The Doctor Responds ...
May, 2008Dr. Donald Shoup of the University of California Los Angeles has copied Parking Today on a couple of responses to organizations he has advised on market pricing. “Parking’s Professor” minces no words. The context is self-explanatory. The first is responding to the New York City Department of Transportation’s “concerns” about wasteful vacancy targets. The second responds to a question from an aide to a Los Angeles City Council member. Editor
NYDOT: Wasted Parking
Unsurprisingly, I disagree with NYC DOT’s argument that a vacancy target for curb parking is “wasteful.” I also disagree with its argument that an adequate turnover target for curb parking is functionally equivalent to a 15% vacancy target. Vacancy targets for curb parking (such as that 15% of curb spaces should be vacant and available for motorists who want to park) may seem wasteful because some of the spaces will not be occupied by cars. Would 100% occupancy be more efficient because 15% of the curb spaces would not be “wasted?”
Keeping a few curb parking spaces vacant is like having inventory in a store. A city can reduce the price of curb parking if too many spaces are vacant (too much inventory), and increase it if too few spaces are vacant (too little inventory). Customers avoid stores that rarely have anything in stock, and in the same way, curb parking is much less useful to drivers if they have to circle the block waiting for a parked car to leave.
Bruce Schaller’s study in the SoHo district of Manhattan showed that fully occupied curb parking is extremely wasteful because drivers must cruise for a curb space. This cruising wastes drivers’ time, wastes scarce fuel, and pollutes the air that all the pedestrians in the neighborhood are breathing. Can anything be more wasteful and harmful than cruising for curb parking in New York? Schaller’s study demonstrated that New York’s current curb parking policy is astonishingly wasteful.
Ideally, if the city were somehow able to make sure that the departures of cars parked at the curb were perfectly coordinated with the arrival of drivers who want to park at the curb, no one would have to cruise. But how will the NYC DOT achieve this result? Just as important, how will NYC DOT measure whether the turnover is sufficient to make cruising unnecessary?
All merchants understand the value of inventory in a store, and goods that “sit on the shelves” are not wasteful. Indeed, they are essential for commerce. One could imagine an ideal system where goods are delivered to a store exactly when customers want to buy them, but this is just as absurd as imagining that the NYC DOT can ensure that cars depart from curb spaces just when drivers want to park.
One great advantage of a target vacancy rate is that everyone can see whether NYC DOT is achieving the target set for it. With a target turnover rate, how will anyone hold it accountable for achieving the target set for it? Does the NYC DOT intend to reach a turnover rate that eliminates cruising? If so, how fast will this turnover rate have to be?
The NYC DOT seems complacent about the waste and harm caused by its current parking policies. If the merchants in a business district want to set a target vacancy rate for their curb parking spaces, it seems inappropriate for city bureaucrats to refuse on the grounds that this policy would be “wasteful.”
Consider the pilot zone performance parking policy that members of the Washington, DC, Council recently unanimously adopted. Section 3(c) states: “... the Mayor shall adjust fees to achieve 10% to 20% availability of curbside parking spaces.” This is the target vacancy rate.
Section 2 (d)(2) states that the meter rates will not increase “by more than $0.50 in any one-month period, or more than once per month.” The meter rates will therefore adjust gradually to achieve the target vacancy rate.
Section 5(c) states that after paying for installing the meters, 75% of the meter revenue in the pilot performance parking zone “shall be used solely for the purpose of non-automobile transportation improvements in that pilot zone.”
Even if NYC DOT doesn’t want to make any changes in its curb parking policies now, it should carefully examine the results of Washington’s performance parking experiment. Perhaps NYC DOT could conduct its own pilot program to see if it can eliminate cruising by targeting the turnover rate.
Los Angeles: Raising Meter Rates
Thanks for calling the meeting at City Hall to discuss demand-based parking meter rates. I was delighted to learn that the Los Angeles City Council is considering a plan to set meter rates to achieve about 85% occupancy for the curb parking spaces.
You asked whether significantly higher meter rates will be politically acceptable. I think the rate increases will be politically acceptable if they are gradual. The city should charge the lowest meter rates that will achieve about 85% occupancy in the curb spaces on each block. Since we don’t know what these rates are in advance, the only way to set them is through trial-and-error, or “successive approximation.”
Suppose the city adjusts meter rates every three months. If in the previous three months the average occupancy on a block was more than 95% during some hours of the day, then during those hours the meter rates could increase by 25 cents. If the average occupancy was less than 75%, meter rates could decrease by 25 cents. If the average occupancy was between 75% and 95%, the meter rates would stay the same. Starting from the current meter rates, the periodic adjustments would continue until occupancy at all hours is between 75% and 95%.
The price adjustments will be more acceptable if they are slow. Higher prices can even be politically popular if the city uses some of the added meter revenue to pay for added public services on the metered blocks. Underpriced parking encourages drivers to cruise around searching for rare vacant spaces, and this cruising increases traffic congestion, air pollution, accidents and carbon emissions. Underpriced parking will also reduce the funds available to pay for neighborhood public services. Added public services in each metered neighborhood is the political key to gain neighborhood support for demand-based meter rates. Neighborhood leaders will buy into the market rates if they benefit from the meter revenue.
The curb spaces will be both well-used (85% of the spaces will be occupied) and readily available (15% of the spaces will be open for new users) all the time. If merchants understand that market prices will encourage turnover, and that the resulting revenue will improve their public services, they will probably support the market prices.
The technology to do all this is readily available. UCLA’s new parking meters don’t show any prices until you touch a button on the meter. The display screen then shows how much you will pay for the length of time you want, and you can pay with a credit card or cash. The price can be changed remotely, and the prices are lower (but not free) in the evening. It’s that simple, and no one complains. Instead, people are relieved finally to see some vacant spaces available in the most convenient spots on campus.
If the city of Los Angeles installs new meters and starts the gradual adjustment process, prices will move slowly enough to avoid shocking anyone. The result will be sensible, demand-based meter rates everywhere, at all times. Given the transient nature of curb parking, most people will not remember when prices were lower. Drivers are accustomed to paying more for parking in higher-demand areas, and off-street parking is generally available in areas where curb parking is scarce, so the higher meter rates will affect only the small share of drivers who park on the street.
The goal is not to get the meter rates exactly right. Instead, the goal is to get the meter rates less wrong. Most people will probably accept demand-based meter rates that adjust gradually and automatically- once the City Council sets the goal of achieving about 85% occupancy and spends some of the meter revenue to improve public services in the metered districts.
Donald Shoup can be reached at firstname.lastname@example.org.