I’m Accused of Having a “Straw Man” Argument. Balderdash

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I’m Accused of Having a “Straw Man” Argument. Balderdash

I wrote this post last week. Basically I say that parking should pay its way and that so should rapid transit. A reader takes issue with my post and his points are important enough that I note them here:

JVH, I think you have a straw-man argument. First off, nothing in transportation is paid for by users, not even private car owners who drive on a private toll freeway, pay for a parking garage at work and park in their garage at home are paying the full costs. So it can’t be about ‘user fees’. The only way to gauge if the $4.50 rate is ‘too high’ is if people are electing not to park on those streets. If the occupancy is about 80% or so, it’s almost certainly an appropriate rate. Multiple studies of parking have shown that parking demand elasticity is relatively low, basically, even big increases in price produce only small changes in parking demand. Based on my calculations, the ‘market price’ for on-street parking in NYC is around $20/hr. Obviously that rate won’t happen, and it might not be that high in SF, but it’s likely higher than $4.50. Some of those of parking is still subsidized by the city. One only needs to look to Chicago to see what the ‘market’ does to parking prices. They sold off their parking meters to a private company who is planning to double or triple the on-street parking rate (it’s likely they would charge even more, but the lease provision gives the city some say in the final price). So, while expensive, even a $4.50 rate is almost certain to be an effective, and economically fair rate.

I disagree with you on almost everything you wrote, but let’s start with the “nothing in transportation is paid…” I suggest that airlines pay their way or go out of business. I do in fact pay for my garage at home. My guess is that private garages purpose built for providing parking, pay their costs and if not, are taken over by the bank. As for trying to calculate the market price, only the market can do that. Neither you nor I can predict what the market will do.

For instance – If the parking in the streets around Moscone center in SF costs $5 and hour and that generates an 85% usage so be it. That’s the rate. However if Billy Joel and Elton John are playing the stage at Moscone Center, those spaces would bring ten times that and still sell out. The market price isn’t set and forgotten. It changes by area, by time, by day. And must do so.

As for subsidizing rapid transit. Balderdash. The buses, roads, trains and the like should pay for themselves. Whether it’s through tolls or tickets, the folks riding on or over the roads, buses, or trains should pick up the costs. I can’t for the life of me understand why I should pay taxes so that some guy living in a ritzy part of the west valley in LA should be able to drive his Bentley to his office downtown. Nor, I think, should I pay for a workerbee who wants to live in West LA and wants to take a bus or train to a job in downtown LA. The private company now running parking in Chicago will quickly understand what the prices should be to maximize their usage. They will figure out how to change rates to attract customers to the on street parking. If they triple rates and the space goes half empty, they will understand that they need to lower their charges. Its how the market works, if it’s allowed to do so.

As I said in the piece.

I wrote this post last week. Basically I say that parking should pay its way and that so should rapid transit. A reader takes issue with my post and his points are important enough that I note them here:

JVH, I think you have a straw-man argument. First off, nothing in transportation is paid for by users, not even private car owners who drive on a private toll freeway, pay for a parking garage at work and park in their garage at home are paying the full costs. So it can’t be about ‘user fees’. The only way to gauge if the $4.50 rate is ‘too high’ is if people are electing not to park on those streets. If the occupancy is about 80% or so, it’s almost certainly an appropriate rate. Multiple studies of parking have shown that parking demand elasticity is relatively low, basically, even big increases in price produce only small changes in parking demand. Based on my calculations, the ‘market price’ for on-street parking in NYC is around $20/hr. Obviously that rate won’t happen, and it might not be that high in SF, but it’s likely higher than $4.50. Some of those of parking is still subsidized by the city. One only needs to look to Chicago to see what the ‘market’ does to parking prices. They sold off their parking meters to a private company who is planning to double or triple the on-street parking rate (it’s likely they would charge even more, but the lease provision gives the city some say in the final price). So, while expensive, even a $4.50 rate is almost certain to be an effective, and economically fair rate.

I disagree with you on almost everything you wrote, but lets start with the “nothing in transportation is paid…” I suggest that airlines pay their way or go out of business. I do in fact pay for my garage at home. My guess is that private garages purpose built for providing parking, pay their costs and if not, are taken over by the bank. As for trying to calculate the market price, only the market can do that. Neither you nor I can predict what the market will do.

For instance – If the parking in the streets around Moscone center in SF costs $5 and hour and that generates an 85% usage so be it. That’s the rate. However if Billy Joel and Elton John are playing the stage at Moscone Center, those spaces would bring ten times that and still sell out. The market price isn’t set and forgotten. It changes by area, by time, by day. And must do so.

As for subsidizing rapid transit. Balderdash. The buses, roads, trains and the like should pay for themselves. Whether its through tolls or tickets, the folks riding on or over the roads, buses, or trains should pick up the costs. I can’t for the life of me understand why I should pay taxes so that some guy living in a ritzy part of the west valley in LA should be able to drive his Bentley to his office downtown. Nor, I think, should I pay for a workerbee who wants to live in West LA and wants to take a bus or train to a job in downtown LA. The private company now running parking in Chicago will quickly understand what the prices should be to maximize their usage. They will figure out how to change rates to attract customers to the on street parking. If they triple rates and the space goes half empty, they will understand that they need to lower their charges. Its how the market works, if its allowed to do so.

As I said in the piece: If companies want to locate downtown and bring in workers from somewhere else, let them either pay their workers more money so they can buy tickets on the bus or train, or pay them more so they can live downtown and walk to work.

 

 

John Van Horn

John Van Horn

3 Responses

  1. Roads are paid for by drivers (private cars, commercial vehicles, transit, etc) through gasoline taxes and other fees required for the operation of a motor vehicle, and by users (transit riders, ride share passengers, cyclists, etc) through various sales taxes and other fees designated for road maintenance and/or construction. There is no one that does not use or beneift from our roadways, and there is no one that isn’t helping to pay for it. It would be impossible to determine every single individuals exact “pro-rata” share for their use of the roads, but it is an absolute fact that the roads are completely paid for by those that use or benefit from them. Including that argument in the debate about “market pricing” is absurd.
    Parking, riding transit or trains, airline travel and toll road use are all choices and the pricing on those should be market driven.

  2. How do drivers pay for the congestion they impose on other drivers, the local pollution they generate, the depressed land values around congested road segments, or the war missions abroad to ensure a steady flow of petrol?
    The gas tax covers all THAT and pays for maintenance and construction of roads? Not so much.
    I don’t think it’s hard, or a stretch, to visualize the societal benefit in diverting parking or other driving charges from motorists to transit, walking, and bike transport. Call it social engineering, if you want, but what sort of city do you want to live in?

  3. Roads are paid for by taxes and fees of all sorts, and those taxes and fees are paid by everybody that uses or “benefits” from the roads. I never said the roads were paid for exclusively by drivers, in fact I said that there was “no one that isn’t helping pay for it”. However, there is also no one that doesn’t benefit from the roads, whether they ever drive on them or not. If you are a hermit that never comes out of your apartment you still benefit from the roads whether it is from the deliveries that are brought to your door or the utility trucks that keep your electric and water services functioning. Everybody pays for the roads because everybody derives a benefit from them.
    I was making a point on market pricing and the statement that “nothing in transportation is paid for by users”. I wasn’t debating the pros or cons of the societal impacts of our addiction to driving.

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