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ZAPP: The economics of parking regulation

A recent consultant’s report recommended changes in Savannah’s regulation of parking downtown. Among the proposals are longer hours for metered parking (currently only until 5 p.m. Monday through Friday), expansion of the use of meters to streets that currently are meter free and higher meter rates in the concentrated tourist region (Broughton Street and north to the river).
The immediate response was predictable: Don’t touch my free parking.
We have two problems here. First, we must acknowledge the fact that we humans abuse or overuse free resources. When parking is free, people use it even though they may not need it. Some folks who live downtown and have off-street parking places choose to take free spaces on the street because it is easier.
 Also, clerks who staff the shops happily take weekend spaces intended for shoppers instead of using places further away. The result is that people who drive downtown on weekends cannot find places on the street to park. 
People who complain about the extended hours do not understand that doing so would mean that more spaces would be available for them.
The second problem is that we must first agree on the goal or purpose of the regulation before we can have a reasonable discussion of alternatives. Currently, residents are advocating regulatory schemes that support different goals. First determine the goals, then the mechanisms to achieve them.
Parking regulations may serve several goals: making spaces reasonably available, raising revenue for the local jurisdiction (Tybee Island is expert here), reducing driving and congestion downtown and providing lanes for bicycle transportation are the most cited.
Before moving to Savannah I lived in St. Paul, Minn. When my university office was moved to downtown Minneapolis, I led the faculty fight for subsidized parking there. We paid $20 monthly and at first the university paid the additional $60. We considered this our right and overlooked the fact that by subsidizing our parking, the university was discouraging us from using public transport or car pooling.
This happens across the country. Employers located in downtown parts of cities provide parking subsidies for their employees as a benefit without realizing that they are also encouraging behavior that increases congestion and environmental damage. 
 If we want less congestion and cleaner air, we should require higher parking rates, not lower ones. The city of London now imposes a $15 fee for each car driven into its central business district for this reason.
My wife and I live on a meter free street, two blocks south of the metered zone. She does not want meters in front of our house for aesthetic reasons. I try to explain that meters will discourage the Savannah College of Art and Design students from taking all our spaces when their classes are in session.
Our parking issues pale compared to what happens in larger cities. In some of them neighbors now erect barriers and other disincentives for other drivers who might want to take “their” places.
There is also a movement to allow parkers to sell their space to someone else who is looking in the neighborhood. There even is a cellphone app that allows a driver who is leaving a space to alert potential users about its availability and price.
The search time to find a parking space is considered a cost by economists. Therefore, some of my colleagues advocate market or surge pricing that allows meters to adjust their hourly fees according to demand. People whose time is most valuable, they say, would be willing to pay the highest prices to reduce their costly search time.
Personally, I support the goals of parking availability and also disincentives to encourage less driving. While I believe surge pricing is extreme, it seems silly for our city to have half the hourly rates of Tybee Island and allow so many prime hours for spaces to be used freely. 
To assuage fears of downtown merchants that higher fees would destroy business, they and the city can develop a system in which customers receive a rebate for their parking fee on a purchase or meal above a set amount. A $100 sale minus a $4 parking rebate is much better than no sale at all. 
 

Kenneth Zapp is a professor emeritus at Metropolitan State University and a mentor with SCORE Savannah. Contact him at Kenneth.Zapp@metrostate.edu.

 
 

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