How Much Do You Charge for On-Street Parking?

May, 2009

Dr Shoup: I was doing some math on our parking spaces here in Portland and comparing it with off-street rates. At our current on-street rates ($1.25/ hour), if one could park for eight hours every weekday all year (less holidays, of course), it would result in a monthly rate of $209. In our city, a reserved, off-street space is $185 per month.
On the face of it, this seems to be very market-based, with on-street rates exceeding those in private off-street lots. We have generally high occupancy (85%-95% midday) and are discussing supplemental rate increases in those with highest occupancy. It is here that I should state that all meter revenue, including citation revenue, generated in Portland goes into the Transportation general fund not the city general fund, and so supports street lighting, traffic signals, street sweeping and all the other services that our office of Transportation provides.
The supplemental rate increases aren’t exactly the variable, up and down, variety I’ve read so much about in your e-mails and articles (essentially, there’s no down). However, I’ve at least broached the idea of variable rates, particularly paralleling our garage rate structure. Publicly owned garages are by policy dedicated to customer rather than commuter parking, so rates hold steady at $1.25/hour for the first four hours, then escalate hourly, with a daily maximum limit ($10-$12, depending on the garage).
Regards, Keith Ehrensing, City of Portland.
Keith: Thanks for your message. Portland is, as usual, way ahead of most other cities in its transportation and parking policies. Nevertheless, even Portland could improve its curb-parking policies.
In response to your question about meter rates, I would compare Portland’s meter rate ($1.25 an hour) with the price per hour in the nearby off-street spaces. Specifically, I would compare the meter rate with the price of the first hour of off-street parking. This is the comparison that drivers make.
Comparing the cost of parking for a month at a meter with the monthly rate for off-street parking is not relevant because nobody pays for parking meters by the month. Since curb parking is more convenient than off-street parking, the meter rate will probably have to be higher than the price per hour for off-street parking in order to create a few curb vacancies and eliminate the incentive to cruise.
The San Francisco Municipal Transportation Agency (SFMTA) seems to be doing the most advanced work on adjusting meter rates to achieve transportation, environmental and economic goals. For example, look at pages 8 and 9 in the document at http://www.its.ucla.edu/shoup/SFpark8-6-08.pdf.
One great advantage of the SFMTA’s approach to setting meter rates is that the city has adopted a pricing principle – charge the lowest price necessary to ensure availability of curb parking spaces – to justify the rates. Most other cities follow no principle in setting meter rates, and no one can explain the process.
A recent analysis of meter rates in Los Angeles, for example, found that 81% of the city’s meters had not had a rate adjustment since 1990. The city’s response this year was to double all meter rates throughout the city. This abrupt increase has led to a political backlash, and the City Council cannot explain or justify the new rates.
The Los Angeles Department of Transportation staff had recommended setting meter rates to guarantee availability of curb parking, but the City Council rejected this advice and simply doubled the meter rates to generate more revenue. The LADOT’s recommendation for setting meter rates in response to demand is on page 2 of the document at: http://www.its.ucla.edu/shoup/LADOT_ParkingMeterTechnologyProgram.pdf.
Here is the link to an op-ed commentary in The New York Times that explains the advantages of performance parking, and the disadvantages of underpriced curb parking: http://www.nytimes.com/2007/03/29/opinion/29shoup.html?ex=1332820800&en=cdabf3ece6c4a862&ei=5088&partner=rssnyt&emc=rss.
Finally, here is the link to a recent article that makes the case for performance parking prices: http://parkingtoday.com/topstory.php.
If your are on Facebook, there is a group focused on parking policies at this link: http://www.facebook.com/group.php?gid=70015940360. The members often post news about cities that have adopted performance parking prices.
Don Shoup
Note: Go online to www.parkingtoday.com and click on the cover image of this issue. You will find this article in the online version of PT; all the links are hot.