Cool ways to use parking meter revenue
By Chrissy Mancini Nichols
Mar 16, 2012
This post first appeared at metroplanning.org
Did You Know? In Portland, Ore., revenue from parking meters in districts served by streetcars funds one-third of streetcar operating expenses.
Chicago’s annual parking meter rate increases may seem steep, but what if those revenues funded more and better transit options and community improvements – improvements you could actually experience, like bike racks, expanded transit service, streetscaping, lighting, and better signage?
Donald Shoup, the nation’s foremost parking expert, has long argued that getting parking pricing right matters – for a host of reasons: to help manage demand for spaces, reduce traffic congestion and pollution, and create a new revenue stream to fund neighborhood enhancements. Shoup’s theory is based on the following principle: When parking is priced too low, demand exceeds supply, causing drivers to circle the block looking for a space. All of these idling cars add up to clogged streets and dirty air. Instead, Shoup recommends setting an appropriate price for parking – which varies, depending on the market – to create 15 percent parking availability at all times. So if someone chooses to drive, he can quickly find a spot, while others will choose to forgo the parking expense and take transit, walk, or ride their bikes instead, reducing overall congestion. Shoup also argues that cities must dedicate revenues from parking meters to local neighborhoods. This strategy gains business owners’ and residents’ support for the higher cost of parking and provides neighborhood improvements without tapping existing budgets.
Shoup’s case study for parking pricing is Old Pasadena, a former retail and business core in the heart of the city. Old Pasadena had slowly declined, “…in part because of lack of public investment and parking shortages.” Employees of local businesses took up free curbside spots, which made it even more difficult for customers to park. When city staff proposed installing meters to regulate parking, merchants and property owners were opposed, assuming it would drive away customers who would instead shop at suburban malls with free parking. To earn the business community’s support, the city agreed to spend all meter revenues on public improvements in Old Pasadena. In the first year parking meter revenues yielded $1.2 million (after collection costs), which paid for street furniture, trees, historic lighting, sidewalk cleaning, and security. As a result of available parking and improved streetscaping, local retail sales flourished. Compared with the rest of the city, Old Pasadena sales tax revenues grew more than other retail districts, including those with free parking.
In 2008, Washington, D.C., implemented parking meter pilots in the Columbia Heights and Capitol Hill/Ballpark neighborhoods. The pilots were based on the idea that people don’t come to high-traffic areas to park; they come to work, shop, dine and play. Meter rates are variable, adjusted by day of week and time of day to achieve 85 percent occupancy rates (15 percent vacancy rates, per Shoup’s recommendation). Once the initial infrastructure costs are repaid, 75 percent of revenues go back to the community. In FY 2010, more than $600,000 was collected in the pilot areas to fund a number of neighborhood improvements, such as benches, signage, ornate bike racks, information hubs, bike sharing stations, and solar trash compactors. Due to the success of these two pilots, this month a third performance based parking plan will be implemented in the H Street, NE neighborhood.
In Barcelona, Spain, 100 percent of net revenues generated from parking meters support the city’s bike share program. Boulder, Colo., generates $1 million annually from parking meter revenues to fund a Parking Benefit District that pays for streetscaping. In San Diego, Cali., 45 percent of parking meter revenues is returned to the districts where it is collected for neighborhood and business improvements. San Francisco dedicates parking meter revenues and fines to support transit. In FY 2010, this accounted for $228 million for the San Francisco Municipal Transit Agency.
In Chicago Mayor Rahm Emanuel’s proposed 2012 budget, Chicago took a cue from these cities, passing a “congestion premium” for downtown parking garages and lots in the Loop. With congestion costing Chicago area residents more than $7.3 billion a year, the parking fee, designed to encourage and improve transit use, was welcome news. The $2 fee provides a transportation choice: Pay a fee to park in Chicago’s congested downtown, or take transit. Importantly, revenues generated by this fee will support transit improvements, including a new CTA Green Line station, Bus Rapid Transit, and bike infrastructure.
Chicago could go a step further by exploring the implementation of variably priced parking by time of day and day of week in Chicago’s neighborhoods. An analysis would be needed to determine if additional revenue capacity exists; if so, this additional money could be invested in transit improvements and enhancements to the pedestrian environment in commercial corridors. It’s not hard to imagine that if neighborhoods got to keep some of the parking meter revenues for transit and public improvements, Chicagoans’ perspective on its parking meters just might change.