BELOW IS A COMPLETE OVERVIEW OF THE STRATEGY OF PARKING FEES AS SUPPLIED BY

 Description

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 U.S. employees who commute by automobile, only 5% pay full parking costs and 9% pay a subsidized rate, and parking is unpriced at more than 98% of non-commute trip destinations (BTS, 1992). When parking is priced, there are often substantial discounts for long-term leases and sometimes there is no hourly or daily rental option, leaving motorists with little financial incentive to use alternative modes part time (for example, to Rideshare twice a week).

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. 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.

How It Is Implemented

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)

This table summarizes various methods that can be used to collect parking fees.

Setting Parking Rates and Fines

Several factors should be considered when setting parking rates.

Transportation and Parking Management

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.

Cost Recovery

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)

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)

This table shows the rate needed to recover parking facility costs under various conditions.

Maximize Revenue

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 U.S. Parking Prices

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 US cities.

Table 5            Average Parking Rates in U.S. Cities (PT, 2000)

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.

Enforcement

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.

Travel Impacts

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

(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

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 California. Table 7 summarizes their results. It indicates, for example, that in the South Coast (Los Angeles) region, a $3 per day parking fee would reduce total vehicle trips by about 2.8%, and congestion delay would decline by a much larger amount (8.5%).

Table 7            Impacts of Employee Parking Fees  - Year 2010 (Harvey and Deakin, 1997, Table B.7, in 1991 U.S. dollars)

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

Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.

Benefits And Costs

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 Management

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.

Reduced Automobile Use and Congestion

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.

Efficient Land Use

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.

Revenues

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.

Equity

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

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).

Transaction Costs to Users and Facility Owners

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.

Financial Costs to Motorists

Parking Pricing represents a cost to motorists, which is an economic transfer that is offset by revenues to facility owners.

Spillover Impacts in Other Areas

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.

Competitive Disadvantage

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

Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.

Equity 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

Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.

Applications

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

Ratings range from 0 (not appropriate) to 3 (very appropriate).

Category

Incentive to Reduce Driving

Relationships With Other TDM Strategies

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.

Stakeholders

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.

Barriers To Implementation

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.

Best Practices

KT Analytics (1995), Shaw (1997), (Pratt, 1999) and Litman (1999) provide suggestions for Parking Pricing. Also see Parking Policy Evaluation and Parking Solutions. Best practices include:

·       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:

Examples and Case Studies

Comsis (1993), ICF (1997), and K.T. Analytics (1995) describe various Parking Pricing programs implemented as part of TDM programs.

Redwood City (http://shoup.bol.ucla.edu/Redwood%20City.pdf)

The Redwood City, California parking ordinance is written to achieve efficient parking fees and return revenues to local business districts. It was adopted unanimously by the city council in 2005, and is supported by local business leaders.  Here are some excerpts from the ordinance:

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.

Downtown Pasadena Redevelopment (Kolozsvari and Shoup, 2003; www.uctc.net)

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.

San Francisco Commercial Parking Tax (www.ci.sf.ca.us/tax/parking.htm)

The city of San Francisco imposes a 25% tax on all commercial parking transaction (“any rent or charge required to be paid by the user or occupant of a parking space.”) The city collects nearly $50 million annually from this tax, and expects this revenue to increase if parking operators implement better revenue control systems (PT, 2001). Revenues are divided between the city’s general revenue, public transportation and senior citizen funds.

Dutch National Car Park Policy

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.

Portland’s Parking Meter Pay Stations Pay

In early 2002 the City of Portland authorized installation of pay station technology to replace its aging coin parking meters. With over 7,000 meters in operation, this was a major undertaking.  The SchlumbergerSema manufacturers “smart meter” pay station was selected. These cost about $6,100 each and replaced up to 9 meters per block face, compared with about $650 for a new coin meters. The smart meters are solar powered, accept credit cards and require less sidewalk space.

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.

Portland was the first large city in North America to change over the majority of its meters to pay stations. Many other cities are now making the change, including nearby Seattle and Tacoma. These cities are also looking into ways to share smart card technology, so the same card can operate in each city. They are also investigating technologies that allow cell phone payments and the ability to validate/approve credit card use prior to transactions. With this growing demand, the number of automated parking station manufacturers is increasing, from about 12 when Portland began its research to nearly 25 now.

Austin Parking Benefit District (www.ci.austin.tx.us/parkingdistrict/default.htm)

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.

Performance-Based Parking Pricing (http://shoup.bol.ucla.edu/RedwoodCity.pdf)

Redwood City, California, sets performance-based prices to achieve an 85% occupancy rate, and returns the revenue to the metered districts, as outlined in a city ordinance.

Examples Cited by K.T. Analytics (1995)

·       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 Madison imposed a surcharge of $1 per day at four parking facilities combined with new shuttle services. Five to eight percent of commuters switched to transit as a result.

·       The City of Chicago raised fees at municipal lots 30-120%, bringing them to levels at nearby commercial lots. The number of cars parked declined 35%, with no significant increase in parking at nearby lots.

·       The City of Eugene approximately doubled monthly rates at municipal parking lots from a minimum of $6 to $16 for surface lots and from $16 to $30 for garages. Parking demand declined 35%, about half changing parking locations and the other half switching to public transit or other alternative modes.

References And Resources For More Information

Apogee, Costs and Cost Effectiveness of Transportation Control Measures; A Review and Analysis of the Literature, National Association of Regional Councils (www.narc.org), 1994.

Berk & Associates, Seattle Parking Tax Analysis, City of Seattle (www.cityofseattle.net/td/plan_parkingtax_study.asp), 2002.

BTS, Summary of Travel Trends; 1990 National Personal Transportation Survey, Bureau of Transportation Statistics, USDOT (www.fhwa.dot.gov/ohim/nptspage.htm), 1992.

Colliers, CBC Parking Rate Survey, Colliers International (www.colliers.com), 2005.

Comsis Corporation, Implementing Effective Travel Demand Management Measures: Inventory of Measures and Synthesis of Experience, USDOT and Institute of Transportation Engineers (www.ite.org), 1993; available at www.bts.gov/ntl/DOCS/474.html.

CORDIS, Parking Policy Measures and their Effects on Mobility and the Economy, COST 342, CORDIS (www.cordis.lu/cost-transport/src/cost-342.htm), 2001.

CROW. publication 79 Rotondes, Centre for Research and Contract Standardisation in Civil and Traffic Engineering (www.cur.nl) , The Netherlands, 1993.

Mark Delucchi and James Murphy, Motor-Vehicle Goods and Services Bundled in the Private Sector, Report #6 in the Series “The Annualized Social Cost of Motor-Vehicle Use in the United States, Based on 1990-1991 Data,” Institute of Transportation Studies, University of California at Davis (www.engr.ucdavis.edu/~its), 1998.

John Dorsett, “The Price Tag of Parking,” Urban Land, May 1998, pp. 66-70.

Marcus Enoch and Stephen Ison (2006), “Levying Charges On Private Parking: Lessons From Existing Practice,” World Transport Policy & Practice, Vol. 12, No. 1 (http://ecoplan.org/wtpp/general/vol-12-1.pdf), pp. 5-14.

Greig Harvey and Elizabeth Deakin, “The STEP Analysis Package: Description and Application Examples,” Appendix B, in Apogee Research, Guidance on the Use of Market Mechanisms to Reduce Transportation Emissions, USEPA (Washington DC; www.epa.gov/omswww/market.htm), April 1997.

David Hensher and Jenny King, “Parking Demand and Response to Supply, Pricing and Location in Sydney Central Business District,” Transportation Research A, Vol. 35, No. 3, March 2001, pp. 177-196.

Daniel B. Hess, The Effects of Free Parking on Commuter Mode Choice: Evidence from Travel Diary Data, Lewis Center for Public Policy Studies, UCLA (www.sppsr.ucla.edu/lewis/WorkingPapers.html), April 2001.

ICF, Guidance on the Use of Market Mechanisms to Reduce Transportation Emissions, USEPA (Washington DC; www.epa.gov/omswww/market.htm), 1997.

IPI, International Parking Institute (www.parking.org) provides information for parking management professionals.

JHK & Associates, CM/AQ Evaluation Model, Texas Transportation Institute, 1995.

K.T. Analytics, Parking Management Strategies: A Handbook For Implementation, Regional Transportation Authority (Chicago), 1995; available as FTA, TDM Status Report: Parking Supply Management and TDM Status Report: Parking Pricing, Federal Transit Administration (www.fta.dot.gov/library/planning/tdmstatus/tdm.htm), 1995.

Ruth Knack, “Pay As You Park,” Planning (www.planning.org/planning), May 2005.

Michael Kodama, Parking Management Handbook; How to Use Parking Management to Better Utilize Parking Resources, Dept. of Environmental Quality, State of Oregon (www.deq.state.or.us), 1999.

Douglas Kolozsvari and Donald Shoup, “Turning Small Change Into Big Changes,” ACCESS 23, University of California Transportation Center (www.uctc.net), Fall 2003, pp. 2-7.

Arun R. Kuppam, Ram M. Pendyala, and Mohan A. V. Gollakoti, “Stated Response Analysis of the Effectiveness of Parking Pricing Strategies for Transportation Control,” Transportation Research Record 1649, 1998, pp. 39-46.

Richard J. Kuzmyak, Rachel Weinberger and Richard H. Pratt, Parking Management and Supply: Traveler Response to Transport System Changes, Chapter 18, Report 95, Transit Cooperative Research Program; Transportation Research Board (www.trb.org), 2003.

Todd Litman, Parking Requirement Impacts on Housing Affordability, VTPI (www.vtpi.org), 1998.

Todd Litman, Pavement Busters Guide, VTPI (www.vtpi.org), 1999.

Todd Litman, Transportation Land Valuation; Evaluating Policies and Practices that Affect the Amount of Land Devoted to Transportation Facilities, VTPI (www.vtpi.org), 2000.

Todd Litman, Parking Management Best Practices, Planners Press (www.planning.org), 2006.

Todd Litman, Parking Management: Innovative Solutions To Vehicle Parking Problems, Planetzen (www.planetizen.com/node/19149), 2006.

Todd Litman, Parking Management: Strategies, Evaluation and Planning, Victoria Transport Policy Institute (www.vtpi.org/park_man.pdf), 2006a.

Todd Litman, Parking Taxes: Evaluating Options and Impacts, VTPI (www.vtpi.org/parking_tax.pdf), 2006b.

LLREI, Emerging Trends in Real Estate 2001, Lend Lease Real Estate Investments (www.leandleaserei.com), 2000.

James Luk, Technologies for On-Street Paid Parking, Australian Road Research Board, 1995.

Kyle Maetani, Michael Kodama, Richard Willson, William Francis & Associates, Using Demand-Based Parking Strategies to Meet Community Goals; Local Government Parking Management Handbook, Mobile Source Air Pollution Reduction Committee (MSRC), South Coast Air Quality Management District (www.aqmd.gov), 1996.

Mary Marr, Downtown Parking Made Easy, Downtown Research and Development Center (www.alexcommgrp.com/drdc), 1999.

Gerard Mildner, James Strathman and Martha Bianco, “Parking Policies and Commuting Behavior,” Transportation Quarterly, Vol. 51, No. 1, Winter 1997, pp. 111-125.

John Morrall and Dan Bolger, “The Relationship Between Downtown Parking Supply and Transit Use,” ITE Journal, February 1996, pp. 32-36.

MRSC, Downtown Parking Solutions, Municipal Research and Service Center of Washington (www.mrsc.org/Subjects/Transpo/Tpark/transsolut.aspx), 2005.

Richard H. Pratt, Traveler Response to Transportation System Changes, Interim Handbook, TCRP Web Document 12 (www4.nationalacademies.org/trb/crp.nsf/all+projects/tcrp+b-12), DOT-FH-11-9579, 1999.

PT, “What is the Average Price to Park in Major U.S. Metropolitan Areas,” Parking Today (www.parkingtoday.com), Oct. 2000.

PT, “San Francisco May Require High-Tech Equipment on Surface Honor Lots,” Parking Today (www.parkingtoday.com), March 2001, p. 31-32. 

Parking Today Website (www.parkingtoday.com) has information and links to parking resources.

Gabriel Roth, Paying for Parking, Hobart Paper 33 (London), 1965; available at the Victoria Transport Policy Institute website: www.vtpi.org/roth_parking.pdf.

John Shaw, Planning for Parking, Public Policy Center, University of Iowa, Iowa City (www.uiowa.edu), 1997.

Yoram Shiftana, “Responses to Parking Restrictions: Lessons from a Stated Preference Survey in Haifa and Their Policy Implications,” World Transport Policy And Practice (www.eco-logica.co.uk/wtpp05.4.pdf), Vol. 5, No. 4, 1999, pp. 30-35.

Donald Shoup, “An Opportunity to Reduce Minimum Parking Requirements,” Journal of the American Planning Association, Vol. 61, No. 1, 1995, pp. 14-28.

Donald Shoup, “The Trouble With Minimum Parking Requirements,” Transportation Research A, Vol. 33, No. 7/8, Sept./Nov. 1999a, pp. 549-574, also available at VTPI (www.vtpi.org).

Donald Shoup, “Instead of Free Parking, Access 15 (www.uctc.net), Fall 1999b, pp. 8-13.

Donald Shoup, Curb Parking: An Ideal Source of Public Revenue, Lincoln Institute of Land Policy (www.lincolninst.edu), Presented at “Analysis of Land Markets and the Impact of Land Market Regulation,” (Code CP02A01), July, 2002

Donald Shoup, Cruising For Parking, Presentation at the World Parking Presented at the World Parking Symposium, Toronto, May 2004.

Donald Shoup, The High Cost of Free Parking, Planners Press (www.planning.org), 2005. This is a comprehensive and entertaining book of the causes, costs and problems created by free parking, and how to correct these distortions.

Donald Shoup, The Price of Parking On Great Streets, Planetizen (www.planetizen.com/node/19150), 2006.

Mary Smith, “Parking,” Chapter 14, Transportation Planning Handbook, Institute of Transportation Engineers (www.ite.org), 1999.

Lawrence Solomon, “On the Street Where You Park: Privatizing Residential Street Parking Will Keep the Lilacs Blooming, the Larks Singing and the Pavement to a Minimum,” The Next City, Vol. 1, No. 2 (www.nextcity.com), Winter 1995, pp. 58-61.

SPECTRUM, Review of Specific Urban Transport Measures in Managing Capacity, SPECTRUM (Study of Policies regarding Economic instruments Complementing Transport Regulation and the Undertaking of physical Measures) (www.its.leeds.ac.uk/projects/spectrum/downloads/D2.pdf), 2005.

SPUR, Reducing Housing Costs by Rethinking Parking Requirements, The San Francisco Planning and Urban Research Association (www.spur.org), 1998.

TLC, The Myth of Free Parking, Transit for Livable Communities (www.tlcminnesota.org) 2003.

USEPA, Technical Methods for Analyzing Pricing Measures to Reduce Transportation Emissions, USEPA Report #231-R-98-006, (www.epa.gov/clariton), 1996.

USEPA, Parking Pricing, Transportation and Air Quality TCM Technical Overviews, US Environmental Protection Agency (www.epa.gov/oms/transp/publicat/pub_tech.htm), 1998.

USEPA, Parking Spaces / Community Places: Finding the Balance Through Smart Growth Solutions, Development, Community, and Environment Division (DCED); U.S. Environmental Protection Agency (www.epa.gov/smartgrowth/parking.htm), 2006.

Erin Vaca and J. Richard Kuzmyak, Parking Pricing and Fees, Chapter 13, TCRP Report 95, Transit Cooperative Research Program, Transportation Research Board, Federal Transit Administration (www.trb.org/publications/tcrp/tcrp_rpt_95c13.pdf), 2005.

VTPI, Parking Cost, Pricing And Revenue Calculator, Victoria Transport Policy Institute (www.vtpi.org/parking.xls), 2003.

Richard Willson, “Parking Pricing Without Tears: Trip Reduction Programs,” Transportation Quarterly, Vol. 51, No. 1, Winter 1997, pp. 79-90.

Philip Winters and Daniel Rudge, Commute Alternatives Educational Outreach, National Urban Transit Institute, Center for Urban Transportation Research (Tampa; www.cutr.eng.usf.edu), 1995.

WSDOT, Local Government Parking Policy and Commute Trip Reduction; 1999 Review, Commute Trip Reduction Office, WSDOT (Olympia, www.wsdot.wa.gov/pubtran/ctr), 1999.

Robin Zimbler, Driving Urban Environments: Smart Growth Parking Best Practices, Maryland Governor’s Office of Smart Growth (www.smartgrowth.state.md.us/pdf/Final%20Parking%20Paper.pdf), 2005.