnel required to check the parking meters. Is that the best approach to get some funds to improve the neighbourhood?
“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.”
It will surely help those families that have low income… why wouldn’t they want to pay to park their already old and fuel-hungry cars on the street?
You cannot really believe what you have written.
I can understand that you don’t mind paying a little bit extra for on-street public parking, because it’s hard to find a good spot to park, but that is the reason why we have private parkings at a more expensive fare. We can talk long about how an increment in the price will affect the way people park, and the conclusion is that it won’t affect how people will drive, or where they will park. To make a long story short, you still need a place to park, and you will pay no matter how much they ask you for (up to a “reasonable limit”, of course). But the so called in your argumentation “low income families” will also pay for it, so it won’t solve any problem.
There are some things that can be done to ease the traffic in the cities, but raising the price of the parkings is not a solution.
I have included a link to your article from my blogsite, and my small contribution is also published at my site.
Best regards.
Luis
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