Davis: Old Town Scottsdale parking solution needs to be market driven

We all want to park free at everyone else’s expense.

Daniel Davis

A recent article in the Phoenix Business Journal entitled “Free Parking: Scottsdale looks for high-tech, innovative future for Old Town, downtown parking” described proposed technological solutions to Old Town’s parking woes.

Parking is America’s No. 1 land use, so it’s great this journalist is addressing parking policy. Unfortunately, this article did not address market-based solutions. There is a high cost of free parking, and switching to a market-priced system for Old Town makes financial sense.

Even if parking is free, someone does pay for it. The cost to provide parking is packaged into higher costs in other goods and services. For example, you might end up paying for parking when you pay for groceries, whether you drove or not. This is a hidden subsidy all of us pay to motorists, even if we took the bus, biked or walked.

Free parking is a subsidy for the richest of us; those with the most cars. To me this sounds like socialism for the rich. As economist and urban planner Donald Shoup puts it, “Staunch conservatives often become ardent communists when it comes to parking.”

We all know that car trips also have external costs. CO2 emissions, pollution, encouraging sedentary lifestyles, injuries and fatalities. You all probably know a friend or family member killed or injured in a motor vehicle collision. In fact the leading cause of death in children older than 1 year old, according to the CDC, is motor vehicle collisions, so it makes no sense for our society to subsidize car travel with free parking.

Furthermore parking makes for unproductive land in terms of taxes. We tax developed land at higher rates than undeveloped land. Parking as a land use is not considered developed. Putting in all that parking spreads out our city, (meaning more feet of pipe, electrical wires, and road to maintain), but less taxes being gathered for the city. That means more stuff to maintain, but less money for the city to pay for that maintenance; more liabilities and less assets. The firm Urban3 has demonstrated that places with less parking are more productive for city’s tax rolls.

Overlying our parking woes is something called “parking minimums.” Parking minimums are laws requiring developers to build specified amounts of free parking spots. These parking minimums are often totally arbitrary and inflate the costs of building housing and commercial developments. It takes a huge amount of land and capital to fulfill these parking minimums, thereby stopping small entrepreneurs from starting their businesses.

Donald Shoup, an urban planner and economist at UCLA and author of the “High Cost of Free Parking” has described some of the key elements to an effective parking policy. He explains that it is critical to get the cost right with market pricing; a market price for parking is the lowest price possible to keep a few spots open. In addition, all profits need to be returned to the neighborhood or business district, and not into the city’s piggy banks.

This extra income could be used to fund street improvements, festivals, education, policing, or even structured parking structures. For Old Town that would mean the funds from parking should be reinvested in Old Town, and not at a new mall in north Scottsdale. Shoup also advises that any policy changes need to be politically acceptable to residents, this usually means allowing current residents to park for free or at low cost. Finally he urges that cities must remove parking minimums.

Neighborhoods and business that have put into place smart market-based parking policies and rolled back parking minimums have had success in revitalizing themselves. After the struggling business district of “Old Pasadena” in Pasadena, Calif. starting charging for parking they generated $1.2 million, which they were able to invest in much needed street improvements.

Now Old Pasadena is a bustling, successful business district.

Some businesses fear charging for parking could decrease business, but their fears are unfounded if the parking is priced right. Charging a market price for parking does not decrease visitors to an area. With free parking cars park all day in the most valuable spots and don’t leave. Market price parking encourages a flow of new customers to shops.

Old Town is special. It’s walkable and it’s atmosphere is absolutely unique. But it won’t compete with big box malls by acting like big box malls. Free parking doesn’t make sense for walkable business districts.

We aren’t going to solve Old Town’s parking woes with wishful thinking and technology. Why does Scottsdale think it can figure out how to supply parking better than the market? When it comes to parking, why does government think it can act in a business’s best interest better than the business itself?

Why should my car pay cheaper rent than me?

Editor’s note: Mr. Davis is a resident of Scottsdale

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