Chapter 16 — Turning Small Change in Big Changes
Here Donald Shoup gets to the idea of using Business Improvement Districts to manage street parking as Brandon Smith mentioned in the last post’s comments. When parking revenue goes to municipalities’ general funds, drivers see it as a fee with questionable benefit. Contrarily, when parking revenue stays in the neighborhood, it can provide tangible benefits in the form of neighborhood improvements. This may make drivers more willing to pay for parking. More importantly, it creates an interest group in favor of charging a rate for parking that provides an funding source for neighborhood improvements. Seen from this angle, paid street parking benefits businesses from multiple angles.
He uses to Los Angeles neighborhoods to demonstrate the potential benefits of parking revenues. In the 1980’s, Old Pasadena was suffering from a vacant building problem because historic buildings did not include onsite parking. As a result, they could not be repurposed. In 1993 the city introduced parkign emters and gave the revenues to the neighborhood to finance public improvements. Additionally, building owners were given the right to pay a fee for parking in a public garage rather than providing parking onsite, allowing existing buildings to be repurposed. These policy changes have created an environment where drivers can easily find parking and a streetscape that is more inviting for pedestrians.
Shoup contrasts Pasadena with Westwood Village which has been in decline since the 1980s. In 1994 a parking study revealed that curb parking was 96 percent occupied, meaning the neighborhood had a significant cruising problem. As a response to the neighborhood’s decline, though, the city decreased hourly parking rates from $1 to 50 cents, worsening the parking shortage. This revenue goes to the city’s general fund even though the neighborhood is in need of streetscape improvements. Shoup explains that Old Pasadena has become as desirable as Westwood Village once was.
Many business districts may believe that free parking is an asset, and in a sense it may be. But turning parking revenue over to the neighborhood will make the change politically palatable and will reallocate parking spaces to those drivers who are willing to pay for it. Additionally, higher prices will increase parking turnover, allowing more customers to visit local businesses.
Chapter 17 — Taxing Foreigners Living Abroad
The title of this chapter plays on the perennial desire of residents of one jurisdiction to receive public services at the expense of those outside the jurisdiction. Shoup suggests this may be possible when it comes to neighborhood parking. At present, property owners and tenants in residential areas often oppose commercial development because of parking spillovers. With good reason, these NIMBYs have concerns that commercial developments will lead to increased parking pressure for the free spots on their streets, making it difficult for them to park near their homes. Shoup suggests this creates an opportunity for residential parking benefit districts. Those with residential permits could park free in these neighborhoods, but drivers visiting the adjacent commercial uses would pay for parking. This parking management could ensure that parking does not become overly congested and also provide the neighborhood with money to finance improvements.
This policy contrasts with some neighborhoods that have created zones where only those with residential permits can park. This policy often leads to excess street parking availability and eliminates potential gains from trade.
In some residential neighborhoods, however, the parking commons problem comes from the residents themselves who pay below market rate for their residential permit prices. In these cases Shoup suggests that all street parking should be allocated with prices high enough to provide some availability. He points out that this could also reduce NIMBYism toward converting carriage houses or garage space to accessory dwellings, permitting new affordable housing. Because parking would be governed by prices, new residents will not lead to a parking shortage.
The twentieth century saw a great competition between two economic systems: central planning and market prices. . . . Parking is a perfect example of an economic activity where planners have usurped markets without justification. We have relied almost exclusively on the command-and-control approach to regulate parking, and we have failed spectacularly.
Chapter 18 — Let Prices Do the Planning
In this chapter, Shoup emphasizes that prices are the only way to allocate goods given consumers’ varying preferences. He models parking decision based on the variables of distance to destination, price of the parking spot, parking duration, walking speed, number of people in the car, and value of time. In a world of free parking, drivers varying preferences for time and willingness to pay cannot be served; rather everyone must pay for parking with their time. When parking is priced according to demand on each block, the invisible hand will efficiently lead drivers to park in the spot that meets their preferences for saving money and saving time for each trip.
Additionally, charging appropriate prices for curb parking reduces political pressure for off-street parking. In this scenario, develoeprs will have the incentives to provide the amount of off-street parking their customers demand, and planners can begin rolling back parking requirements. Retailers that choose not to include parking in the price of their goods will be able to compete with lower prices or on other aspects of their service.
Thoughts on this Section:
These chapters provide some solutions to current parking problems that seem both effective and politically possible with BIDs and residential parking benefit districts receiving parking revenues in their neighborhoods. It’s heartening to see some market urbanist solutions that have succeeded in neighborhoods and cities already. However, I’m not convinced that the proposal to charge for all street parking in some neighborhoods would be accepted by many residents, and Shoup acknowledges it could be difficult. At present neighborhoods often oppose new development because of its parking pressures, but it’s not clear to me that residents would prefer paying for street parking than dealing with parking congestion.
Also, I think it’s important to acknowledge that some people benefit from the current situation, predominantly those who place a low value on their time, make frequent car trips, and prefer cruising to paying for parking. This is not to say that charging for street parking and eliminating off-street parking requirements wouldn’t be a step toward fairness and efficiency, but rather that it’s honest to acknowledge this change will make some people worse off.
I enjoyed this section as it focuses on the power of prices to create order and the role of institutions in the parking problem. He ends chapter 18 with an idea picked up in Eran Ben-Joseph’s Rethinking a Lot, a book I recently reviewed at City Journal. Shoup and Ben Joseph suggest that cities should move from regulating to the number of parking space to regulating parking design. However, as I see it regulating for design will be subject to the same knowledge problems Shoup points out in regulating for quantity.