Market Urbanism

Liberalizing cities | From the bottom up

“Market Urbanism” refers to the synthesis of classical liberal economics and ethics (market), with an appreciation of the urban way of life and its benefits to society (urbanism). We advocate for the emergence of bottom up solutions to urban issues, as opposed to ones imposed from the top down.

Parking is not a public good

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Writers at Salon, Slate, and Time have criticized new San Francisco-based apps that allow users to purchase access to a parking spot as another driver is leaving it. The apps MonkeyParking, Sweetch, and ParkModo provide a platform for drivers to let others know when they’re leaving a spot, and reserve the spot until the another user bidding on the spot arrives to pull in. As of last week, the future of these apps is unknown since San Francisco issued a cease and desist order based on the city’s rule against auctioning or leasing public parking spots. All three writers express outrage that the apps’ creators and users are profiting off of government-owned parking spots. At Salon, Andrew Leonard writes:

Monkey Parking’s solution intended to generate profit off of a public good by rewarding those who are able to pay — and shutting out the less affluent. 

One problem with this line of reasoning is that parking is clearly not a public good. It is both perfectly rivalrous and easily excludable. Unlike a public good, the price system provides the right incentives for suppliers to provide the optimal amount of parking based on consumers’ willingness to pay. While Leonard uses the term public good, he may mean simply a good that the government provides, and he argues that entrepreneurs should not be permitted to profit from these public services. While this argument provokes a populist sense of unfairness, Monkey Parking should be evaluated against the current problem of under-priced curb parking rather than against the assumption that city governments are currently pricing curb pricing appropriately.

City governments systematically undercharge for street parking, especially in cities like San Francisco where land is very valuable. These apps are able to profit because the city charges prices for parking below the level that drivers are willing to pay. Without an app that lets drivers pay for the knowledge of parking spot availability, parking spots are allocated by drivers’ time spent driving around and looking for a spot.

Curbside parking spots, typically the most conveniently located and most accessible spots on a block, are often priced lower than nearby garage spots. Because these spots are desirable, they are often full. Drivers circle their destinations looking for available curb spots, paying for the cost of the spot with their time and wasted gas rather than in dollars as they likely would in a free market. Donald Shoup, the expert on all things parking, estimates that 30% of downtown urban traffic congestion is caused by drivers who are cruising for parking. In just one Los Angeles neighborhood, Shoup estimates that drivers waste 47,000 gallons of gas, or 730 tons of carbon annually just looking for parking spots. The cost of the cruising phenomenon in terms of drivers’ time and in greenhouse gases across cities and around the world is clearly immense.

Slate’s Will Oremus argues that allocating parking spaces based on drivers’ willingness to pay for them is regressive:

As if it weren’t enough that middle-class San Franciscans are getting squeezed out of their housing, now they get to worry about some tech tycoon outbidding them for their parking spot. These are public, metered parking spaces, mind you, paid for by taxpayers.

Keeping the price of parking below the market-clearing price is not clearly beneficial to low- or middle-income people as these authors assert. If a low-income person is running late for an important appointment or has a heavy load to carry to his destination, he will likely be thankful for the opportunity to pay a premium for a conveniently located, available spot. The app allows people to trade money for time and convenience, and people of all income levels may or may not want to make this tradeoff in a given situation. Under-priced curbside parking is a subsidy to all drivers, regardless of their income. In San Francisco, low-income residents are less likely to have access to cars than high-income residents, so providing under-priced parking likely subsidizes high-income residents more than low-income residents.

Rather than prohibiting these parking apps, San Francisco policymakers have the opportunity to make them irrelevant. Their program SFPark is already implementing reforms based on Shoup’s recommendations. 8,200 of the city’s curbside parking spots have sensors that indicate whether or not they are occupied. These sensors provide data on when parking spots are occupied, and the meters for these spots are set with the goal of maintaining 15% availability to eliminate cruising. The prices are capped at $6 per hour, so they may not reach levels high enough to maintain 15% availability, creating an opportunity for MonkeyParking to allocate spaces based on price.

Meters

Image via San Francisco Examiner

By expanding SFPark to more of the city’s curbside spots and allowing parking prices to go as high as necessary to maintain 15% availability, San Francisco policymakers would capture the parking apps’ potential revenues for the city. For those concerned that charging market-clearing prices for parking hurts low-income residents, this new revenue source could be used to provide a tax credit for low-income people. However, it’s unclear to me why the price of parking should be artificially low to benefit low-income people as opposed to all other goods. Allocating parking based on pricing rather than by queuing allows people to plan their travel based on the true cost of their trip. Setting parking prices at a market-clearing rate would create an incentive for people of all income levels to consider taking transit, biking, or walking to their destination, and would allow anyone to have the availability of conveniently located parking spots at their destination when the it’s worth the price to them.

  • anonymouse

    “For those concerned that charging market-clearing prices for parking
    hurts low-income residents, this new revenue source could be used to
    provide a tax credit for low-income people.”
    Or to fund public transit improvements, which is actually relatively easy in SF since the parking department and the transit department are part of the same agency.Or maybe split the difference and use it to subsidize Muni passes for the poor.

  • Miles Bader

    An excellent article…!

  • as both Donald Shoup and I have proposed, dynamic pricing of parking might logically be extended to allow space to be used for other purposes that are needed more. In particular, for urban affordable housing.

    It’s often observed that in cities with staggeringly expensive & scarce housing, such as SF or NYC, much land adjoining the residential land is often given for free or cheap to parking. Why not reallocate space to what is most needed?

    In The High Cost of Free Parking Shoup suggests “liner housing” on the outer edges of surface parking lots, e.g. in Silicon Valley. In my project Houslets, I am prototyping modular housing structures that could be placed on one or multiple parking spaces. They could be movable or permanent, utility-connected or fully off-grid. Using available space such as parking, and open-source building methods, I believe housing could be created at significantly lower costs than with current standard practices, and also offer advantages in sustainability and adaptability.

    As your article stresses, current land-use already misallocates space for parking. In future, trends such as car-sharing and driverless cars may make a lot of current parking-area use obsolete. So, we could begin exploring this transition, help relieve our urban housing crises, and help people live more adaptively, by trying not only dynamic pricing, but dynamic alternative use of parking areas.

    —
    Tim McCormick
    Houslets, Palo Alto
    @houslets houslets.com

  • David Sucher

    Not practical.
    Too much likelihood for conflict, death, as I Tweeted.
    Besides that it is not “legal”, most important issue w/ “selling” parking spot is public safety.

    Imagine:
    “A” sells space to “B” via some App.
    But “C” (in car) is physically waiting for “A”‘s space.
    “C” says (to “A”) ‘When are you leaving?’
    “A” says ‘I just sold space to B’.
    “C” says ‘I’ve been waiting.’
    “A” says ‘Sorry, space is reserved.’
    “C” says ‘FU.’

    Time to call cops. Legality aside, not safe. Too much potential for violence.

  • Ben Ross

    There is another big flaw in the claim that performance parking is regressive. High-priced areas have limited extent, and usually are small. You don’t need to pay a high price to park your car, you only have to pay a high price if you want to avoid a 5, 10 or 15 minute walk (or at worst a bus or train ride). If you’re stopping for a 5-minute errand, $6 an hour parking only costs 50 cents which is a minor burden on anyone who can afford a car. If you’re parking for the workday, the 10 minute walk isn’t that much of a burden (especially compared to the 15 minute search for parking). Those who can afford it pay to avoid the walk, and throw some money into the public coffers.

  • Adam

    When did subsidized parking become an inherent right? Seems like the city if fighting about a scenario that shouldn’t exist in the first place.

  • sebra leaves

    We shall see how long the voters allow the anti-car movement to continue to rule the road as citizens in San Francisco and LA are fighting back with ballot initiatives.
    This is all about who will pay to replace falling revenues as gas use and taxes fall.
    In your perfect world that excludes cars, who pays?

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  • Roland

    Like rats in a cage, people turn against each other and fight over resources because they are too lazy to get up off their asses and participate in government and the politics of distribution.

    We are a car society and banning cars can work IF there are viable and attractive alternatives. Just squeezing the balloon by raising the price of parking doesn’t achieve that effect.

    The privatization of parking and other public spaces is the result of capitalists who try to convince themselves and others that they are ‘efficient’ and coming up with solutions that ‘the market demands.’ This is BS. They are just greedy exploiters who wish to make money off of open space and public space.

  • Ian Mitchell

    Not safe to mow your own grass if there’s someone insane who doesn’t like it. Are we really planning for lunatics now?

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  • Kenny Easwaran

    Who is banning cars? They’re just talking about making people who use cars pay rent for the land they use, just as we have to for houses and businesses.

  • We saw. The silly ballot initiative that was a backlash to the chimeric “anti-car movement” went down in flames, rejected by the voters by a 2:1 margin.

  • Brigita

    To the current crop of urban planners cars are bad. This article assumes the amount of available parking in 94107 in the city is static. It is not. Since urban planners see cars as bad cities are purposefully decreasing the available parking and increasing the cost of meters and parking garages.

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