Poor Curb Management is Costing Cities Billions
We've priced parking too low for decades. As competition for the curb heats up, here's what needs to change.
In many ways, the curb is crucial to the success of a variety of industries. It's also a vital, finite community space — and one of the most extensive and valuable pieces of real estate in a city.
Still, we've undervalued our curbs for decades. Most are designed and managed only for parking, or what we call the "analog curb." And even then, we often fail to get it right. Most cities don't price on-street parking based on the true value of demand or cost recovery, and they inadequately enforce regulations like parking time limits and loading zones.
We have also failed to demonstrate the value of the curb to the public, resulting in the impression that people and businesses have a right to free or extremely low cost and long-term parking, ridehail pickup and drop-off, and commercial loading and unloading. (Planning has covered this issue for years with Donald Shoup and others.)
Curb space has become an undervalued free-for-all, and cities are leaving billions in revenue on the table — revenue that could not only fund parking operations, mobility infrastructure and improvements, and even general services.
Now is the time to change that. Coupled with increasing digitalization, growing curb demand trends, and the convergence of pandemic-related parking revenue loss, cities should be motivated to rethink and improve their approach for the dynamic future of the "digital curb."
The analog curb
Primarily used for parking private vehicles, with limited space for loading zones and bus stops. This is primarily how most cities have and continue to plan for their curbs.
The digital curb
Multi-dimensional spaces for passenger pickup and drop-off, reserved commercial loading zones, bike and scooter parking and lanes for travel, transit stops, parklets for outdoor dining, and short-term private vehicle parking, with space flexed by time of day based on demand. In other words, this is the curb of the future.
But before we can tackle the digital curb, we must first understand how cities have planned for — and failed to maximize — its most prominent past use: parking.
Different cities, same story
By collecting parking data and analyzing pricing strategies and regulations in 50 U.S. capitals, Walker Consultants is evaluating how cities have fared with the analog version of their curbs.
Data sources include personal interviews, published city data, parking operator reports, city consolidated annual financial reports, city operating budgets, and city police department reports. By focusing on state capitals, the survey accounts for a variety of geographical and density differences by looking at some of the most populous and urbanized cities in the U.S.— Atlanta, Phoenix, Boston, Nashville — plus medium-sized and smaller cities like Boise, Idaho; Helena, Montana; and Olympia, Washington.
We also applied our planning and engineering knowledge and experience to quantify the value of constructing and maintaining an on-street curb space.
On balance, most cities charge a modest fee for on-street parking in downtowns and commercial cores, some of the most valuable land available, but don't base pricing on demand or data — or charge enough.
Of the 42 cities that charge for on-street parking for a two-hour or shorter stay, hourly meter rates range from $0.25 to $3.75 per hour. The lowest on-street hourly parking rate was $0.25 to $0.50 in Jefferson City, Missouri. The highest rates were found in Honolulu, Sacramento, and Boston.
Honolulu, generally one of the most expensive cities in the U.S., charges only $3 an hour to rent on-street spaces in its prime area. Austin and Atlanta, both hot real estate markets, charge $2 per hour (though Austin's rates increase based on the length of the stay, up to $5 per hour). And in Nashville, $2.25 gives you an hour-long parking space in the central business district, but after 6 p.m. and on Sundays, parking is free.
Why do we consider these rates too low? Because they're not based on demand, and they fail to encourage turnover or make parking convenient for customers. When studying parking utilization in Honolulu, we found on-street parking in commercial metered areas was over 85 percent full in the morning and afternoon, and 100 percent utilized in the evening. The Atlanta Midtown Alliance has reported that on-street parking utilization is over 85 percent in busy commercial areas, and according to Austin, parking spaces in downtown are typically almost 100 percent occupied.
Based on these discrepancies and the data we've collected, here are the five biggest takeaways about our current parking approach — and how it needs to change:
1. OFF-STREET PARKING SHOULD BE CHEAPER THAN ON-STREET PARKING.
On-street parking at the curb is arguably more valuable to customers and businesses than off-street parking lots and garages, and it should be priced to reflect this demand and create turnover. It's good policy to set off-street parking rates lower than on-street rates to encourage long-term parkers to use these facilities.
Our study shows that in most of the survey cities, the opposite is happening. More capital cities require payment for on-street parking at the curb than for off-street spaces in garages and lots. In eight of the 50 U.S. capital cities, no payment is required for on-street parking, compared to only four cities where off-street spaces are free for parkers.
Further, cities are charging more to park in garages and lots than on the street. While 28 cities charge an off-street hourly rate of $2 or more, only 14 cities have on-street hourly rates of $2 or more.
This is likely because cities have quantified the cost of building an off-street parking facility, and charge rates to recoup some or all of those costs. Historically, it's much more challenging to do the same for parking at the curb. Further, the cost of the curb, even if one were to calculate it, is unlikely to reflect the higher demand.
2. FREE NIGHTS AND WEEKENDS SHOULDN'T APPLY TO PARKING.
All but three cities routinely enforce parking regulations like posted time limits. Forty-seven cities regulate and enforce parking beginning at 8 a.m. or 9 a.m., and most end enforcement at 5 p.m. or 6 p.m. Only 19 cities enforce parking regulations during some evening hours.
Almost half of the cities studied enforce parking regulations on Saturdays. Only four cities — Annapolis, Honolulu, Phoenix, and Sacramento — charge for parking on Sundays.
A business wouldn't give away a prime asset during times of high demand and neither should cities. More progressive cities that are motivated to provide higher levels of customer service charge for on-street parking during evenings and weekends, some of the busiest times in areas rife with restaurants, shops, and entertainment. Patrons want quick and convenient access to parking. They prefer to walk short distances and don't mind paying more to park, especially compared to what they may spend on a night on the town. Convenient access can be created through higher parking rates that lead to decreased lengths of stays and increased turnover.
3. PARKING METER REVENUES SHOULD BE SET TO RECOUP COSTS.
Parking is a public good, but it isn't free. Infrastructure, administrative, and enforcement costs have always existed, and they'll only grow as more people vie for curb space. That's why it's good policy to set rates to recoup those costs — and even use some of the revenue to fund mobility options that increase equity and access, like bike parking and transit passes.
The cost to create an on-street parking space — from land, construction costs, and ongoing maintenance — ranges from an estimated $18,500 in a city of about 50,000 residents, to $36,700 or more in New York City. While land and construction costs are upfront capital expenses, ongoing maintenance, administrative, and enforcement costs are recurring.
Looking at how much revenue on-street parking spaces generate, there is a clear gap with costs. As shown below, 41 of the 50 cities studied reported on-street parking meter revenues from paid parking. The range for annual on-street meter revenues was a low of $49 to a high of $3,741 per space on average, with a median annual on-street meter revenue of $1,077 per space.
4. TECHNOLOGY WILL PLAY A MAJOR ROLE AS OUR CURBS BECOME MORE DYNAMIC.
Cameras, GPS, Bluetooth, and other devices will collect data and be used to enforce and monitor regulations. One of the first parking technologies, pay-by-cell, has shown how technology can be successfully deployed to make it easier for cities to encourage people to pay for parking and comply with regulations, which increases revenue.
More cities, like Jackson, Mississippi, at the time of the survey, are in the process of installing payment by cell phone. Once implemented, this feature is expected to increase market penetration to almost 80 percent amongst U.S. capital cities.
5. WE GREATLY UNDERVALUE OUR CURB ASSETS.
Going forward, cities need to use the tools at their disposal — data, regulations, zoning, fees, and technology — to create policies that adequately manage demand, create sustainable revenue streams, increase equity and access, provide a higher level of service, and ensure that curbs remain a vital community asset.
This story is part of Planning's "The Billion Dollar Curb" series. Using data from all 50 states and the latest tech solutions, this multi-part roadmap offers equitable and lucrative plans, policies, and pricing strategies to help communities of all sizes better manage the curb.
Reposted from Planning magazine with permission from the American Planning Association. Read the original article.