Parking Pricing
Direct Charges for Using Parking Facilities
~~~~~~~~~~~~~~
Victoria Transport Policy Institute
~~~~~~~~~~~~~~~~~~~~
Updated
22 July 2008
This chapter discusses ways
of charging users directly for parking facilities and services, and the impacts
this has on vehicle travel. Parking pricing provides revenue and cost recovery,
encourages more efficient use of parking facilities, reduces parking facility
costs and land requirements, reduces vehicle traffic and encourages use of
alternative modes.
Parking Pricing means that motorists pay directly for using parking facilities. Parking Pricing may be implemented as a TDM strategy (to reduce vehicle traffic in an area), as a parking management strategy (to reduce parking problems in a particular location), to recover parking facility costs, to generate revenue for other purposes (such as a local transportation program or downtown improvement district), or for a combination of these objectives.
Below are specific Parking Pricing techniques:
· Wherever possible, charge motorists directly for using parking facilities. If parking must be subsidized, offer comparable benefits for use of other travel modes, such as Cash Out payments.
· Manage and price the most convenient parking spaces to favor priority users. Charge higher rates and use shorter pricing periods at more convenient parking spaces (such as on-street spaces, and parking near building entrances) to increase turnover and favor higher-priority uses. Prime spaces suitable for short-term use should generally be at least twice as expensive per unit of time as less-convenient spaces suitable for longer-term uses. For example, in a central business district charge 25¢ for each 15-minute period with a two-hour limit, while at the fringe charge $4 per day. The ratio between short- and long-term spaces may need occasional adjustment to optimize use.
· Use variable rates that are higher for peak locations and times. Apply performance-based parking prices, which means that prices are set so that about 15% of parking spaces are unoccupied during peak periods (Shoup, 2006). For example, charge $1 per hour for parking downtown during weekdays, $0.75 per hour for parking downtown during evenings and weekends, and $0.50 per hour for parking in other locations.
· Improve Pricing Methods to make Parking Pricing more cost effective, convenient and fair. For example, use electronic pricing systems that accommodate various payment methods and rates, and allow motorists to pay for just the amount of time they will be parked. For short-term parking change by the minute rather than by the hour, and for long-term parking charge by the hour rather than by the day or month.
· Avoid discounts for long-term parking leases (i.e., cheap monthly rates).
· Use a progressive price structure in more convenient spaces to favor short-term users. For example, charge $1.00 for the first hour, $1.50 for the second hour, and $2 for each subsequent hour.
· To increase revenues, expand when and where parking is priced rather than raising rates at existing priced facilities. This is more efficient and equitable, reduces spillover problems, and usually raises more total revenue.
· Set parking prices to equal or exceed transit fares. For example, set daily rates at least equal to two single transit fares, and monthly rates at least equal to a monthly transit pass.
· Minimize discounts for long-term parking passes. For example, set daily rates at least 6 times the hourly rates, and monthly rates at least 20 times daily rates. Even better, eliminate unlimited-use passes altogether. Instead, sell books of daily tickets, so commuters save money every day they avoid driving.
· Eliminate early-bird discounts.
· Unbundle parking, so people who rent or purchase building space can choose how much parking is included.
· Avoid excessive parking supply. Use Parking Management to encourage more efficient use of existing parking facilities and address any spillover problems that result from pricing.
· Encourage businesses to price, cash out and unbundle parking by providing rewards to those that do, legislating it, or by imposing special property taxes on unpriced parking.
· Unbundle parking from housing, so apartment and condominium residents pay only for the parking spaces they need (Location Efficient Development).
· If parking must be subsidized, use targeted discounts and exemptions, rather than offering free parking to everybody. For example, to subsidize customer parking, allow businesses to validate parking tickets or provide free parking coupons to customers. To subsidize parking for people with low incomes or disabilities, provide discounts directly to those individuals.
· Tax parking spaces, and encourage or require that this cost be passed on to users. Reform existing tax policies that favor free parking. For example, tax land devoted to parking at the same rate as land used for other development.
· Charge a tax on curbcuts comparable to potential revenue foregone had the same curb area been devoted to priced on-street parking. This would encourage property owners to minimize the number and width of curb cuts, through access management and consolidation of driveways and parking facilities, which helps improve traffic flow and create more pedestrian friendly streetscapes.
· Price on-street parking in residential neighborhoods. Create Parking Benefit Districts, with revenues used to benefit local communities (Shoup, 1995).
· Allow motorists to lease on-street parking spaces (Solomon, 1995). For example, let residents and businesses lease the parking spaces in front of their homes or shops, which they could use themselves, reserve for their visitors and customers, or rent to other motorists.
· Use TDM Marketing and other information resources to provide information on parking prices and availability, and on alternative travel options.
· Develop and utilize Transportation Management Associations to provide parking management, user information and brokerage services in a particular area.
· Use parking pricing revenues to Fund Transportation Programs.
· Provide free or discounted parking to Rideshare vehicles.
Parking Pricing represents a significant change from current
practices. Most vehicle parking is provided free or significantly subsidized.
Of the 95% of
Parking Pricing can provide significant revenue. Parking facilities represent 5-15% of the annualized cost of a typical building, so charging motorists directly for using parking rather than incorporating parking facility costs into building rents and mortgages could increase property revenues or reduce building rental charges by nearly this amount (additional revenues minus any costs associated with collecting fees). Although a 10% increase in building rents may seem modest, this is equivalent to normal return on investments, indicating that recovering parking costs directly from users could double profits on typical building investments. Similarly, charging for public-owned parking facilities can provide significant revenue to governments. Shoup (2002) estimates that charging market-rate prices for curb parking could yield more revenue than total property taxes in many neighborhoods.
Given a choice, motorists usually prefer unpriced parking. But unpriced parking is not really free, consumers ultimately bear parking costs through higher taxes and retail prices, and reduced wages and benefits. The choice is actually between paying for parking directly or indirectly. Paying directly for parking is more equitable and efficient (Market Principles). There are an estimated 2 off-street and 1-2 on-street parking spaces per vehicle in the U.S., with total annualized value of $1,500 or greater per vehicle (Litman, 2000). This averages 12¢ or more per vehicle-mile, about equal to average vehicle operating costs (Transportation Costs). In other words, charging motorists directly for all parking would approximately double the perceived cost of driving.
This underpricing results in inefficient use of parking facilities and excessive parking demand. In particular, the most convenient parking spaces (such as on-street spaces in commercial areas) are often filled, while less convenient spaces (such as commercial fringe area parking, and in parking lots behind buildings) are often unoccupied. This reduces motorist convenience and increases traffic problems that can be reduced with more efficient pricing (Arnott and Rowse, 2007). Surveys indicate that 8-74% of urban traffic congestion is caused by vehicles cruising for on-street parking, and motorists spend an average of 3.5 to 13.9 minutes finding a curb parking space, both indications of inefficiency due to underpricing (Shoup, 2004).
Much of the resistance to Parking Pricing reflects the inconvenience of current payment methods, and obstacles to using alternatives. Parking Pricing can become more accepted if:
· Better Pricing
Methods are used that make pricing more convenient and fair.
· Transportation and Parking Management strategies are used to improve
consumers’ Transportation Choices.
· Marketing
provided better information on parking prices and availability, and
transportation alternatives.
Parking price changes are usually implemented by local governments or individual businesses, either as part of a TDM program or for revenue generation. Off-street Parking Pricing is often managed by specialized companies that serve many property owners.
Implementation depends on the objectives. As a Parking Management strategy, prices for the most convenient parking spaces (such as on-street spaces in commercial areas) should encourage turnover, with lower prices or unpriced parking at other locations. As a Congestion Pricing strategy, to address local traffic and parking problems, rates should be higher during peak periods, and the rate structure should be applied consistently throughout the area (such as a commercial center). As a regional TDM strategy, to reduce congestion problems and pollution emission, pricing should be applied throughout a region to avoid simply shifting travel from one location to another, and coordinated with other TDM strategies that encourage use of alternative modes. If implemented for revenue generation, parking prices should be set as high as the market will bear, and competition (such as nearby free parking) should be minimized.
To implement Parking Pricing it is helpful to develop an area-wide parking policy and plan that coordinates parking supply, pricing and management, and addresses spillover parking problems (TDM Planning). Parking Pricing can encouraged by reducing parking supply, for example, by reducing minimum parking requirements for new development, so businesses find pricing cost effective (New Urbanism).
Table 1 summarizes parking Pricing Methods. Newer methods tend to be more cost-effective, convenient and fair. They allow various payment options (coins, bills, prepaid value cards and credit cards), and more adjustable prices. Some systems allow motorists to pay for just the amount of time they are parked, rather than requiring users to prepay for a block of time.
Table 1 Summary of Parking Pricing Methods (Pricing Methods)
|
Type |
Description |
Equipment Costs |
Operating Costs |
User Convenience |
Price Adjustability |
|
Pass |
Parkers purchase and display a pass. Common for leased parking. |
Very low |
Medium |
Medium |
Poor to medium. |
|
Single-Space Meters |
Parkers prepay a mechanical or electronic meter located at each space. |
High |
High |
Low to medium. |
Mechanical meters: poor; electronic meters: good. |
|
Pay Box |
Parkers prepay into a box with a slot for each space. |
Low |
Medium |
Low |
Poor to medium. |
|
Pay-And-Display Meters |
Parkers prepay a meter, which prints a ticket that is displayed in their vehicle window. |
Medium |
Medium |
Medium |
Mechanical meters: poor; electronic meters: good. |
|
Electronic Pay-Per-Space |
Parkers prepay an electronic meter. |
Medium |
Medium |
Medium |
Very good. |
|
In-Vehicle Meter |
Parkers prepay to use a small electronic meter displayed in the vehicle when it is parked, that counts down minutes. |
Medium |
Low |
High |
Moderate |
|
Attendant |
Parkers pay an attendant when entering or leaving a parking space. |
High |
High |
High |
Good |
|
Automated Controlled Access System |
Parkers pay a machine when entering or leaving a parking space. |
High |
Moderate |
Moderate |
Good |
|
Valet |
Parkers pay an attendant who parks their car. |
Low |
High |
High |
Good |
|
Automatic Vehicle Identification |
System automatically records vehicles entering and leaving a parking area and can bill for use. |
High |
Medium |
High |
Good |
This table summarizes various methods that can be used to collect parking fees.
Several factors should be considered when setting parking rates.
Parking prices can be set to achieve transportation and parking management objectives:
·
Price the most convenient parking spaces for customers and clients,
with minute or hourly rates.
·
Use time variable rates (higher prices during peak periods and lower
prices at off-peak times).
·
Price less convenient parking spaces for employees and residents, with
weekly or monthly rates.
·
Use Parking Pricing to encourage mode shifting. Integrate Parking
Pricing with other TDM strategies that support transportation alternatives.
Prices can be set to recover parking facility costs. For example, a business or government may want to price parking to recover costs, without making a profit. Table 2 indicates typical base costs of providing parking facilities (i.e., wholesale costs). Full cost recovery must account for load factors (not all parking spaces are rented each day), and return on investment (borrowing and risk costs).
Table 2 Typical
Parking Facility Costs (Parking
Evaluation)
|
Type of Facility |
Land Costs |
Land Costs |
Construction Costs |
O & M Costs |
Total Cost |
Monthly Cost |
|
|
Per |
Per Space |
Per Space |
Annual,
Per Space |
Annual,
Per Space |
Per Space |
|
Suburban, Surface, Free Land |
$0 |
$0 |
$1,500 |
$100 |
$242 |
$20 |
|
Suburban, Surface |
$50,000 |
$455 |
$1,500 |
$100 |
$284 |
$24 |
|
Suburban, 2-Level Structure |
$50,000 |
$227 |
$6,000 |
$200 |
$788 |
$66 |
|
Urban, Surface |
$250,000 |
$2,083 |
$2,000 |
$150 |
$535 |
$45 |
|
Urban, 3-Level Structure |
$250,000 |
$694 |
$8,000 |
$250 |
$1,071 |
$89 |
|
Urban, Underground |
$250,000 |
$0 |
$20,000 |
$350 |
$2,238 |
$186 |
|
CBD, Surface |
$1,000,000 |
$7,692 |
$2,500 |
$200 |
$1,162 |
$97 |
|
CBD, 4-Level Structure |
$1,000,000 |
$1,923 |
$10,000 |
$300 |
$1,425 |
$119 |
|
CBD, Underground |
$1,000,000 |
$0 |
$22,000 |
$400 |
$2,288 |
$191 |
This table illustrates the financial costs of providing parking facilities under various conditions. (CBD = Central Business District)
Table 3 indicates typical cost recovery parking prices. This includes costs for facilities construction, operations and pricing, assuming a 70-90% load factor (portion of parking spaces that are rented during any month).
Table 3 Typical Cost Recovery Parking Prices
(Parking
Cost Spreadsheet)
|
Parking Facility |
Payment System |
Annualized Costs |
Monthly Rate |
Daily Rate |
|
Surface, Free Land |
Pass |
$300 |
$35 |
$1.75 |
|
Suburban, 2-Level Structure |
Pay-and-Display |
$800 |
$115 |
$5.75 |
|
Urban, Surface |
Pay-and-Display |
$725 |
$75 |
$3.75 |
|
Urban, 3-Level Structure |
Pay-and-Display |
$1,285 |
$135 |
$6.70 |
|
CBD, 4-Level Structure |
Attendant |
$1,600 |
$150 |
$ 6.50 |
This table shows the rate needed to recover parking facility costs under various conditions.
Prices can be set to maximize revenue, which is the approach used for most commercial parking. This means setting the highest rates that the market will bear. Rates at other nearby parking facilities set the upper limit that a particular parking facility owner may charge without losing customers.
Table 4 Typical
|
|
Hourly Rate |
Daily Rate |
Monthly Rate |
|
Suburban |
Free |
$2 |
$25 |
|
Urban or Small CBD |
$1.00 |
$5 |
$60 |
|
Large CBD |
$1.50 |
$10 |
$100 |
Table 4 summarizes typical parking rates by geographic conditions,
although these may vary significantly from one location to another (Colliers,
2005). Table 5 shows typical parking prices in major
Table 5 Average Parking Rates in
|
|
Meter (hour) |
Hourly |
Daily |
Early Bird Max |
|
|
$0.75 |
$3.00 |
$7.00 |
$3-4.00 |
|
|
$1.00 |
$6.00 |
$17.00 |
$12.00 |
|
|
$1.00 |
$7.00 |
$22.00 |
N/A |
|
|
$1.00 |
$3.50 |
$6.50 |
N/A |
|
LA |
$1.50 |
$6.00 |
$20.00 |
$9.00 |
|
|
$1.00 |
$10.00 |
$25.00 |
$18.50 |
|
|
$0.60 |
$1.50 |
$12.00 |
$5.00 |
|
|
$1.00 |
$4.50 |
$18.00 |
$8.00 |
|
|
$1.00 |
$6.00 |
$30.00 |
NA |
|
|
$1.00 |
$5.00 |
$13.00 |
$8.00 |
In practice, prices often reflect some combination of these methods. For example, prices may be set to match those of competitors, if there are any nearby, otherwise based on cost recovery. Prices may be higher at peak periods to support TDM objectives, but set at revenue-maximizing levels during off-peak periods.
Fines for parking violations must be high enough and enforced frequently enough to motivate motorists to follow regulations and pay fees, but not so high to be considered excessive or unfair. If fines are too low, some motorists may simply treat them as a parking fee. Fines are typically 2-5 times the downtown daily parking rate.
It is important to have a system to collect outstanding parking fines. This may include use of a boot (a clamp that immobilizes a vehicle) or towing of vehicles that have more than 10 unpaid fines, a restriction on renewing vehicle or drivers licenses if parking fines are outstanding, or use of collection agencies.
Parking Pricing can have significant transportation impacts (Transport Elasticities). Even modest parking fees can affect vehicle travel patterns. The price elasticity of vehicle travel with respect to parking price ranges from –0.1 to –0.3 (a 10% increase in parking charges reduces vehicle trips by 1-3%), depending on demographic, geographic, travel choice and trip characteristics (Vaca and Kuzmyak, 2005). Pricing that applies to commuter parking tends to be particularly effective at reducing peak-period travel.
Shifting from free to cost-recovery parking (prices that reflect the full cost of providing parking facilities) typically reduces automobile commuting by 10-30%, particularly if implemented with improved Transportation Choices and other complementary TDM strategies (Comsis Corp., 1993; Hess, 2001). However, pricing parking in just one area may simply shift vehicle trips to other locations with little reduction in overall vehicle travel (Hensher and King, 2001). About 35% of drive-alone commuters would likely switch modes in response to $20 per month parking fees, even if offset by a transportation voucher (Kuppam, Pendyala and Gollakoti, 1999).
Table 5 Parking Pricing Impacts on Commute Trips
|
|
Canadian Study |
|
||||
|
|
Before |
After |
Change |
Before |
After |
Change |
|
Drive Alone |
35% |
28% |
-20% |
55% |
30% |
-27% |
|
Carpool |
11% |
10% |
+9% |
13% |
45% |
+246% |
|
Transit |
42% |
49% |
+17% |
29% |
22% |
-24% |
|
Other |
12% |
13% |
-8% |
3% |
3% |
0% |
(Feeney, 1989, cited in
Pratt, 1999)
A study by ICF (1997) indicates that a $1.37 to $2.73 increase in parking fees reduces auto commuting 12-39%, and if matched with transit and rideshare subsidies, reduces total auto trips by 19-31%. A survey of automobile commuters found that nearly 35% would consider shifting to another mode if they were required to pay for parking, with fees of $1-3 per day in suburban locations and $3-8 per day in urban locations (Kuppam, Pendyala and Gollakoti, 1998). The table below shows the typical reduction in automobile commute trips that result from Parking Pricing. See Trip Reduction Tables for more information on the automobile commute reductions that typically result from parking fees and other financial incentives.
Table 6 Percent Vehicle Trips Reduced by Daily Parking Fees
|
Worksite Setting |
$1 |
$2 |
$3 |
$4 |
|
Low density suburb |
6.5% |
15.1% |
25.3% |
36.1% |
|
Activity center |
12.3% |
25.1% |
37.0% |
46.8% |
|
Regional CBD/Corridor |
17.5% |
31.8% |
42.6% |
50.0% |
From
Comsis Corporation, 1993. Fees in 1993 U.S. dollars.
One study estimates that Parking Pricing for work trips can
reduce regional VMT up to 4.0%, and that Parking Pricing for non-work trips
could reduce regional VMT by another 4.2% (Apogee, 1994). Deakin and Harvey
(1997) model the effect of minimum employee parking charges in four major urban
regions in
Table 7 Impacts
of Employee Parking Fees - Year 2010 (Harvey and Deakin, 1997, Table B.7, in 1991 U.S.
dollars)
|
Region |
Price |
VMT |
Trips |
Delay |
Fuel |
ROG |
Revenue |
|
|
$1.00 |
-0.8% |
-0.9% |
-2.7% |
-1.0% |
-0.8% |
$473 |
|
Bay Area |
$3.00 |
-2.1% |
-2.4% |
-7.0% |
-2.4% |
-2.3% |
$1,399 |
|
|
$1.00 |
-1.0% |
-1.1% |
-2.5% |
-1.1% |
-1.1% |
$142 |
|
|
$3.00 |
-2.6% |
-2.8% |
-6.5% |
-2.7% |
-2.8% |
$419 |
|
|
$1.00 |
-0.9% |
-1.0% |
-2.5% |
-1.0% |
-0.9% |
$271 |
|
|
$3.00 |
-2.4% |
-2.6% |
-7.0% |
-2.5% |
-2.5% |
$800 |
|
|
$1.00 |
-0.9% |
-1.1% |
-2.9% |
-1.1% |
-1.0% |
$1,408 |
|
|
$3.00 |
-2.5% |
-2.8% |
-8.5% |
-2.7% |
-2.6% |
$4,151 |
Price = minimum daily parking
fee for SOV commuters. VMT = change in total vehicle mileage. Trips = change in total vehicle
trips. Delay = change in congestion delay. Fuel = change in fuel consumption.
ROG = a criteria air pollutant. Revenue = annual revenue in millions of 1991
dollars. See original report for additional notes.
Parking restrictions and pricing can reduce business activity in an area and shift travel to more suburban locations (Shiftana, 1999), although these impacts depend on specific conditions, including how prices are structured, and the quality of travel and location alternatives. When parking revenues are used to improve business district street conditions or to fund transportation alternatives they can increase business activity in a downtown (Kolozsvari and Donald Shoup, 2003).
How prices are structured affects travel behavior. Significant discounts for long-term parkers (e.g., lower-priced monthly leases) encourage use by commuters, while parking prices and management strategies that discount short-term parking (e.g., “First-Hour-Free” rates) favor shoppers and business trips.
In addition to these direct travel impacts, over the long term Parking Pricing and other Parking Management strategies can help create more Accessible land use and improve Transportation Choices, as discussed in the chapters on Land Use Impacts and New Urbanism.
Table 8 Travel Impact Summary
|
Travel
Impact |
Rating |
Comments |
|
Reduces total traffic. |
3 |
Reduces automobile travel. |
|
Reduces peak period
traffic. |
3 |
Commuter Parking Pricing is
particularly effective at reducing peak period traffic. |
|
Shifts peak to off-peak
periods. |
1 |
Variable rates can
encourage time shifts. |
|
Shifts automobile travel to
alternative modes. |
3 |
|
|
Improves access, reduces
the need for travel. |
2 |
Allows higher-density
development. |
|
Increased ridesharing. |
3 |
|
|
Increased public transit. |
3 |
|
|
Increased cycling. |
3 |
|
|
Increased walking. |
3 |
|
|
Increased Telework. |
3 |
|
|
Reduced freight traffic. |
1 |
Impacts on freight traffic
tend to be minor. |
Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.
Charging motorists directly for parking provides a variety of benefits and imposes several types of costs, as listed below. See Parking Evaluation for more discussion of these impacts.
Parking
Pricing can result in more efficient use of parking facilities, address
specific parking problems, insure that parking is available for intended users,
and reduce total parking requirements, providing substantial facility cost
savings.
Parking
Pricing is one of the most effective ways to reduce motor vehicle traffic. It
typically reduces automobile trips by 10-30%, or even more if implemented as
part of a comprehensive TDM program. This helps reduce congestion and
environmental impacts, and increase road safety.
Parking
Pricing allows supports land use management objectives related to Smart Growth, Location Efficient
Development, New Urbanism and Access
Management. Parking Management can reduce urban sprawl and the environmental
impacts that result.
Parking
Pricing creates revenues (an economic transfer that is offset by user costs)
that can be used to recover parking facility costs and fund other programs.
Unpriced
parking represents a cross-subsidy from people who own fewer than average
vehicles and drive less than average, to people who own more than average
vehicles and drive more than average. This is unfair. Charging motorists
directly for parking tends to increase horizontal equity, and can increase
vertical equity, depending on how revenues are used (see discussion below).
Parking Pricing costs include:
Pricing
costs including costs for equipment (signs, parking meters, ticket printers,
access gates), attendants, land (such as sidewalk space used by parking meters)
and administration. These incremental costs range from less than $50 annually
per vehicle for a pass system with minimal enforcement, to more than $500 per
space for attendants or an automated control system (Pricing
Methods).
Parking
Pricing can impose delay and inconvenience to motorists, who are often required
to prepay using specific coins or denominations, although newer parking payment
technologies can reduce these costs.
Parking
Pricing represents a cost to motorists, which is an economic transfer that is
offset by revenues to facility owners.
Parking
Pricing in just one area may cause spillover impacts in other areas. Parking
Pricing may cause motorists to cruise around in search of cheaper parking,
although the opposite effect may also occur if Parking Pricing increases
parking availability, reducing the need for motorists to cruise for a parking
space.
Free
parking is considered an effective way to attract customers and reward
employees. Priced parking can put businesses and commercial areas at a
competitive disadvantage if other businesses or areas have abundant, unpriced
parking.
Table 9 Benefit Summary
|
Objective |
Rating |
Comments |
|
Congestion Reduction |
3 |
Reduces vehicle travel. |
|
Road & Parking Savings |
3 |
Reduces vehicle travel and
parking requirements. |
|
Consumer Savings |
-1 |
Increases direct costs, but
reduces indirect costs. Overall impacts depend on how revenues are used. |
|
Transport Choice |
0 |
Mixed. Reduces driving
affordability, encourages alternative modes. |
|
Road Safety |
2 |
Reduces vehicle travel. |
|
Environmental Protection |
2 |
Reduces vehicle travel. |
|
Efficient Land Use |
2 |
Reduces vehicle travel. |
|
Community Livability |
2 |
Reduces vehicle travel and
can reduce the amount of land devoted to parking facilities. |
Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.
Parking Pricing has mixed Equity impacts. Charging motorists directly for the parking they use is fairer (increases horizontal equity) than indirect payment that results in cross-subsidies from consumers who own drive less to those who drive more than average. Parking Pricing can be considered unfair if applied selectively, imposing costs on lower-status employees working in commercial centers, but not on higher-status employees or those at suburban worksites.
Parking charges are regressive (they represent a greater share of income for less-wealthy motorists), but not necessarily more regressive than alternative sources of paying for parking facilities, such as general taxes. Since automobile ownership and use tend to increase with income, higher-income people tend to capture the majority of parking subsidies. Using parking revenue to reduce general taxes or improve travel alternatives can benefit lower-income people overall. Unbundling parking from housing can increase housing affordability and benefit lower-income households (Location Efficient Development).
Parking Pricing encourages the use of alternative modes, and helps create more accessible and pedestrian-friendly land use patterns, which tends to benefit people who are transportation disadvantaged. It can improve basic access by guaranteeing that more parking spaces are available for high-value trips, when users are willing to pay.
Table 10 Equity Summary
|
Criteria |
Rating |
Comments |
|
Treats everybody equally. |
-2 |
Parking Pricing is often
applied selectively. |
|
Individuals bear the costs
they impose. |
3 |
Reduces subsidies to
driving. |
|
Progressive with respect to
income. |
-1 |
Charges are regressive, but
not necessarily more regressive than other funding sources. |
|
Benefits transportation
disadvantaged. |
3 |
Reduces parking costs borne
by non-drivers. Encourages development of alternative modes and more
efficient land use. |
|
Improves basic mobility. |
2 |
Makes parking available for
higher-value trips. |
Rating from 3 (very
beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.
Parking Pricing is most common in major commercial and recreational centers, and large cities. It is particularly appropriate where:
·
Land values and parking facility costs are high.
·
Parking supply is insufficient to meet demand.
·
Traffic congestion or vehicle pollution are significant problems.
·
Clustered land use, infill development and reduced pavement area is
desirable.
·
Administrative and enforcement resources exist.
Table 11 Application Summary
|
Geographic |
Rating |
Organization |
Rating |
|
Large urban region. |
2 |
Federal government. |
1 |
|
High-density, urban. |
3 |
State/provincial
government. |
2 |
|
Medium-density,
urban/suburban. |
2 |
Regional government. |
3 |
|
Town. |
2 |
Municipal/local government. |
3 |
|
Low-density, rural. |
1 |
Business Associations/TMA. |
3 |
|
Commercial center. |
3 |
Individual business. |
3 |
|
Residential neighborhood. |
2 |
Developer. |
3 |
|
Resort/recreation area. |
3 |
Neighborhood association. |
2 |
|
|
|
Campus. |
3 |
Ratings range from 0 (not
appropriate) to 3 (very appropriate).
Incentive to Reduce Driving
Parking Pricing supports and is supported by most TDM strategies. It is one Parking Solution and Parking Management strategy. It is helpful to consider different Pricing Methods and Parking Evaluation approaches. It is an important component of Commute Trip Reduction and Campus Trip Reduction programs. It is more feasible if implemented with improvements to Transit, Ridesharing and Nonmotorized Transport. It is an important component of Smart Growth, New Urbanism and Location Efficient Development.
Parking Pricing is usually implemented by local governments or developers and businesses that own and manage parking facilities. Implementation may require support and coordination of local governments, business associations, individual businesses, neighborhood associations and individual residents. Local police may be involved in enforcement activities. Private companies often provide parking management equipment and services.
Parking Pricing implementation faces various barriers:
·
Motorists are accustomed to receiving subsidized parking, and so often
resent and oppose Parking Pricing. They see it as an additional new cost,
rather than a different way to pay for a service they use.
·
Planning professionals have well-established systems to address parking
problems by increasing parking supply through zoning requirements and public
subsidies.
·
Current minimum parking standards are generous. They reflect demand in
suburban areas with unpriced parking, and are therefore excessive for urban
areas, where parking is priced, or where TDM programs are implemented (Shoup,
1999). This reduces potential parking prices to the point that collecting the
fees is not cost effective.
·
Individual businesses and commercial districts use free parking to
attract customers and reward employees.
·
Abundant parking supply causes businesses to consider parking
facilities a “sunk” cost, with little marginal value. Unless a business can
sell or lease excess parking capacity, they may perceive little financial
benefit from encouraging their employees and customers to reduce their parking
demand.
·
Income, sales and property tax policies favor unpriced parking. A
typical employee would need to earn about $2,000 in additional pre-tax annual
income to pay for a parking space that costs an employer about $1,000 a year to
provide. As a result, businesses and labor organizations consider parking to be
an attractive employee benefit.
Businesses often resist Parking Pricing because they believe it puts them at a competitive disadvantage with other businesses that offer abundant, free parking. However, businesses ultimately bear the costs of free parking, which they must pass on to customers, and providing free parking can constrain business decisions. For example, the need to provide abundant free parking may prevent a business from expanding its building or limit location decisions. Providing free employee parking can reduce the availability of customer parking. Parking Pricing and other Parking Management strategies can be more profitable to businesses and support economic development better than current practices based on abundant, free parking. Real estate market analysis suggests that traditional urban areas, where parking is limited and priced, often experience greater economic growth than suburban areas (LLREI, 2000). This suggests that Parking Pricing is not necessarily harmful to local economic development if an area is attractive and accessible in other ways.
KT Analytics (1995), Shaw (1997), Pratt (1999),
· Prices should be well
publicized and predicable. Use signs, maps, brochures, websites and other
resources to provide information to users.
· Payment systems should be
convenient. They should accept coins, bills and credit cards, and allow
motorists to pay for just the amount of parking they will use (rather than
requiring prepayment based on expected parking duration).
· Prices for the most
convenient parking spaces should be higher and should have smaller time
increments than for less convenient parking spaces.
· Rates should be higher
during peak periods and lower during off-peak periods. Parking should be rented
by the hour or day, with no (or minimal) discounts for long-term leases.
· Parking fees should be
coordinated throughout a district or region, so that comparable areas have
comparable fees.
· Management programs should
anticipate potential spillover problems, and respond with appropriate
regulations and enforcement.
· Parking violation
enforcement should be predicable and courteous, and adequate to maintain a high
level of compliance.
Shoup (2005) provides the following guidelines for efficient parking pricing:
|
The
other day I saw two dogs walk up to a parking meter. One says to the other,
“What do you know, paid toilets!” |
Comsis (1993), ICF (1997), and K.T. Analytics (1995) describe various Parking Pricing programs implemented as part of TDM programs.
The
To accomplish the goal of managing the supply of parking and to make it reasonably available when and where needed, a target occupancy rate of eighty-five percent (85%) is hereby established.
At least annually and not more frequently than quarterly, the Parking Manager shall survey the average occupancy for each parking area in the Downtown Meter Zone that has parking meters. Based on the survey results, the Parking Manager shall adjust the rates up or down in twenty-five cent ($0.25) intervals to seek to achieve the target occupancy rate.
Revenues generated from on-street and off-street parking within the Downtown Meter Zone boundaries shall be accounted for separately from other City funds and may be used only for the following purposes:
A.
All expenses of administration of the parking program
B.
All expenses of installation, operation and control of parking equipment and
facilities within or designed to serve the Downtown Core Meter Zone
C.
All expenses for the control of traffic (including pedestrian and vehicle
safety, comfort and convenience) which may affect or be affected by the parking
of vehicles in the Downtown Core Meter Zone, including the enforcement of
traffic regulations as to such traffic.
D.
Such other expenditures within or for the benefit of the Downtown Core Meter
Zones the City Council may, by resolution, determine to be legal and
appropriate.
During
the 1950-70s Old Pasadena’s downtown had become run down, with many derelict
and abandoned buildings and few customers, in part due to the limited amount of
parking available to customers. Although curb parking had two-hour limits, this
was poorly enforced. Many employees simply parked in the most convenient curb
spaces and moved their vehicles a few times each day. The city proposed pricing
on-street parking as a way to improve parking for customers. Many local
merchants originally opposed the idea. As a compromise, city officials agreed
to dedicate all revenues to public improvements that make the downtown more
attractive. A Parking Meter Zone (PMZ) was established within which parking was
priced and revenues were invested.
With
this proviso, the merchants supported the proposal. They began to see parking
meters as a way to fund the projects and services that directly benefit their
customers and businesses. Because downtown parking had previously been
unpriced, the city didn’t lose any funding by dedicating the revenue to
improvements in that area. In fact, the city gained revenue from overtime
fines.
The
city formed a PMZ advisory board consisting of business and property owners to
recommend parking policies and revenue distribution. The resulting investments
included new street furniture and landscaping, more police patrols, street
lighting, more street and sidewalk cleaning, pedestrian facility improvements
and marketing, such as area maps showing local attractions and parking options.
To highlight these benefits to motorists, each parking meter has a small
sticker which reads, “Your Meter Money Will Make A Difference: Signage,
Lighting, Benches, Paving”
This
created a “virtuous cycle” in which parking revenue funded community
improvements that attracted more visitors, which increased parking revenue,
allowing further improvements. This resulted in extensive redevelopment of
buildings, new businesses and residential development. Parking is no longer a
problem for customers, who can almost always find a convenient space. Local
business activity and sales tax revenues have increased far faster than in
other shopping districts with lower parking rates, and nearby malls that offer
free customer parking. This indicates that charging market rates for parking
with revenues dedicated to local improvements can be an effective ways to
support urban redevelopment.
The
city of
|
Meters a Timely Move Times
Colonist
Newspaper Editorial, If
Victoria Mayor Alan Lowe is remembered years after he has left office, it
will likely be for two things: new arena (assuming it happens, and he is
doing everything he can do insure it does) and bringing some sanity to the
parking situation downtown. That
sanity comes in the form of the new 90-minute meters – for some reason an
hour is never quite enough for many shoppers, and it only takes one $15
ticket to sour many on downtown shopping. The
new meters also offer a five-minute “grace” period (another source of fury is
getting back to the meter just as the commissionaire is leaving the ticket),
have the ability to use a “smart” card to pay (so you don’t need to worry about
having small change) and – you actually get change back on your smart card if
you understay the time. Almost
no other issue is as important to the city of The
downtown will suffer if people can’t find a place to park on the street, so
some kind of meter system is necessary to keep cars moving. But downtown will
also suffer if visitors feel pressured and harassed by the parking police. The
90-minute meter is a very reasonable middle ground: an hour and a half should
be more than enough time to shop or have a meal without rushing – and there
are always the reasonably priced city parkades for longer stays, and on some
days they will even be free. For
some reason, |
The Dutch Coordinated National Car Parking Policy (CROW, 1994) has been successful in reducing automobile parking subsidies by encouraging more accessible development and reducing the tendency of businesses and local governments to provide free parking.
In early 2002 the City of
To use this system:
1. User goes to the pay station.
2. Pays by coin, credit, debit or smart cards.
3. Takes the sticker receipt back to their car and places on the dashboard.
The city originally planned to phase these meters in over five years, but has accellerated this to three years due to srtong public acceptance and and cost efficiency. In 2002 about 150 stations were in place, in 2003 another 885 were added and now about 1,130 stations are in place. Each serves an average of 6.7 parking spaces. Over 55% of parking transactions are with credit or debit cards and about 1% with smart cards. This is particularly beneficial for longer-term users, who would have needed almost half a roll of quarters to pay for parking. The sidewalk space created by removal of parking meter posts has been favorably received by streetside business (cafes and bistros) as about 2-3 feet of sidewalk space was reclaimed.
The city devoted considerable attention to developing the station’s two-way communication system, which allows individual stations to report when they are nearly full or need maintenance. The stations typically jam about once a year, compared with about 4 times per year for coin meters. Automated recording systems imporve revenue management and security. Enforcement staff efficiency has increase with imporved system managmeent based on electonic hand-held ticket writing devices, similar to a PDA. These efficiency gains have increased net revenue, from about $7.5 million in 2001/02 to about $9.7 million in 2004/05.
|
How the politics of parking can defile a city Tim Falconer, The Star, May 11, 2008; at www.thestar.com/printArticle/424158.
Tolls may be an idea that some people and
some cities are finally willing to debate, but free parking remains the blind
spot in urban and transportation planning. I'd heard various estimates (four,
eight, 13) for the number of parking spots per car in But the typical driver has a parking spot at
home and one at work (usually bigger than the cubicle he or she spends all
day in) as well as shared spots at malls, stores, restaurants and even
churches. We're so accustomed to abundant free parking
that we resist paying for it, hate looking for it and, most of all, dread
getting tickets. As Donald Shoup, Born in He'd offered to arrange "free (or rather
fully subsidized) parking" for me, but I wanted to take the bus in order
to experience public transit in Shoup isn't sure what the ratio of parking
spots to cars is – he suspects it's at least three or four to one, probably
more – but he knows it's too high. He's also convinced that free parking not
only encourages people to drive, it's actually expensive because subsidizing
it costs the economy more than the Turning to his computer, he showed me aerial
photos of several cities to demonstrate how much land we waste just to give
drivers a place to leave their wheels. "Parking is the single-biggest
land use in almost any city and almost everybody has ignored it," he told
me. "It's like dark matter in the universe: We know there's something
there, and it seems to weigh a lot, but we don't know what it is. If only we
could get our hands on it." While he was at his computer, he also gave me
a virtual tour of the Old Town Pasadena neighbourhood, with before and after
photos that showed how it had gone from skid row to upscale destination. ONE OF HIS IDEAS was instrumental in that transformation. The city faced a common
problem: Parking was free, but the few merchants who were still in business
complained that it was inadequate. The people who worked in the stores took
most of the spots, leaving customers to drive around searching for one – or
just staying away. Meanwhile, the city had a vision of a revitalized downtown
but no money to repair sidewalks, plant trees, increase security or take any
of the other steps necessary to attract people. Shoup recommended charging enough for parking
to maintain an 85 per cent occupancy rate and using the money shoppers
dropped in the meters to improve the neighbourhood. The revenue couldn't go
into the city's general coffers; it had to be spent on the streets. Once that happened, the business community
started to invest, too – even sandblasting and renovating derelict buildings
– and soon the shop owners, who had initially opposed meters, wanted to
charge for parking until midnight. They wanted the money for the
improvements, but they also discovered that their fears about scaring away
customers were unfounded – anyone who really wanted to shop or eat in the
area was willing to invest a few quarters. As the area became more popular, the meters
raised more money for more improvements, which increased the popularity. And
so on. The city now collects one million dollars a year to pay for upkeep
that includes sweeping the sidewalks nightly and steam-cleaning them twice a
month. In Calvin Trillin's Tepper Isn't Going Out,
a slight but charming novel about a man who becomes a A city should adjust the rate every quarter
to ensure the 15 per cent vacancy rate, always letting the market decide the
price. "Nobody can tell you what the right price of gold is, or the
right price of wheat or apples," he argued. "It just happens." Free off-street parking isn't something that
just happens, though, because planning departments always insist that
developers include a minimum number of parking spots. Shoup doesn't have much
respect for the ability of urban planners to determine how many spots are
necessary. Since planners don't learn anything about parking in school, they
learn it on the job, but because parking is so political – NIMBY neighbours
constantly squawk at the thought of anyone parking on their street – what
they really learn is the politics of parking. "Planning will be looked back on as worse
than phrenology, because phrenology didn't do any harm," he said,
referring to the nineteenth-century pseudoscience that claimed to be able to
determine character and other traits from the size and shape of a cranium. The harm abundant free parking does feeds on
itself: All that land dedicated to parking, which often sits empty for much
of the day, increases sprawl, and that sprawl makes alternatives such as
public transit and walking less feasible, which forces more people into cars,
which increases the need for more parking. Again, Shoup argued that the market should
decide: Freed from the arbitrary and capricious demands of the planners,
developers will put in the right amount of parking – enough to meet their
customers' needs, but not so much that they waste valuable space or money. When the Westfield San Francisco Centre
reopened in September 2006 after a major renovation, it was triple the size,
featured high-profile tenants such as Bloomingdale's and expected 25 million
visitors a year – all without adding any new parking. A lot of people shook
their heads at that, but the mall is close to 32 transit lines and sits
across the street from a large parking garage that was rarely anywhere close
to full. In 1992, the state of ALTHOUGH HIS ideas seem like so much common sense, Shoup still feels they're
underappreciated. Many places want to thrive the way Old Town Still, he knows some planners are curious
because he receives more invitations to speak than he can accept. Cities pay
him large lecture fees, fly him first class and then wine him and dine him,
but they don't all do what he suggests because parking is so political. "All I can do is go and say, 'You're
doing everything wrong,' " said Shoup, who rides a bike about three
kilometres to campus, puts just 5,600 kilometres a year on his Infiniti, and
admitted that he's often mistaken as an enemy of the car. He insists he's
not; it's just that people would live differently – read: drive less – if
they had to pay for parking. The good news is that all that parking space
is an accidental land reserve for housing that can bring in tax revenue even
as it helps ease traffic congestion, air pollution and energy dependence. "The nice thing is that when cities
adopt what I'm saying" – he snapped his fingers – "like that, it
works." |
Many neighborhood experience
various parking spillover problems, including difficulty finding parking for
residents and their visitors, concerns that public service vehicles cannot pass
two lanes of parked vehicles on the street, or that parking on the street
reduces neighborhood attractiveness.
These problems become an
opportunity with the establishment of a Parking
Benefit District (PBD) A PBD is created by metering the on-street parking
(either with pay stations on the periphery of the neighborhood or with the
traditional parking meters) and dedicating the revenue, less City expenses for
maintenance and enforcement, towards improvements in the neighborhood that
promote walking, cycling and transit use, such as sidewalks, curb ramps, and
bicycle lanes. In addition, to encourage drivers to consider other ways to
reach their destination without driving and parking in the neighborhood,
parking meters will inform drivers of alternative ways to reach their
destination. Charging for parking and promoting alternatives should help reduce
the number of people parking in the neighborhood, but for those that do park
and pay the meter, the neighborhood benefits. The PMD may be used in
conjunction with a Residential Permit Parking program to ensure that parking is
available for residents and their visitors.
The Parking Benefit District
pilot program is funded in part by a grant from the Mobile Source Outreach
Assistance program of the Environmental Protection Agency, which selects public
education and outreach projects that directly support local efforts to improve
air quality from mobile sources.
· CH2M Hill began charging
employees who drive alone $49 per month to park, while carpoolers parked for
free and each employee received a $40 monthly travel allowance. Solo driving
declined from 89% to 64%.
· Pacific Northwest Bell
charged employees who drive alone $60 per month to park, while offering
discounts for carpools. This resulted in only 25% of employees driving alone to
work, compared with 80% for other employers in the area.
· The City of
· The City of
· The City of
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Dept. of Environmental Quality, State of
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Todd Litman (2006a), Parking Management Best Practices, Planners Press (www.planning.org).
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Mary Marr (1999), Downtown
Parking Made Easy, Downtown Research and
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Parking Today Website (www.parkingtoday.com) has information and links to parking resources.
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Hobart Paper 33 (
Gary Roth (2004),
An Investigation Into Rational Pricing
For Curbside Parking: What Will Be The Effects Of Higher Curbside Parking
Prices In
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This
Encyclopedia is produced by the Victoria Transport Policy Institute to help
improve understanding of Transportation Demand Management. It is an ongoing
project. Please send us your comments and suggestions for improvement.
Victoria Transport Policy Institute
www.vtpi.org info@vtpi.org
Phone & Fax 250-360-1560
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