Streetsblog San Francisco

Last week Streetsblog LA talked with UCLA Professor and parking guru Donald Shoup about ExpressPark, the new parking pricing system coming to downtown Los Angeles.

Damien Newton: Los Angeles is changing the way it does parking in its downtown. They’re calling it the ExpressPark system. Let’s start with the basics — what is the program and what are your thoughts?

Donald Shoup: For the first time they’re stating how they’re going to set parking prices. Instead of basing it on council decisions or emotions or people’s feelings, they stated a principal. Parking at a meter will be at the lowest price they can charge and still have one or two open spaces on every block.

If they get that price right, then those spaces will be well used because almost all the spaces will be full. Yet there will be spaces readily available because one or two spaces will be open.

Can it get any better than that as a goal for the parking system?

The key is, can you set the right price without looking at the results even though the results are what’s going to count when setting the price.

DN: This marks a shift in policy for the city that seemed to base parking decisions based on what brings in the most revenue.

DS: It hadn’t been about that even, until quite recently.

You may remember a few years ago they doubled the price of parking everywhere in the city with a minimum price of a dollar an hour. Since most meters were at a quarter an hour, that meant quadrupling the price at most meters. That was the first time meter prices had been changed in eighteen years.

There’s been a lot of neglect of parking meters. Inertia seemed to be the main factor in determining parking prices.

They’re changing that by saying, “Here’s the rule. If half the spaces on a block are empty, we’re going to lower prices. If all the spaces are full we’re going to raise prices.” Since the price change two years ago, I’ve seen entire blocks where there isn’t one car parked. The price is too high.

I think a lot of prices would go down if they extend express park to the whole city. They’re starting in downtown, but I suspect that some prices will go down.

DN: One of the tenets of “The High Cost of Free Parking” is that money collected from meters should be returned to the communities where it was collected. L.A.’s plan returns all metered funds to the general fund. Is that a mistake by the city? Does it give you any misgivings about the plan altogether?

DS: That’s what they’re planning in L.A., they’re not planning on funneling any of the money back to the neighborhood?

That’s a mistake. When you funnel back to the neighborhood you get local buy-in and you get wonderful results.

Pasadena returns all of the metered money back into the neighborhood for decades and they turned the local neighborhood that used to be a commercial skid row into one of the most popular shopping destinations in Southern California. The meters brought in an extra million dollars a year in public services in just that little shopping district. They replaced all the sidewalks, streetlights and street furniture. They cleaned up the allays. They put electric wires underground. This was all paid for by meters.

But that’s a political issue. I think that getting the price right is also very important.

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Streetsblog is pleased to present the third episode in UCLA planning professor Donald Shoup’s ongoing inquiry into whether the Cato Institute’s free market principles extend to the realm of parking policy. Read Shoup’s previous replies to Cato senior fellow Randal O’Toole here and here.

Dear Randal,

In your September 1 post on Cato@Liberty, you mentioned that the Cato Institute offers free parking to its employees.

I checked and found that not all employers in Cato’s neighborhood offer free parking. For example, consider National Public Radio, which is on Massachusetts Avenue three blocks from Cato. NPR charges all its employees the market rate for parking in the building. NPR has 125 parking spaces and it uses fair market prices to ration these scarce spaces among its 400 employees.

The different parking practices at NPR and Cato reveal quite different policy preferences. NPR prefers the free market while Cato prefers free parking.

Cato’s free parking severely distorts transportation prices. The market price of commuter parking in the commercial garage closest to Cato is $255 a month, so Cato’s free parking subsidizes the cost of driving to work by $255 a month. Because employer-paid parking is a tax-exempt fringe benefit, Cato pays the free parkers a tax-exempt subsidy of $3,060 a year ($255 x 12).

If the round-trip commute distance to Cato is 32 miles (the national average), and if commuters drive to work 22 days a month, Cato’s free parking reduces the cost of driving to work by 36¢ a mile ($255/22 days/32 miles). According to the American Automobile Association, the average operating cost of driving a car is about 18¢ a mile. Because the per-mile subsidy for parking is twice the per-mile cost of driving, Cato’s free parking reduces the out-of-pocket cost of driving to work by two-thirds. Free parking therefore grossly distorts market prices in favor of commuting by car.

In your campaign for market policies in transportation, I hope you will try to persuade the Cato Institute to charge market prices for parking, or at least to offer commuters the option to cash out their parking subsidies. Perhaps you might also write a post on Cato@Liberty about Congressman Earl Blumenauer’s bill (H.R. 3271) that would encourage many employers to offer parking cash out. I suspect that might even make the news on All Things Considered.

Donald Shoup
Department of Urban Planning
University of California, Los Angeles

In his magnum opus, The High Cost of Free Parking, UCLA Professor Donald Shoup argues that city parking managers will build merchant support for extending parking meter hours and pricing them according to demand if they return some or all of the extra revenue to the merchant corridors where it was collected.

By using the revenue to keep the sidewalks clean, beautify the streetscape, and generally improve shopping districts, cities like Old Pasadena have been able to win over skeptical business owners.

So what if San Francisco tried the same approach?

As Streetsblog reported last year, some merchants and community groups say they'd be more open to extended meter hours if there were direct improvements to the neighborhood as a result.

Shoup himself weighed in on the San Francisco Municipal Transportation Agency's (SFMTA) exhaustive parking study, praising its scope but pointing out that, from a political perspective, using the revenue to spruce up the street is crucial. "Everybody wants better bus service and more frequent bus service, but that's hard to see, especially if you're a struggling merchant," Shoup told Streetsblog.

"I think that it's easy to see very clean sidewalks, very well-policed sidewalks in front of your restaurant, rapid responses to any cracks in your sidewalks, maybe much more frequent cleaning," he added.

At the time, SFMTA Executive Director Nat Ford called such plans "pretty far down the line in terms of this discussion."

Recently, we asked Ford to give an update on his thinking about the idea.

"The answer is, our financial situation is so dire that I need to get every penny that we have," Ford responded.

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With the debate about parking meter rates and hours raging on both sides of the Bay, Streetsblog called UCLA Professor Donald Shoup, author of The High Cost of Free Parking and arguably the world's foremost parking expert, and asked him his opinion on the new San Francisco MTA parking meter study, which was released on Tuesday and calls for increasing meter hours in commercial districts where parking occupancy rises above 85 percent and where businesses are open late on weekdays and on Sundays.

Professor Shoup had read the study and called it "pathbreaking," lauding the MTA for being thorough and data-driven and for embracing occupancy targets for managing parking supply.

Professor Shoup also re-iterated the importance of Community Benefit Districts (CBDs) as a tool for selling parking reform to the public. In CBDs, a portion of the new meter revenue collected in commercial districts is returned to that district for sidewalk repair, street trees, enhanced street cleaning, etc., so that businesses can see firsthand how parking revenue improves their streets.

MTA Chief Nat Ford told Streetsblog his agency is not yet ready to have that discussion, and further complications arise because the Department of Public Works is responsible for maintaining sidewalks. How and when an arrangement between the two agencies would be brokered is anyone's guess.

Professor Shoup also pointed to Redwood City, Ventura, and Old Pasadena for best practice examples of occupancy-based parking policy changes that have revitalized neighborhoods and facilitated business. Read his full comments after the jump.

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The Oakland City Council voted early this morning to delay action on proposed parking changes until its next meeting. After three hours of discussion that spilled well beyond midnight, a proposal to roll back parking meter enforcement from 8 p.m. to 6 p.m. was narrowly defeated, despite calls for immediate action from dozens of merchants who attended the meeting.

In late June, the council voted to raise the parking meter rates by 50 cents to two dollars an hour, extend weekday meter enforcement to 8 p.m., and authorize more aggressive enforcement. Those changes have angered some residents and sparked cries from merchants that the new policies are hurting business.

Several councilmembers were skeptical of the options presented for making up the $900,000 budget gap the rolled-back enforcement hours would create, and requested a more detailed proposal from staff members. "Without an actual proposal for people to speak to, it's hard to say that staff will just come up with something," said Councilmember Rebecca Kaplan.

The rejected proposal, presented by Councilmembers Jean Quan, Patricia Kernighan and Council President Jane Brunner, would have made up for the gap with a mixture of a crackdown on handicap placard abuse, installation of parking meters in new areas, money saved from automating payment at city parking garages, opening up some city garages for paid residential use at night, and selling ad space on the back of parking receipts. Staff would have been directed to come up with ideas to cover the rest of the gap, which was still estimated at over $300,000.

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If the recent parking battle in Oakland had you thinking of UCLA Professor Donald Shoup, you're not alone.

After the Oakland City Council raised parking fines and extended parking meter hours to help balance the city's books, some merchants raised an outcry. Merchants, lead by Grand Lake Theater owner Allen Michaan, said the new policies were hurting business, and threatened to recall the entire City Council if the changes weren't rolled back.

Shoup, whose market-driven parking management theories are the inspiration for San Francisco's SFpark pilot program, told the East Bay Express the merchants may have some legitimate complaints about how the city made the changes:

First, the council shouldn't be using parking meters as a cash register for its general fund, [Shoup] said. "You shouldn't set the price to raise money, but to manage supply," he explained.

Second, the council is micromanaging when it sets parking meter prices for every district in the city, he said. Instead, the council should delegate those responsibilities to city staffers who then set prices based on how difficult it is to park. As a result, it makes no sense for parking prices to be the same in busy districts, such as Rockridge and Lakeshore, as they are in less crowded ones. In addition, parking meter prices should fluctuate during the day, based on how tough it is to find a place to park. It makes no sense, Shoup said, to charge the same price at 8 a.m. when stores are closed, as at 1 p.m., during the height of the lunchtime rush.

The East Bay Express also notes that San Francisco is making some not-so-Shoupian moves of its own with the SFpark program, including sending all revenue to the MTA instead of funneling a portion back to the districts that it originates from for streetscape and other improvements.