Parking isn’t free. The assumption that it has no costs or
the stipulation that it should be free ignore the fact that space is a scarce
resource. Scarce resources have value and public policy is incredibly
influential in determining how that value is allocated in the marketplace.
Minimum parking requirements distort the markets for land and transportation by
bundling the costs of parking with the costs of housing. Portland should repeal
the recent decision to set minimum parking requirements for new apartment buildings
over 30 units. In its place, the city should provide neighborhoods the option
to create a well-functioning, well-regulated local parking market through
Parking Benefit Districts. (Kolozsvari and Schoup 2003)
The concerns recently voiced by neighbors about the lack of
parking provided by an incoming 81-unit apartment building on 37th
and Division are valid. Contrary to the myth that most of the people living in these
compact urban apartments don’t own cars, a city survey found
that 72 percent do. It is hard to imagine how 60-70 new cars would not create a
negative spillover effect on the immediate neighborhood, making it more
difficult for residents and visitors to find a space and resulting in more
congestion as cars drive in circles searching.
Parking minimums, however, are not an effective solution to
the spillover effect. Parking minimums combine the cost of parking with the
cost of developing an apartment. Developers don’t just lets those costs eat
into their profits, they pass it on to tenants and inflate the costs of
housing. On average, requiring parking adds about 10% to construction costs, and
that can be significantly higher in dense urban areas that require underground
parking or multiple levels of a parking structure (VTPI 2012). This means that
developers build fewer, more expensive apartments that can sustain profits in
the face of parking minimums. A study from Oakland in the 1960’s found that
housing construction costs increased by 18% and housing density reduced by 30%
after the implementation of minimum parking requirements (Schoup 1997).
The bundling of parking with housing is not economically
efficient. Only about 5 percent of the cost of parking is borne directly by
users, which means 95 percent of the costs are indirectly paid through higher
costs of other goods (VTPI 2012). This total unpriced value of parking amounts
to up to $438 billion per year, three times what we spend on public roads. The
problem with paying for parking indirectly is that it disables us from making
rational, efficient choices about how much we want. Minimum parking
requirements operate in this “black hole” of unpriced demand: planners don’t
know how much parking is needed. Evidence of this can be found in the startling
range of requirements across cities for the same types of development. For
example, one study reviewed parking minimums for funeral parlors across 66
cities and found 27 different requirements. Spaces were to be allocated based
on square footage, number of seats, funeral vehicles, parlor area, or number of
parlors (Schoup 1997). Clearly, there is not a methodological consensus among
planners about how to allocate parking accurately.
The spillover effect of excess parking demand generated by
new apartment buildings should be addressed by setting price on on-street
parking, and that price should be responsive to market demand. New metering
technology recently implemented in San Francisco
uses sensors attached to the meters to determine how many vehicles are parked
in a given area at a given time. Administrators monitor this data and adjust
rates if demand is too high (spaces always full) or too low (many open spaces).
Rates are only changed once per month, at a maximum. As a result, the demand of
parking is optimized so at least a few spaces are always open, reducing
cruising for parking and the congestion it creates. Other combined metering
systems can use one kiosk for multiple spots, answering the aesthetic concerns
of residential areas.
Residents and business owners will have to purchase parking
permits to park on the street in the neighborhood. The number of these permits
can be limited to reflect actual street parking available in the district, and
residents can be given priority based on how long they’ve lived in the
district. In a case like the 81-unit apartment on Division, not all the new
residents would likely be able to obtain a permit, so the building would either
attract tenants that don’t own a car, or the developer would find a way to add
the right amount of parking to the building or even buy a nearby lot in order
to attract tenants that need parking.
With permits and meters in place to foster a local market
for parking, the city should setup a Parking Benefit District that ensures the
revenue from both permits and meters will be redirected back into investments
in the community. The funding can help pay for streetscape improvements, bike
parking, tree planting, or even storefront improvements. By reinvesting
revenues back into the community, current residents and business owners get to reap
the benefits of the high demand for parking in their neighborhood. As a result,
they are more likely to support permitting, metering and new growth. A Parking
Benefit District in Old Pasadena, California generated $1.2 million net revenue
(after operating expenses) that was used to improve pedestrian infrastructure and
security (Kolozsvari and Schoup 2003).
Fostering a local market for parking through permitting,
meters, and a Parking Benefit District may be more complex to administer, but
it is a far more efficient and equitable solution than required parking
minimums. As commercial districts around Portland revitalize and the city
continues to attract sustainable infill development, the challenge of matching
parking supply with demand will only grow more difficult. City commissioners
should provide a fair, well-regulated market system under which residents can
benefit from local parking revenues, visitors pay a fair price for the use of
space, and new developers and business owners can determine on their own how
much off-street parking is necessary to support their enterprise.
References
Barter,
P. A. (2010). Off-Street Parking Policy without Parking Requirements: A Need
for Market Fostering and Regulation. Transport Reviews, 30(5),
571-588.
David Evans and Associates (2012). City of Portland Parking Impacts for New TOD
Along Inner Corridors: Parking Study. City of Portland Bureau of Planning
and Sustainability. November 2012.
Kolozsvari, D., & Shoup, D. (2003). Turning
small change into big changes. Access, 23,
3-7.
SFPark (2011). SFPark Rate Adjustment Policy: On-Street Parking. San Francisco
Metro Transit Authority. 8 June 2011.
Shoup, D. C. (1997). The high cost of free
parking. Journal of Planning
Education and Research, 17(1),
3-20.
Victoria Transport Policy Institute (VTPI)
(2012). Transportation Cost and Benefit
Analysis II – Parking Costs. 22 February 2012.
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