Hyde Park Urbanist

Beating the Drum on Free Parking

The usually thoughtful Kevin Drum wandered into a debate he's not ready for, arguing with Matthew Yglesias over parking regulations.  Yglesias is a resident of Washington, D.C., who, like me, generally believes government intervention has the burden of proof but willingly admits it has its place.  Kevin Drum is a a liberal California suburbanite and an engineer at heart.  But the biggest difference is that Yglesias has read Donald Shoup and Drum hasn't.  Drum's argument lacks a scientific foundation.

Requirements in cities and suburbs vary, but here in the burbs the general idea behind parking regulations is to make businesses pay for their own externalities instead of fobbing them off on other people...

Now, if your goal is simply to reduce the amount of parking so that it's a pain in the ass and people will drive less, that's fine. It's a pretty roundabout way of doing it, but whatever. But if your goal is to match parking spaces to cars, then it's simply not true that property owners are the best judges of how much parking is needed. Like profit maximizers anywhere, they'll do their best to provide as little parking as possible and instead try to free ride on the parking that other people have already created and paid for.

If I live in the suburbs and "own" the parking space in front of my house, do I have to park a car there or can I use this resource for something I really want?  Can I build a shed there, for instance?  Could I transfer this resource to someone else, say the business on the corner, in exchange for something I want?  Why does the city insist that I can only use this for cars, my cars, when I have a perfectly good driveway?  Is that the largest possible benefit of this resource?  Is it the best possible use of that space from the point of view of either the city or myself?

There are two kinds of people in this world*-- those who've read Donald Shoup's writings and come away convinced that parking should pay for itself and those who haven't read Shoup.  Seriously, I'm still waiting to find a coherent argument against Shoup's thinking by someone who's read him.  American communities have devoted huge resources to parking without a thorough cost benefits analysis. Shoup breaks new ground by examining the issue in both a theoretical and scientific manner. 

I really hate to be rude about this, but we Shoupistas basically think the other side is just uninformed (or greedily defending a middle-class entitlement that promotes the destruction of the planet).  To us, the un-read are like global warming deniers.  So, please read Shoup.  If you do and can come up with thoughtful critiques, I'll honestly be happier than I am now.  I don't enjoy calling the other side in an argument "uninformed", but what else fits?

If Drum had read The High Cost of Free Parking's chapter concerning how most cities arrive at their minimum parking space regulations, he wouldn't have argued what he did above.  If you're going to defend civil engineers' regulations, you should be ready to explain how they arrived at their numbers. When they set the miniumum number of spaces mandated for a barber shop, do the parking estimators actually go visit a reasonable sample size of local barbershops in various neighborhoods and count the free parking spots typically used?  No, according to Shoup (.pdf), they usually consult the book Parking Generation by the Instutute of Transportation Engineers.  The book does not suggest parking minimums, by the way; it simply contains data.  But here's Shoup on what it measures:

Because parking is free for 99 percent of all automobile trips in the United States, parking must be free at most of the ITE survey sites. Parking generation rates therefore typically measure the peak demand for parking observed in a few surveys conducted at suburban sites that offer ample free parking and lack public transit.

And even if the data were localized and representative, political machinations come into play.  These regulations are made operable by politicians and until recently officials were likely to hear only one type of complaint.  A home owner or an existing business complained about customers of a newer and/or successful business parking in a space that the folks with seniority considered their own, even though all curbside parking spaces are owned by the city, available first-come, first-serve to all.  (And when the government gives away valuable resources free of charge, first-come, first serve, what happens to that resource?)

Until recently, few stood up and complained that this middle-class entitlement of municipally-provided parking spaces had a downside beyond the revenue costs (which can be enormous and inhibiting for development).  Because of parking regulations, our neighborhoods are less densely-populated and contain fewer amenities we can walk to.  That's an expensive externality in my opinion, although it's probably dwarfed by the externalities associated with America's dependence on gasoline-powered automobiles-- foreign trade deficits, Middle East wars to protect our supply of oil and all that environmental harm.

So, read Shoup.  Once you have, I predict you'll agree that Shoup's description of a world with market-priced parking is the right goal.  And then you can help us with the heavy-lifting-- transitioning from this imperfect world to Shoup's utopia, pulling the appropriate political levers without coming off like the cultists we are.

(*There are two kinds of people in this world-- those who divide people into two groups and those who don't.)

Beijing Plans to Regulate Away Traffic Jams

The vice-mayor of Beijing whose portfolio included traffic has departed for Xinjiang as carbuyers rush to register new cars in advance of 2011 regulations.  While China Daily, the government's English language newspaper, touts the new curbs on government cars as well as plans to build more parking spaces and improve public transportation, the real story here is a new set of regulations limiting personal vehicles, which I'm going to take a stab at explaining even though I haven't yet found a suitable online source to link to.

But first, let me try to describe the regulatory environment in China in a couple paragraphs.  The judicial branch of government consists of people who have a wide range of levels of competence, but the entire branch-- judges, administrative regulators and police-- is still an arm of the Communist Party.  This lack of an independent judiciary means that enforcement of rules & regulation relies more on power relationships than on letter of the law.  (I know that's a little true about the United States or any other country, but it's an order of magnitude truer in China.)  A powerful person can get away with breaking a lot of rules as long as s/he doesn't offend another powerful person.

And there are a lot of rules & regulations-- so many that the police could never enforce them all, so they concentrate on answering complaints.  We refer to them as "peace officers" in the U.S., but that's a much more suitable description of the Chinese police who spend a lot of time seeking compromises between aggrieved parties (like folks in traffic accidents).  The police turn a blind eye toward small infractions like stickering sidewalks or unlicensed streetside vending.  However, they're notorious for enforcing one specific regulation designed to decrease the volume of traffic: one weekday each week, dependent upon your license plate number, you can't drive that car.   One day a week, an expensive machine sits in your parking garage unusable.

In 2011, Beijing (and I've only heard this word of mouth) will limit new municipal car registrations to about a third the number issued last year.  Hence, December saw a surge of new car buying.  Are the new regulations enforceable?  People believe the police will be able to spot drivers lacking a suitably-numbered Beijing license plate. 

Is there a more market-oriented solution available?  Yes, I believe so and unfortunately I have to throw the most hurtful insult possible at Beijingers: Shanghai handles this better.  In Beijing, car registrations cost about US$80.  Shanghai charges US$6800 per plate.  Roads are clogged, the air is polluted and something has to be done to limit traffic.  The choice is between highly disruptive & wasteful regulations or fees that can then be plowed into infrastructure like new roads and public transportation.  

Kinda Like Millennium Park

These folks were playing tennis on a parking garage roof last September.  Lotsa stuff you can do with parking garage roofs, but Chicago has the best one ever.

Beijing's Shoupistas Seek to Improve Parking Garage Pricing

One of the oddities of quickly-developing Beijing is that you often have to pay to park your bicycle while street parking is usually free.  I haven't seen any plans on the horizon to right that wrong, but according to the English-language China Daily, some municipal officials want to improve parking prices at garages.

The latest plan divides the city into three zones according to its level of congestion, with higher parking fees suggested for highly congested areas.

Under the plan, parking lots at street level will also be more expensive than those in underground facilities.

In some of the capital's busiest areas such as the Central Business District and Zhongguancun, parking fees will increase to 10 yuan an hour at street level for the first hour and 6 yuan for underground lots.

Terrific!  Those of us wise enough to follow Donald Shoup's thinking (and here's a seven minute video where he outlines his approach) would also like to applaud Wang Binsheng.  I've never met Mr. Wang, but I like this quote:

Wang Binsheng, from the Institute of Finance and Trade Economics under the Chinese Academy of Social Sciences, said increased parking fees are acceptable, but the price should be decided by the market.

He suggested that fee collecting rights at public parking lots should be put under the hammer so that the price of parking lots can be fully open to the adjustments of the market.

Right.  The city should try to price parking so that there are always about 15% of the spaces vacant.  That Shoupista approach delivers its own reward to drivers willing to pay the market price: an open space on your target block that you don't have to hunt to find.

(Photo is taken from the Center looking at Zhongguncun Road mid-morning on a Saturday when the air quality index hit the hazardous range.  While most Beijingers work on Saturdays, probably most of those drivers are shoppers, reveling in the new market economy.)

Park(ing) Day, 2009

Today is Park(ing) Day!  All around the world, folks are claiming parking spaces for more humane purposes.  Ah!  If only every day could be park(ing) day.

I'll be curling up later with my Shoup, dreaming about the way things ought to be.

Active Trans on the Parking Meter Lease

Active Transportation Alliance (formerly the Chicagoland Bicycle Federation) has posted this:

The privatization of Chicago’s parking meters puts the region’s future in a precarious position related to transportation, urban planning, congestion and overall quality of life, according to an analysis released today by the Active Transportation Alliance.

The analysis, “Unrealized Assets: How leasing control of parking meters limits the future of active transport and innovative urban planning,“ identifies the overarching impact: when the City gave up control of collecting revenue from parking meters, it also gave up all control of the public right of way on any streets with parking meters. See the full report here.

This limits any potential projects that use streets with metered spaces: bus rapid transit, bicycle lanes, street festivals, sidewalk expansion, streetscaping, pedestrian bulb-outs, loading zones, rush hour parking control, mid-block crossing, and temporary open spaces. The City’s ability to use streets in fresh, people-centric ways is now dictated, controlled and limited by the arrangements and penalties within the parking meters lease.

Take heart, though.  We've lost control for a mere 75 freakin' years.

Privatizing Parket Meters

Q: What would the Hyde Park Urbanist call $6.50/hour metered street parking in the Loop?
A: A good start.

Not that that's the only relevant consideration for the bill privatizing Chicago's parking meters.  My sympathies are with Ald. Preckwinkle and Ald. Hairston, though.  They refused to vote for it because the city council had only 72 hours to read and evaluate the bill.  And is $1.2 billion fair compensation to the city for 75 years of meter collection?

According to the Tribune, the City of Chicago collected a $18.9 million (net) from parking meters in 2007.  That represents less than 2% of the $1.2 billion sale price and if the city simply invested that infusion in a mutual fund (which the city isn't going to do), the return would have easily bested 2% without ever having to touch the principle.  So, my back of the envelope calculation is that this will represent more income for the City.

Of course, that hardly takes into consideration the money the City could have collected had we'd simply set the meters at market rates and collected the windfall ourselves.  On the other hand, the City had no intention of doing that.  So, this represents a backdoor method of pricing street parking about what it should be.  Still, I betcha the rates will end up as the worst possible of all political scenarios-- much higher but not high enough that there will be a vacant spot or two on every block.

Such half-measures would negate Felix Salmon's optimism:

Chicago should get much more than $1.157 billion in benefit from this deal. Underpriced on-street parking is the bane of many large cities' existence: it results in a huge amount of needless congestion as drivers circle around endlessly, looking for a spot to park. I wouldn't be at all surprised if the benefits from lower congestion are larger than the up-front cash that Chicago is receiving.

Like Barbara Kiviat at Time Magazine's Curious Capitalist blog, I don't like how the City is allocating the payout.  Far better IMO to limit the City to annual spending of the sale price/the length of the contract or some such, so this doesn't disadvantage the city's future revenue streams.  Seventy-five years is a long time.  And I would have preferred to see the city's commercial street parking divided up and auctioned off to several companies.  Nothing particularly complicated with splitting it up along the cardinal directions so that one company has the meters on the north side of streets, another on the south, etc.  Then companies then would be competing with each other very directly. 

The District of Columbia's neighborhood zoning concerns must be like ours because Matthew Yglesias writes:

In general, the market price of street parking should be very similar to the market price of garage parking. Since a garage is more secure and protected from the elements, that has certain advantages. But a street spot might be more convenient. So you’d be looking at rough similarity. And in parts of the city where there’s no viable market in garage building, that’s a market signal that parking demand is low and therefore street parking should be very cheap. But where garages are charging a lot, street parking should also be expensive. Among other things, that would reduce the need for new construction to be accompanied by expansive parking garages.

Perhaps more important, it would reduce the tendency for conversations about any new development to become immediately dominated by people’s fear of parking shortages. The whole shortage phenomenon is (as shortages tend to be) a symptom of bad pricing policy. Chicago is a big city with a vibrant downtown and tons of economic activity. Space is limited and expensive. Unless you charge more than a quarter for it, you’ll get shortages.

Not everyone feels this way, of course.  Did you know there was a blog all about parking issues and fighting parking tickets in Chicago?  Let me introduce you to The Expired Meter, where cheap street parking and the resulting shortages is more than just a tradition; it's a right:

But when you take this parking meter deal, and look back at what else the mayor has done to kick drivers in the ribs in 2008, it’s jaw dropping.

*Lowered the Denver boot threshold from three to a paltry two unpaid tickets.
*An additional 22% premium tacked onto unpaid parking tickets to cover the alleged cost of collections.
*Installing over 50 red light cameras in 2008, with at least another 50 for 2009, 2010 and 2011 reaching a goal of having red light cameras at a minimum of 10% of all city intersections.
*Initiating a plan to install cameras on all city street sweepers to nail drivers parked in violation of street cleaning bans.
*General increases to the cost of parking ticket fines.
*Increased parking enforcement and the planned hiring of 50 new parking enforcement aides.
*Increase in parking garage taxes.
*Converting all 4000 park district parking spaces into metered spaces.
*Adding 1,250 new metered parking spaces to the near west side.

When you look at all these policy changes implemented by Mayor Daley over the past 12 months, you can see that Chicago is the most anti-driver city in the entire U.S.

Well, when you put it that way, it almost makes it seem like Richard M. Daley is angling for the much-coveted Hyde Park Urbanist endorsement for king or dictator or something really powerful like Mayor of Chicago for life.

Hyde Park Urbanist Sexiest Man Competition

Not counting Donald Shoup, of course, it might well be Gordon Price.  I'll let Jude Galligan at Downtown Austin present the relevant argument:

In October I was fortunate to be included in a delegation of Austinites sent to Vancouver in order to learn about how they’ve managed rapid growth and become one of the most admired cities in the world. One of their council members, Gordon Price, delivered one of the most impassioned orations about smart urban planning.  He made one particular comment that struck me…

“Show me your parking ordinance, and I’ll show you what your city looks like!”

Jezebel bases their sexiest men list on a somewhat different set of standards-- a set I find it difficult to argue with, actually.

Matthew Yglesias: A Shoupista PowerVoice

(Update: Irene Sherr sent me this link to an article concerning a street parking plan that San Francisco will be trying out.  Note the Donald Shoup quote at the end.)

Think Progress blogger Matthew Yglesias gulps down the most delicious Kool-Aid ever and joins up with the Shoupistas:

...(T)o my way of thinking an enormous amount of good could be done if conservatives were more interested in applying really basic free market principles to transportation policy. For example, why not allow developers to build as much or as little parking as they want to build when they launch a new development? Why not charge market rates for curbside parking on public streets? How about fewer restrictions on the permitted density of development? Why not reduce congestion on the most-trafficked roads through market pricing of access? It happens to be the case that most of the people who are interested in these issues have liberal views on unrelated political issues, but the specific set of views at hand don’t draw on any deep ideological principles, it’s just application of basic economic thinking to the issues and, as such, is something that should be completely accessible to conservative politicians looking to show that conservative ideas can be relevant to the concerns (environmental concerns, quality of life concerns, economic growth concerns) of a set of people who are disinclined to think of themselves as conservatives.

Exactly.  I can come up with plenty of reasons to argue that the government should subsidize public transportation or education or health care, but parking?

Parking & Affordable Housing

More from Donald Shoup in The High Cost of Free Parking (p. 90):

In my own experience as a member of a Design Review Board for the Los Angeles City Planning Department, I reviewed the plans for all developments in Westwood between 1994 and 2003. I saw many projects where the parking requirements limited the floor space of a building, prevented changing its use, or disfigured its design...  (An example): a 19-unit building with 58 parking spaces (2.5 spaces per unit), exactly the number required by the zoning code. Because of the small site, two levels of underground parking were needed to satisfy the parking requirement. The small, two-level underground parking garage was very inefficient, with 520 square feet of garage floor area per parking space because the ramps, aisles, columns, stairs, and elevators occupied a high proportion of the area. The garage's construction cost was $80 per square foot, so the cost per space was $41,600 ($80 x 520), and the required parking added $104,000 to the cost of each apartment (2.5 x $41,600).  With an average apartment size 1969 square feet, the required parking added $53 per square foot to the apartment's construction cost ($104,000 divided by 1969). The project provided 54 square feet of parking for every 100 square feet of housing.

(Emphasis mine.)  Ok, that's an extreme case and there are other reasonable methods of allocating the costs, but I bet that few parking spaces in garages built these days cost less than $20K each.  The cost of city-required parking for new developments either is added on to the price of the abode or else the housing simply doesn't get built.  And the latter is deadly for affordable housing because more housing means more affordable housing-- from a simple supply and demand perspective. 

(The photo is of a random underground parking garage, not the example cited in the Shoup story.)