Many cities looking for a quick fix are contracting for the installation of the new high-tech parking meters, as well as adopting short-term parking management programs (e.g., Performance-Based Parking, Progressive-Rate Parking, etc.), believing that they will solve their parking problems, while creating a bonanza of cash from long-term meter lease deals.
While these programs and meters seem to offer a possible solution to the management of short-term metered parking, they do little to solve the problems of all parking, especially long-term. Realistically, metered curb parking spaces represent a small percentage of public parking space inventory, leaving out public and private commercial off-street lots and garages, as well as unmetered street spaces.
People assume that the lack of convenient curb parking spaces is due to a lack of metered spaces. However, the major cause of insufficient metered parking spaces is the competition between short- and long-term parkers for the same spaces. Long-term parkers include working commuters of all types, and urban residents who don’t have off-street parking.
Such parkers are faced with either paying as much as $34*(2) a working day for high-demand area garage parking, or “feeding” a CBD meter, where the cost can range from $2 to $6*(2) an hour. Not only do all-day parkers take spaces from hourly parkers in their search for the “hidden” open street parking space, but their “cruising” contributes to increased traffic jams, accidents, fuel consumption and air pollution, while at the same time undermining small-business owners whose employees take up the few metered parking spaces in front of their store, office or restaurant, turning away potential shoppers and dinners.
Unless a management program solves both short and long-term parking at the same time, the problems of urban parking will continue no matter what the next technology magic. Realistically, this is an urban planning management problem, not a technology problem.
In response to unaffordable all-day parking garages and lots, parking facility owners (both municipal and private) offer reduced deals such as “Early Bird” specials, which are still unaffordable for many working commuters or are blocks away from where they work.
Unfortunately, this results in the commercial parking businesses being stretched to the breaking point, with the further result of reducing budgets for maintenance and repair, management and cleaning staff, security, etc., in an attempt to save their small business.
For cities, it means having to subsidize public parking of all types, and in so doing, undermine the municipal budget, eventually resulting in having to raise either taxes or parking rates.
This subsidized system also undermines major city budgets, resulting in the loss of jobs. An underlying problem with the subsidized parking loss cycle is that most people fail to recognize the huge amounts of money involved, thinking instead of only the individual cost of a single parking space. Most fail to realize the staggering accumulative cost of subsidizing low-cost or free parking.
Perhaps the ultimate hidden truth of poorly managed parking is the public assumption that parking should be free, believing that their property taxes pay for that right. Nothing could be further from the truth. Why do people assume that street parking in urban residential neighborhoods should be free, but not question the payment of meters in a city’s downtown area or other high-parking-demand commercial or business area?
In the often-quoted urban planning book, “The High Cost of Free Parking,” *(1) Professor Donald Shoup of UCLA presents a cogent argument that assumes “free” parking is actually costing governments and institutions millions of dollars each year without their actually being aware of it. He estimates that it actually costs more than all of the roads in America or even the entire fleet of automobiles on the road today. Public parking in cities constitutes the third-highest hidden cost that U.S. cities face each year.*(1)
The obvious question is how could this be true? If one considers the different types of costs associated with parking, it begins to make sense. As an example, here is an estimate of the costs for subsidizing parking at a typical community hospital.
Land Costs:
a. The cost of land is derived by calculating the “opportunity” cost of the type of use that the property is zoned. With a hospital, it’s the square-foot value of the entire property zoned for hospital use. The average opportunity cost for hospital-zoned land in urban areas can range from $108 per square foot to more than $300, depending on the particular city, its location in the city, its size, and the number of patient beds and staff. Using the lowest possible land cost of $108 per square foot, each space would be valued at $108 x 330 SF per parking space, or $35,640 x the number of existing parking lot spaces at a typical community sized hospital, amortized over the life of the construction’s long-term mortgage.
b. Using the example provided in Shoup’s book, “If a 750-space parking structure built at UCLA on a site that had 200 surface spaces cost $12,777,000 or $23,200 per space, then the original 200 spaces cost (value) is $23,200 times 200 spaces, or $4,640,000,” *(1) for 1.5+ acres of land. The value of the existing surface parking lots at a typical hospital realistically needs to be estimated both in terms of its “opportunity” value or current market value, such as for additional professional medical office use or expansion of the hospital.
c. Existing parking lot construction costs – the original cost of each parking space and its periodical resurfacing or top course repaving, recommended every 5 to 10 years, depending on local climate.
Operational & Maintenance Costs categories*(2)
a. Salaries and benefits (cashiers, maintenance personnel, etc.)
b. Management and supplies
c. Security
d. Utilities
e. Routine maintenance
f. Structural maintenance
g. Equipment maintenance
h. Insurance, property as well as liability
i. Property taxes, if a privately owned facility
j. Other miscellaneous or unexpected expenses
The annual cost for these direct and indirect expenses varies from a single surface parking lot of $200 per year per space to $500 to $800 a year for a commercial garage.*(2)
External Costs *(1)
a. Congestion costs per monthly parking space = $73
b. Pollution costs – CO2, ground water contamination, = $44
c. Total external monthly costs per space = $117
Total Costs (per parking space): Monthly Annually
• Land “opportunity” cost $148.50 $1,782
w/20-year mortgage + interest
• Operational & maintenance costs 33.34 400
• External costs 117.00 1,404
Total costs (per parking space) $298.83 $3,586
A Typical Community Hospital’s
Actual Costs for Subsidizing its Parking:
For a typical community hospital with 125 beds and 950 employees in three shifts, not counting any associated private medical office building’s parking spaces, with at least 400 free parking spaces, employee and visitor parking is being subsidized at about $14.94 per day per space, $298.83 monthly, or $3,586 a year, for a total of $1,434,400 a year ($3,586 x 400 spaces).
While it can be argued that the “opportunity” costs are not real dollars, it can also be argued that they are, in fact, lost revenue – revenue that the hospital could be receiving but isn’t; in other words, lost opportunity dollars.
Conclusion
With the above recognizably gross estimate, one thing is certain: There is no such thing as “free parking.” The questions then are how does the average hospital, urban college or city substantially reduce or eliminate parking subsidization? How can subsidized parking become a continuing self-sustainable revenue source, instead of an ever-continuing
expense, without over-charging patients, staff or long-term or even short-term parkers? How can solving long-term parking help solve short-term parking?
The partly obvious answer is that hospitals, universities and cities cannot continue to provide free parking for everyone. Obviously, it would not be good business for hospitals to charge patients and visitors; on the other hand, all-day employee parkers who benefit most from free parking should reasonably pay an affordable fee.
Figuring out the best strategic plan for long-term parking
while being affordable and self-sustainable are the primary objectives, and challenge.
Contact Urban Planner Richard A. Gardiner, Founder and Principal of Gardiner Associates, at Ragala38@gmail.com.
While these programs and meters seem to offer a possible solution to the management of short-term metered parking, they do little to solve the problems of all parking, especially long-term. Realistically, metered curb parking spaces represent a small percentage of public parking space inventory, leaving out public and private commercial off-street lots and garages, as well as unmetered street spaces.
People assume that the lack of convenient curb parking spaces is due to a lack of metered spaces. However, the major cause of insufficient metered parking spaces is the competition between short- and long-term parkers for the same spaces. Long-term parkers include working commuters of all types, and urban residents who don’t have off-street parking.
Such parkers are faced with either paying as much as $34*(2) a working day for high-demand area garage parking, or “feeding” a CBD meter, where the cost can range from $2 to $6*(2) an hour. Not only do all-day parkers take spaces from hourly parkers in their search for the “hidden” open street parking space, but their “cruising” contributes to increased traffic jams, accidents, fuel consumption and air pollution, while at the same time undermining small-business owners whose employees take up the few metered parking spaces in front of their store, office or restaurant, turning away potential shoppers and dinners.
Unless a management program solves both short and long-term parking at the same time, the problems of urban parking will continue no matter what the next technology magic. Realistically, this is an urban planning management problem, not a technology problem.
In response to unaffordable all-day parking garages and lots, parking facility owners (both municipal and private) offer reduced deals such as “Early Bird” specials, which are still unaffordable for many working commuters or are blocks away from where they work.
Unfortunately, this results in the commercial parking businesses being stretched to the breaking point, with the further result of reducing budgets for maintenance and repair, management and cleaning staff, security, etc., in an attempt to save their small business.
For cities, it means having to subsidize public parking of all types, and in so doing, undermine the municipal budget, eventually resulting in having to raise either taxes or parking rates.
This subsidized system also undermines major city budgets, resulting in the loss of jobs. An underlying problem with the subsidized parking loss cycle is that most people fail to recognize the huge amounts of money involved, thinking instead of only the individual cost of a single parking space. Most fail to realize the staggering accumulative cost of subsidizing low-cost or free parking.
Perhaps the ultimate hidden truth of poorly managed parking is the public assumption that parking should be free, believing that their property taxes pay for that right. Nothing could be further from the truth. Why do people assume that street parking in urban residential neighborhoods should be free, but not question the payment of meters in a city’s downtown area or other high-parking-demand commercial or business area?
In the often-quoted urban planning book, “The High Cost of Free Parking,” *(1) Professor Donald Shoup of UCLA presents a cogent argument that assumes “free” parking is actually costing governments and institutions millions of dollars each year without their actually being aware of it. He estimates that it actually costs more than all of the roads in America or even the entire fleet of automobiles on the road today. Public parking in cities constitutes the third-highest hidden cost that U.S. cities face each year.*(1)
The obvious question is how could this be true? If one considers the different types of costs associated with parking, it begins to make sense. As an example, here is an estimate of the costs for subsidizing parking at a typical community hospital.
Land Costs:
a. The cost of land is derived by calculating the “opportunity” cost of the type of use that the property is zoned. With a hospital, it’s the square-foot value of the entire property zoned for hospital use. The average opportunity cost for hospital-zoned land in urban areas can range from $108 per square foot to more than $300, depending on the particular city, its location in the city, its size, and the number of patient beds and staff. Using the lowest possible land cost of $108 per square foot, each space would be valued at $108 x 330 SF per parking space, or $35,640 x the number of existing parking lot spaces at a typical community sized hospital, amortized over the life of the construction’s long-term mortgage.
b. Using the example provided in Shoup’s book, “If a 750-space parking structure built at UCLA on a site that had 200 surface spaces cost $12,777,000 or $23,200 per space, then the original 200 spaces cost (value) is $23,200 times 200 spaces, or $4,640,000,” *(1) for 1.5+ acres of land. The value of the existing surface parking lots at a typical hospital realistically needs to be estimated both in terms of its “opportunity” value or current market value, such as for additional professional medical office use or expansion of the hospital.
c. Existing parking lot construction costs – the original cost of each parking space and its periodical resurfacing or top course repaving, recommended every 5 to 10 years, depending on local climate.
Operational & Maintenance Costs categories*(2)
a. Salaries and benefits (cashiers, maintenance personnel, etc.)
b. Management and supplies
c. Security
d. Utilities
e. Routine maintenance
f. Structural maintenance
g. Equipment maintenance
h. Insurance, property as well as liability
i. Property taxes, if a privately owned facility
j. Other miscellaneous or unexpected expenses
The annual cost for these direct and indirect expenses varies from a single surface parking lot of $200 per year per space to $500 to $800 a year for a commercial garage.*(2)
External Costs *(1)
a. Congestion costs per monthly parking space = $73
b. Pollution costs – CO2, ground water contamination, = $44
c. Total external monthly costs per space = $117
Total Costs (per parking space): Monthly Annually
• Land “opportunity” cost $148.50 $1,782
w/20-year mortgage + interest
• Operational & maintenance costs 33.34 400
• External costs 117.00 1,404
Total costs (per parking space) $298.83 $3,586
A Typical Community Hospital’s
Actual Costs for Subsidizing its Parking:
For a typical community hospital with 125 beds and 950 employees in three shifts, not counting any associated private medical office building’s parking spaces, with at least 400 free parking spaces, employee and visitor parking is being subsidized at about $14.94 per day per space, $298.83 monthly, or $3,586 a year, for a total of $1,434,400 a year ($3,586 x 400 spaces).
While it can be argued that the “opportunity” costs are not real dollars, it can also be argued that they are, in fact, lost revenue – revenue that the hospital could be receiving but isn’t; in other words, lost opportunity dollars.
Conclusion
With the above recognizably gross estimate, one thing is certain: There is no such thing as “free parking.” The questions then are how does the average hospital, urban college or city substantially reduce or eliminate parking subsidization? How can subsidized parking become a continuing self-sustainable revenue source, instead of an ever-continuing
expense, without over-charging patients, staff or long-term or even short-term parkers? How can solving long-term parking help solve short-term parking?
The partly obvious answer is that hospitals, universities and cities cannot continue to provide free parking for everyone. Obviously, it would not be good business for hospitals to charge patients and visitors; on the other hand, all-day employee parkers who benefit most from free parking should reasonably pay an affordable fee.
Figuring out the best strategic plan for long-term parking
while being affordable and self-sustainable are the primary objectives, and challenge.
Contact Urban Planner Richard A. Gardiner, Founder and Principal of Gardiner Associates, at Ragala38@gmail.com.
* References:
1) Donald Shoup, “The High Cost of Free Parking,” (2005), American Planning Association, Chicago. Chapters 7 and 13.
2) “Parking in America,” the NPA’s first “Review of Parking Rates in the U.S. and Canada” (September 2008), National Parking Association, Washington, DC.
