Alan Durning on the “Ruinous, Vicious Circle” of Underpriced Parking

Many people have been inspired by UCLA Professor Donald Shoup’s epic takedown of American parking policy, but few have turned that newfound passion into the kind of scholarship Alan Durning has produced on the issue. The executive director of the Pacific Northwest’s sustainability think tank, Sightline Institute, has now published 12 installments in a series called “Parking? Lots!” — and there’s more coming.

Sightline Institute's Alan Durning has discovered more reasons to eliminate parking minimums than even you knew existed. Photo: ##http://www.flickr.com/photos/tedxbellevue/8091223095/in/set-72157632243318090/##Olympic Photo Group/Flickr##

Each installment examines the parking beast from a different angle — the territorial rage people feel when others park in front of their house, the conviction of some drivers that they have special parking “karma” that lets them find the best spaces — and the profound damage that overabundant parking wreaks on cities.

Durning wanted to make Shoup’s writing more accessible to a mainstream audience, capture some aspects that Shoup’s book left out, and tailor the message to a Cascadia audience. He especially hoped to capture the attention of urban planners and council members in small and mid-sized cities where the latest innovations in transportation policy might not already be implemented or even understood.

We’ve re-printed one of our favorites from the series, Apartment Blockers, an in-depth exploration of what parking minimum have to do with the fact that The Rent Is Too Damn High.

Durning and I spoke at length last week. Here are some of the many highlights of our conversation. We’ll run some more tomorrow.

Tanya Snyder: Where are the places that are really getting parking right?

Alan Durning: The city of Seattle and the city of Portland are both pretty darn good. Both have eliminated off-street minimums for multi-family buildings in much of the cities, though Portland has now back-tracked a little bit and created a very small parking minimum again. Seattle is doing a low-tech, crude version of performance pricing, which is where you vary the price of meters in order to ensure that there’s always one or two spaces on each block, and that’s supposed to eliminate cruising for parking. And that starts to approximate market pricing for parking. So, in the Northwest, those are the two leaders.

The places Donald Shoup talks about as having put it all together are part of Pasadena, California, of all places, and some places in San Diego. Some other cities are starting to do the whole package: 1) charging the right price for street parking, 2) rebating some of the meter revenue to the local neighborhoods — which is important because it creates political pressure to extend charging for parking — and 3) reducing off-street parking requirements. Redwood City, California; Austin, Texas — Mexico City is just getting started. Washington, DC, is doing some things.

The giant challenge is to create a market for parking. When there is a market for parking, that will help to diminish the supply of parking. That’s the ultimate goal.

TS: It seems like you can potentially charge a decent amount of money for parking downtown, but then you have the suburbs, where you just have tons of these spaces and no one expects to pay anything for them.

AD: The giant problem, the giant challenge, is to create a market for parking at all. When there is a market for parking, then there are a number of positive feedback loops that will help to diminish the supply of parking. That’s really the ultimate goal of the whole argument.

There is currently a ruinous, vicious circle: Neighbors want free, uncongested on-street parking, so they demand lots of off-street parking at all new developments. That ensures that the supply is flooded, and so it makes no sense to charge for it. And that process keeps happening. You have to cut that circle, and that’s been very hard to do.

And so, the correct way to price on-street parking is any way you can price it.

The problem here is political, not primarily analytical or economic. The ideal way to price parking is on the principle of performance pricing.

TS: But then if you start to generate a lot of revenue from parking spaces on the streets, have you made it harder to reclaim street space for other purposes, like parklets and cycle tracks and wider sidewalks?

AD: It is possible that you have. There may be a tension between the Shoup model of parking reform and other street reclaiming activities.

But I suspect that it is a complicated tension. For example: If in your neighborhood you have eight curb spaces on each block, on each side of the street — which is normal — and under current circumstances, they price out at a dollar an hour apiece. If your neighborhood is getting the revenue to invest in community projects, including things like parklets and cycling infrastructure, it’s conceivable — and I’ve never seen anyone do this analysis — it’s conceivable that the price per curb space goes up to $1.50 when you eliminate parking spaces to put in a cycle track.

So it might be that parking reform pays for the street reclaiming that we want to do. Again I’m speculating.

TS: This is a very cold, rational analysis that neighbors can do to say, “This is better for our community at large because we can get these rebates and get this revenue,” but people also think that they have a right to park their enormous machines anywhere they want to go, including multiple spaces in front of their houses.

Even in buildings where parking is unbundled from the price of rent, everyone is paying for those parking spaces because the market is so flooded with on-street spaces, you can’t charge enough to cover to cost of building the parking.

AD: Again, the problem is political. What do we have that we can pit against territoriality? What’s strong enough to potentially overcome it? Shoup’s insight, which I agree with, is that greed might be powerful enough to counteract territoriality.

TS: But it’s a different kind of greed. You’re talking about a communal good.

AD: Yes, but it’s a communal good that increases the value of your property. So you are richer because of the better sidewalks, nicer parks, increased police protection — whatever it is that the community chooses to spend its parking revenue on. You have more money. So it’s not just a public good versus private.

TS: It seems like the other thing that would cycle back is this: All of a sudden these off-street spaces become more valuable because you’re charging a market rate on the street. Would that drive up that value enough that, even if you eliminate all requirements, developers would start building more parking spaces into their buildings because the price that they can get for it increases? Would you actually end up eliminating parking requirements, charging market rates, and then ending up with more off-street parking?

AD: There are probably a few places where that would happen, and it probably should happen in those places. In most places that’s not what will happen. And the reason is that parking is really fricking expensive to build. And the market price for off-street parking is way below the actual cost of building it.

Our preliminary analysis in the Seattle area shows that every resident of an apartment building is paying for the parking spaces whether they use one or not. Even in a city where most new apartment buildings have unbundled parking from the rent, which is a sign of progress. In Seattle, almost all the new apartment developments offer tenants a space if they want one but they pay for it separately. But even in those buildings, everyone is paying for those parking spaces because the market is so flooded with on-street spaces, you can’t charge enough to cover to cost of building the parking.

And in most cities it’s also not legal to do any kind of creative solution like renting parking in the night from nearby grocery stores and office buildings. In the article I talked about what happened in Los Angeles when the city waived parking requirements in old buildings in downtown. Six thousand new apartments got built in short order and most of them offered parking, but half of the parking was offsite.

We’ll publish the rest of the interview tomorrow, in which we discuss why public officials go into politics, dangerous assumptions about future driving trends, and induced driving.

  • justin

    I live in San Francisco, where we have demand-based pricing in several neighborhoods. As this article mentions about the philosophy in general, the stated goal is that because of the price, there should always be 1-2 spots open per block. The problem I have with this is the confidence it gives potential drivers that there will be parking at their destination. How many drivers would otherwise leave their cars at home because of lack of parking?

    I used to have a roommate who, going out to party in the Marina at night, would say, “I guess I’ll take the bus because there’s no parking,” to my great delight. If demand-based pricing makes open spaces likely, the city is saying to him, “we’ve made sure there’s parking for you — drive on down!”

    Am I missing something, or does greater turnover of parking actually encourage more driving?

  • Anonymous

    It produces LESS driving. Cruising for parking produces about one-third of traffic in many commercial neighborhoods. So performance pricing eliminates all of that. Furthermore, it dissuades lots of people from driving who were willing to take their chances of winning the parking lottery but are not willing to pay a guaranteed price.

  • justin

    I hope you’re right, but would like to see numbers. I’ve never seen any study mention any encouraging effect due to the likelihood of open spaces.

    There are similarities between 1) cars clogging the road because they’re circling for parking (no market pricing) and 2) more people choose to use their cars for short in-town trips because they know there’s parking waiting for them (with market pricing). Both mean more cars on the road, slowing transit.

    I would think that someone with a bunch of errands to run would be more likely to drive if they knew there was parking, even if it meant putting a few quarters into various $5/hour meters for 10 minutes at a time, for example. If they weren’t confident in available parking, they’d be more likely to walk, take the bus, or bike.

  • Anonymous

    Excellent series, Alan, and great that you’re extending/deepening Don Shoup’s pathbreaking work. But I cringe at your stated summation: The giant challenge is to create a market for parking. “Creating a market” smacks of financial manipulation, complex new financial manipulations and the hocus-pocus that helped (deservedly) sink carbon cap-and-trade. You’re not really creating a market for parking, you’re requiring drivers to pay for it. Why not just say: The challenge is to convert so-called free parking to performance parking (or similar)?

  • anon_coward

    he is right. i’ve stayed away from brighton beach in brooklyn because parking is non-existent there. and my wife takes 5 minute trips by car because there is meter parking at the destination

  • Anxiously Awaiting Bikeshare

    Well if there were so many of these people who would shop by car if they knew there would be an open space, then the price of parking would continue to rise until they walk/bus/bike because of the cost. Then rich people could park all they wanted and the poor would take the more sustainable method. Ideally we then use that money to some positive social benefit like a plaza conversion.

  • Kenny Easwaran

    Some people are more motivated by the cost in stress and time of finding parking; other people are more motivated by the cost in dollars of paying for parking. Demand-based pricing converts from one to the other.

    Perhaps more importantly, stress and time of finding underpriced parking is extremely uncertain – some days you luck out, and other days you hunt for 20 minutes. Depending on quirks of people’s individual psychology, that may mean that they systematically overestimate or underestimate how much time they’re going to spend hunting. When you convert to a price, it takes out all the uncertainty, so that at least people are making decisions based on the actual cost they’re going to pay. That should be a psychological benefit to the drivers.

    At any rate, if the total number of parking spaces remains fixed, this can’t end up with an increase in the number of cars driving to a given destination, since the number of parking spaces provides the cap.

  • justin

    I agree with your idea about motivations, and wonder if anyone has done the calculus of which motivator causes more people to leave the car at home (or even better, sell it).

    I don’t agree that fixed parking equals fixed car trips — If one parking space is taken by the same car all day, at most one car has made the trip for that space. If the price is high enough to encourage turnover and 50 people use the space all day, at most 50 cars have made the trip — fixed number of spaces, 50x the car trips. The question is how many of those people chose to drive or not drive based on the price and/or availability of parking.

    I guess the question is what the goal is here — less local congestion from drivers circling for parking? easier parking for drivers? fewer car trips to reduce overall congestion, pollution, accidents, etc?

    It’s clear that parking management will reduce the number of drivers circling for parking. But it’s also possible that *without* parking management, for every 20 people circling the block, 20 other people never took the car out in the first place because they knew they wouldn’t find a spot easily. Which is better?

    The concept of induced demand for more and wider freeways seems widely accepted in the Streetsblog crowd, so why not for parking spaces? Demand-based parking pricing effectively means more parking capacity, which could mean induced demand.

  • Kenny Easwaran

    You’re right about the turnover – I hadn’t considered that. However, lots of underpriced meters currently have 1 hour or 2 hour limits that force turnover. I don’t know if higher prices will increase turnover more than that.

    But the point about induced demand is one to be careful about. Demand is induced when the total cost of something falls below some threshold. Adding highway lanes lowers the time cost of driving while leaving the dollar cost the same (for the driver), so it induces demand. Raising prices for parking should (in some economically idealized sense) just convert time cost into dollar cost, in a way that leaves the total cost the same for the average user. Thus, it shouldn’t induce demand on net.

    It should have the same effect as congestion pricing on highways – they decrease travel times but increase travel costs. In general, they must be increasing costs to a greater extent than they’re decreasing travel times, because otherwise you’d have the same total number of cars on the road, which seems difficult to manage with the faster moving traffic.

    But of course, empirical work needs to be done in translating the economic theory into practice, since we know that actual people aren’t capable of making the complex calculations trading off convenience and price, or even knowing how much the convenience is actually there.

  • Anonymous

    Justin, I understand your concern that the certainty of drivers in finding priced parking will inspire more driving than uncertainty at finding priced parking. However, the combination of very pricey but still uncertain parking availability might be visitor avoidance of said commercial or residential areas like the Marina. We certainly see this in a few parts of San Francisco at key times, because the transit alternatives are still so sub-par. I just returned from Stockholm + Paris where their extensive underground + overground transit makes nearly everywhere accessible regardless of the parking price or availability. But so far, SF has NOT dedicated the money to building such a system. I am glad the city continues to experiment at least with the parking side. It will take a lot of political courage and vision to pay for the other half — building out true transit. Interestingly, these European cities simply built the transit without waiting for everyone to be miserable in their cars due to congestion and parking lack of availability.

  • Anonymous

    Sorry, I cannot get the edit function to work, so just ignore the above, now garbled comment.

  • Kenny Easwaran

    I’m not sure why you say carbon cap-and-trade is hocus pocus. It really is exactly the same thing. People’s behaviors (parking or emitting CO2) impose a cost on others. We decide to set a limit to the amount of this cost that will be tolerated (by not building more parking, or by limiting total CO2), and then make people pay for the right to be included in the amount that will be tolerated, so that the most beneficial uses will still be made, while the ones that are more frivolous will be eliminated at the source.

  • anon_coward

    the chance of this passing is remote, simply for the fact that even in places like NYC there are a lot of areas not served by transit and people will oppose any new taxes on their commute or transportation. that’s why congestion pricing failed here

  • Anonymous

    There are a gazillion reasons cap-and-trade can never be a fully effective climate measure, starting with the fact that you can’t predict the carbon permit price three months out, let alone the necessary 5 or 10 years. For more, see http://www.carbontax.org/blogarchives/2012/12/03/charm_or_chimera/.

  • Kenny Easwaran

    The discussion you link there is a discussion of a carbon tax, which is quite different from cap-and-trade. There is one brief mention of how cap-and-trade is better than a carbon tax in David Roberts’ side of the discussion.

    The analogous distinction in parking is between cap-and-trade as demand-based pricing of parking, and a carbon tax as just being a flat meter rate (which might be quite high) that the city sets. The latter would be too high a price for some areas and too low a price for others.

  • Boris

    Congestion pricing did not fail here. It passed the city council. It “failed” because Sheldon Silver failed to bring it up for a vote at the state assembly.

  • anon_coward

    and that was because a lot of people who work in NYC live outside NYC and have to drive in to work or driving is A LOT easier for them than taking the train

    i support it as well as tolling all the bridges into manhattan, but as things are now its a new tax on people who live far from public transportation

  • Anonymous

    I respect your opinion, but you’re wrong about a carbon permit market. It is easy to predict the carbon permit price any amount of time into the future … a futures market in carbon permits would likely be one of the first things to develop around carbon trading, just as it exists around many other commodities today.

    On-street parking and carbon emissions share a lot of characteristics. They are both suffering from excess demand because of the zero cost to end-users and diffuse negative externalities that characterize them.

    Setting a price for anything is somewhat arbitrary when there is no market for that good. How much should it cost to park for one hour on a given street at a given time? You make it up, and see what happens. As long as there is a mechanism to adjust price in response to supply and demand, the market forces will find the equilibrium price.

    What people object to regarding this mechanism are usually 2 things. First, nobody likes paying for something that used to be free. Second, someone is going to make money one there is a market for the good and the price is non-zero, and that pisses off everyone who isn’t making money.

  • Anonymous

    It’s not a tax, it’s a price on a public good. I think “user fee” is the preferred term for these types of pricing mechanisms.

    Drivers can choose to pay the fee, or to find solutions such as carpooling, transit, passing the cost along to employers or customers, etc … that mitigate or avoid the fee. Not everyone has those options, but many do.

    I would say the evidence of gridlock supports the assertion that driving into Manhattan is too cheap, at least during normal business hours. Increasing the price would benefit the region as a whole, although it would surely be a hardship for some subset.

  • Anonymous

    Your logic is somewhat circular.

    You start with the assumption that under a free parking regime, parking is scarce. This discourages certain trips by car because of the uncertain cost in time to find parking.
    Then, increase the cost of parking to the point where the chance of finding a parking spot quickly is high.
    The price in dollars has to be high enough to discourage enough car trips that the demand for parking is reduced from its base case.
    It shifts the demand, from people who have more time than money, to people who have the opposite. But overall it must reduce total demand for parking and therefore for driving.

  • justin

    good point, the most likely outcome of expensive or difficult parking is people will just drive to the suburbs where’s there ample free parking, and wide freeways to take them there.

  • justin

    I see what you’re saying, but you’re leaving out an important thing: higher prices encourage turnover, meaning the parking supply goes up: one of the stated goals of parking management in SF is to discourage the common practice of people leaving their cars in the same spot all day, removing that spot from the supply. If a unit of parking supply is, say, one spot for 30 mins, then higher turnover means the same number of parking spots offers a greater supply per day. And a higher supply can meet a higher demand.

  • Anonymous

    What you suggest could be true, but only if there is a large amount of latent demand for parking for that is very sensitive to cost in time but not very sensitive to cost in money.

    Turnover increases as free parking shoppers with lots of time to spend stop looking for spots because they don’t want to pay. In theory, this might bring new demand from people who currently avoid driving because it takes too long to find parking, but would drive more if they could find a parking spot quickly, even if they have to pay more.

    However, the group of new drivers who are not price sensitive would have to, in aggregate, take more car trips with shorter time spent parking than the group of departing drivers. It’s a special case that depends on the relative elasticity of demand with respect to time vs. price for different subgroups.

    Even if it did create more demand from people willing to pay for parking, I don’t think this is necessarily bad. Driving in a city should be expensive, but for those who can afford it, it should be fast and convenient.

  • Anonymous

    What you suggest could be true, but only if there is a large amount of latent demand for parking for that is very sensitive to cost in time but not very sensitive to cost in money.

    Turnover increases as free parking shoppers with lots of time to spend stop looking for spots because they don’t want to pay. In theory, this might bring new demand from people who currently avoid driving because it takes too long to find parking, but would drive more if they could find a parking spot quickly, even if they have to pay more.

    However, the group of new drivers who are not price sensitive would have to, in aggregate, take more car trips with shorter time spent parking than the group of departing drivers. It’s a special case that depends on the relative elasticity of demand with respect to time vs. price for different subgroups.

    Even if it did create more demand from people willing to pay for parking, I don’t think this is necessarily bad. Driving in a city should be expensive, but for those who can afford it, it should be fast and convenient.

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