The Seven Ways We Pay For Free Parking

Several weeks ago, when I was in Manhattan at 6 pm, I squared around one block on the upper east side maybe a dozen times. I had the time and was not going to pull into a parking lot. My objective was a free or a muni-meter spot. I finally found the meter.

So, I used up gas, increased emissions and congestion, wasted time, and perhaps endangered pedestrians. We could also add that I imposed a cost on tax paying non-drivers who have to maintain city streets and even necessitated car-based development that drained money from the poor.

Thinking economically, I guess I have to admit that my inexpensive parking space cost a lot more.

According to UCLA economist Donald Shoup’s estimates, in just one 15 block area of Los Angeles during one year, motorists used an extra 47,000 gallons of gasoline and emitted 730 tons of CO₂ when they drove 950,000 extra miles looking for parking spaces. He suggests though we should not blame the drivers. Instead, municipalities need to create new incentives.

Washington D.C.’s Parking Plans

Following Dr. Shoup’s advice, Washington D.C. will soon implement a new parking initiative. In an area with 1,300 metered spots, dotted by theaters, restaurants, offices, government buildings and perpetually circling vehicles looking for parking, heretofore free and cheap parking spots will all get a price based on demand. A variable pricing approach, the system’s goal is to always have one open space on each block. While the Washington Post says the program will include numbered spots so you can pay on your smart phone or on the street and real time information about availability, the pricing has not been nailed yet.

San Francisco’s Variable Pricing Results

Meanwhile, San Francisco recently published the results of its variable pricing pilot program. Chock full of data and graphs in more than 140 pages, the SFpark pilot project report basically indicated that emissions, congestion and commercial activity all improved because of variable parking space pricing.

The rate changes were implemented once every eight weeks or so from August 2011 to June 2013. These were the specifics that I’ve copied from the report:

• When occupancy was 80–100%, the hourly rate increased by $0.25.
• When occupancy was 60–80%, the hourly rate was not changed.
• When occupancy was 30–60%, the hourly rate decreased by $0.25.
• When occupancy was less than 30%, the hourly rate decreased by $0.50.

This is just one result:

From: SF Park via Vox

Our Bottom Line: Negative Externalities

An externality is the impact of a behavior or contract that is experienced by a third uninvolved party. When the impact on third parties is undesirable, as with cheap parking, the result is a negative externality. Associated with economist Arthur Pigou, Pigovian taxes can increase the cost and thereby decrease the incentive of creating negative externalities. I guess we could say that variable metered pricing is rather Pigovian.

And finally…the seven ways (the externalities) we pay for cheap parking?

• more gas
• increased emissions
• more congestion
• wasted time
• endangered pedestrians
• maintaining city streets for cars
• development that targets autos rather than mass transit