Parking - Economics of Parking

Economics of Parking

In congested urban areas parking of motor vehicles is time-consuming and sometimes expensive. Urban planners must consider whether and how to accommodate or 'demand manage' potentially large numbers of motor vehicles in small geographic areas. Usually the authorities set minimum, or more rarely maximum, numbers of motor vehicle parking spaces for new housing and commercial developments, and may also plan its location and distribution to influence its convenience and accessibility. The costs or subsidies of such parking accommodations can become a heated point in local politics. For example, in 2006 the San Francisco Board of Supervisors considered a controversial zoning plan to limit the number of motor vehicle parking spaces available in new residential developments.

In the graph to the right the value above the line represents the out-of-pocket cost per trip, per person for each mode of transportation, the value below the line accounts for subsidies, environmental impact, social and indirect costs. When cities charge market rates for on-street parking and municipal parking garages for motor vehicles, and when bridges and tunnels are tolled for these modes, driving becomes less competitive in terms of out-of-pocket costs than other modes of transportation. When municipal motor vehicle parking is underpriced and roads are not tolled, the shortfall in tax expenditures by drivers, through gas tax and other taxes amounts to a very large subsidy for automobile use. The size of this subsidy for cars dwarfs the federal, state, and local subsidies for the maintenance of infrastructure and discounted fares for public transportation.

Where car parking spaces are a scarce commodity, and owners have not made suitable arrangements for their own parking, ad hoc overspill parking often takes place along sections of road where there is no planned scheme by a municipal authority to formally allocate roadspace to the car. Heated social discourse sometimes revolves around the sense of "ownership" that informally arises amongst individuals displaying overspill parking behaviour. For example, during the winter of 2005 in Boston, the practice of some people saving convenient overspill roadway for themselves became controversial. At that time, many Boston regions had a tradition that if a person shoveled the snow out of a roadspace, that person could claim ownership of that space with some kind of marker (e.g. a chair or orange cone) in the space. However, city government defied that custom and cleared markers out of spaces. Indeed, parking space in Boston is such a rare commodity that in 2009 a single parking space in the Back Bay neighborhood sold for $300,000.

Festivals and sporting events often spawn a cottage industry of parking. Homeowners, schools, and businesses often make extra money by charging a flat-rate fee for all-day parking during the event. In some countries, such 'cottage industry parking has become large-scale business. The UK airport parking industry is currently estimated to be worth 1.3 billion GBP per year.

According to the International Parking Institute, "parking is a $25 billion industry and plays a pivotal role in transportation, building design, quality of life and environmental issues"

Some airports charge more for parking cars than for parking aircraft.

Parking control is primarily an issue in relatively densely populated and relatively advanced countries where the demand/supply situation for parking spaces makes parking facilities dear and difficult. In urban locations parking control with corresponding professionals and firms specialising in this is a developing subject. Parking restrictions take the form of: A. Public parking control B. Private parking control Local government as opposed to central government is the primary activator in public parking. The emphasis is on restriction of on-street parking facilities and in fact incomes from parking charges and fines are often major income sources for local government in North America and Europe. Typically, communication about the status of a roadway for parking takes the form of notices, e.g. fixed to a nearby wall and or road markings. Part of the requirements for passing the driving test in some countries is demonstrated ability to understand parking signs. Motorists parking on-street in big cities often have to pay for the time the vehicle is on the spot. There are fines for overstay. The motorist is often required to display a sticker beneath the windscreen indicating that he has paid for the parking space usage for an allocated time period. Private parking control includes both residential and corporate property. Owners of private property use initially signs indicating that parking facilities are restricted to certain categories of people such as the owners themselves and their guests and vehicles belonging to a company’s staff members and its permitted contractors only. Time and experience has shown that simply communicating a parking restriction and a workable deterrent are necessary. The deterrent can take physical forms such as vehicle immobilisation exemplified by the wheel clamp and non-physical forms such as levying parking charges to the registered vehicle owners. The British company Flashpark has innovated a non-physical parking control that involves charging the vehicle owner on behalf of the property owner by utilising the Internet and digital photography. It is probable that this method will spread and become worldwide.

In both public and private grounds physical methods are legion and include: parking bollards, parking poles that swivel from horizontal to vertical, gated entry and exit with time-dependent charges for space utilisation with payment of the same as the condition for exit and electric gates. This is an expanding subject.