The Wall Street Journal

February 3, 2007

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The Parking Fix

Free-market economists are overhauling a frustration of American life -- and erasing what may be one of the last great urban bargains.
February 3, 2007; Page P1

Redwood City, in the heart of California's Silicon Valley, faced a vexing problem last year. During the busy lunch hour, downtown was gridlocked, with cars orbiting the block in search of one of the few prime parking spots, while just a half block away, a four-level garage was never full. So the city is trying something new: installing meters that charge more for the best spots.

[Parking Illustration]

As anyone who has ever circled the block for a marginally better spot knows, parking is an American obsession. It occasionally boils over into rage, or worse. Since the parking meter was first introduced 70 years ago, in Oklahoma City, the field has been dominated by two simple maxims: Cities can never have too much parking, and it can never be cheap enough.

Now a small but vocal band of economists, city planners and entrepreneurs is shaking that up, promoting ideas like free-market pricing at meters and letting developers, rather than the cities, dictate the supply of off-street parking. Seattle is doing away with free street parking in a neighborhood just north of downtown. London has meters that go as high as $10 an hour, while San Francisco has been trying out a system that monitors usage in real time, allowing the city to price spots to match demand. (A recent tally there showed that one meter near AT&T Park brings in around $4,500 a year, while another meter about a mile away takes in less than $10.) Gainesville, Fla., has capped the number of parking spots that can be added to new buildings; Cambridge, Mass., works with companies to reduce off-street parking.

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Reporter Conor Dougherty discusses the new world of parking, including rapidly vanishing spaces, and steps some cities are taking to alleviate the problem. Hear the podcast2.
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Economists have long made the case that the solution to the parking crunch many cities face lies not in more free or cheap parking but in higher prices. The idea is that higher prices result in a greater churn -- and get more people on buses and subways -- which leads to more open spaces. But this notion has often run up against city planners and retailers arguing that cheap and plentiful parking results in more commerce and, thus, higher sales taxes and a vibrant economy.

Now, in places like Redwood City, some officials are finally listening. One reason is that after decades of losing people to the suburbs, many city centers are swelling again. Many of these new residents are bringing cars with them, creating the kind of traffic that makes them yearn for the suburbs again.

One of the most influential of the parking gurus is Donald Shoup, a professor at the University of California, Los Angeles who commutes on a bicycle. Since the publication in 2005 of Mr. Shoup's "The High Cost of Free Parking," he has become something of a celebrity at academic gatherings and parking-industry meetings. Lines form at his book signings. "He's a parking rock star," says Paul White, of Transportation Alternatives, a New York group that advocates for pedestrians and bicycles.

Mr. Shoup charges as much as $5,000 for speaking engagements, accuses cities of "mismanagement of the worst sort" and labels some transportation engineers "charlatans" for their misguided parking policies. He has no shortage of invitations. "A lot of people thought I was nuts until the book came out," says the 68-year-old professor, who has a fondness for tweed coats and has owned a total of three cars over his lifetime.

[Parking Meter]
Space Technology: New meters in Redwood City, Calif.

Mr. Shoup has popularized what might be called the "85% rule": Cities, he says, should charge whatever rates lead to about 85% of the spots being filled up at any given time, moving rates up or down as demand fluctuates. The 85% target now serves as a policy guideline for cities including Portland, Ore., and Anchorage, Alaska.

In Portland, bus ridership to its Lloyd District, a shopping area and home to the NBA's Portland Trail Blazers, has increased to 33% of traffic, from 10% a decade ago. One reason: Parking prices have been raised to about 75 cents an hour from free, nudging store and office employees onto the bus.

Dan Zack, downtown development coordinator for Redwood City, has bought in. A few years ago, his boss presented him with a problem. "He said, 'We're adding a million visitors every year, but only 600 new parking spots -- make it work,' " Mr. Zack recalls. After visiting neighboring cities and reading books like "The Dimensions of Parking," Mr. Zack was handed an article by Mr. Shoup.

The city recently raised rates to 75 cents for some prime downtown spots that had been free, and ditched its one-hour time limits, so cars can prepay for as long as they'd like. The move has helped steer more cars to underutilized parking garages away from the main drag.

[New Meter]
New meters in Redwood City

In the past, Cheryl Angeles has had to jump up in the middle of a coloring treatment, foil in her hair and a black-plastic cape around her neck, to pop more quarters into the meter. Twice the self-storage company regional manager got $25 parking tickets when she didn't make it in time. Now that the time limits have been removed, she can pay once and return when the appointment is over.

The new market-based approach to parking isn't being rolled out everywhere. Many towns and cities still have lower-density development, and parking in those places is likely to remain free until there's a shortage. Also, the most dramatic parking changes are largely confined to commercial areas -- in residential neighborhoods, parking continues to be mostly free and unrestricted.

But the idea has plenty of detractors, starting with those who say the price increases fall disproportionately on people for whom they are a hardship. Also, many market-based plans eliminate minimum parking requirements for developers, which critics say gives developers a profit boost and creates a parking crunch down the line. And, some merchants remain convinced that free or subsidized parking is a necessary ingredient to a thriving shopping district. And, of course, people at any income level rarely welcome paying for something they're used to getting for nothing.

"It's just frustrating that they keep taking free parking away," says Terry Peterson, a grants and contracts administrator at Fred Hutchinson Cancer Research Center in Seattle. Ms. Peterson has a 15-minute commute to her office, where she parks in one of the area's free spots.

In spring, the city plans to put in new meters that will cost around $7 a day on average, the result of a recent study that found that most on-street parking in the neighborhood has an occupancy rate of at least 90%. She says she'll probably end up parking at a private lot, which runs about $1,800 a year.

San Francisco, perhaps more than any other city, shows how radically some cities are rethinking their parking. The city is one of the toughest places to find a meter spot in all of America, and there have been a spate of attacks by angry drivers, against parking enforcement officers. One block near the popular Fisherman's Wharf has average stays of four hours -- even though there's a two-hour time limit -- and some spots are filled for days at a time.

sensors on some blocks in San Francisco

Recently, the city hired a company to lay hundreds of 4-inch-by-4-inch sensors along the streets in some areas. The sensors, which resemble reflectors, have recorded some 250,000 "parking events" across 200 parking spots. City planners can now tell you which spots are occupied the longest and how traffic flow affects parking supplies.

If the sensors get a wider rollout, the city has floated a number of ideas. When there's a Giants baseball game at AT&T Park, the city could temporarily charge about the same as private lots near the stadium. The ground sensors are also connected to the Internet wirelessly, which creates the possibility that parking enforcement officers equipped with PDAs could get real-time information on parking violations beamed to them. It also means consumers could get information on which parking spots are open.

About a month ago, the city also installed new kiosks that take credit cards as well as quarters, and boosted prices from a flat rate of $2 per hour to a four-hour rolling rate that starts at $3 and rises to $5, for a total of $15 for four hours. That's more than the day rate at many privately owned parking garages in the area. "We're pricing to match demand," says Tod Dykstra, chief executive of Streetline Networks, which installed the sensors.

For Leslie Howard, a yoga teacher who regularly parks in the area, her tab has grown to about $8 a day from $5. Yet parking spots remain elusive. "People are just eating it," says Ms. Howard.

--Vauhini Vara in San Francisco contributed to this article.

Write to Conor Dougherty at conor.dougherty@wsj.com3

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