Market-Rate Parking


Michael Perkins explains a small advance in the march toward parking sanity:

At meters in “premium demand zones,” parking time limits won’t apply after 6:30 pm. Drivers still have to pay for parking after that time, but can park for any amount of time. Premium demand zones include Adams Morgan, Georgetown, Chinatown, U Street, Friendship Heights, downtown, the Mall, and the waterfront area.

This is really great news. Parking time limits make little sense when your customers are out for a night of entertainment. It is better to have parking availability driven by appropriately set prices rather than force the turnover that time limits produce at a time when turnover isn’t as desirable.

Time limits are expensive to enforce, requiring near-constant supervision by parking control officers. If the city enforces time limits too aggressively, the perception is that the enforcement is too harsh. But if the enforcement is too lax, then spaces are not available for use. By enforcing meter payment only, enforcement is easier and ticketing is somewhat more objective: you either have paid or you haven’t.

Over the past forty years we’ve seen a huge increase in the scope of activities for which public policy now recognizes that prices, rather than regulatory rationing, are the best way to allocate scarce resources. Parking spaces remain a sad exception to that rule. Consequently, people have become accustomed to the state of affairs where in certain areas of most cities it’s “hard to find a parking space” and the idea that parking shortages should be solved through rationing procedures like time limits. If someone proposed price controls for Diet Coke or TV screens or anything else, almost everyone nowadays would immediately recognize the shortage/rationing problems that would swiftly arise. But it’s rare for people to extend the insight and recognize that systemic parking shortages and efforts to curb them via regulatory rationing represent a failure to price parking appropriately.

The fact is, however, that your city should no more suffer from parking shortages than it suffers from bread shortages. If demand is high and supply limited, the consequence ought to be expensive parking, with the expensive parking providing valuable revenue that allows the city to cut taxes or improve services.