Mayor McGinn's proposed 2011 budget calls for raising on-street parking prices to as much as $4 per hour in the downtown core and smaller increases in other city neighborhoods. (The Mayor's budget legislation actually sets a $5 top limit per hour on meter rates.) The Mayor is on the right track, but we should go even further and introduce demand-sensitive variable pricing as quickly as possible.
Demand-sensitive or performance-based on-street parking rates are pro business. Here's why as explained by Donald Shoup, professor of urban planning at UCLA and the author of The High Cost of Free Parking.
"Prices that produce an occupancy rate of about 85% can be called 'performance-based' for three reasons. First, curb parking will perform efficiently. The spaces will be well used but readily available. Second, the transportation system will perform efficiently. Cruising for underpriced curb parking will not congest traffic, waste fuel, and pollute the air. Third, the economy will perform efficiently. The price of parking will be higher when demand is higher, and this higher price will encourage rapid parking turnover. Drivers will park, buy something, and leave quickly so that other drivers can use the spaces. Cities can achieve all these goals by setting curb parking prices to yield about an 85% occupancy rate." ("The Price of Parking on a Great Street," Parking Today magazine, February 2009.)
Shoup also recommends that parking meter revenue above the current base rate be dedicated to neighborhood-specific street improvement projects, including more frequent street and sidewalk cleaning, enhanced lighting, more police, litter and grafitti cleanup, and pedestrian improvements. Shoup calls this revenue dedication "parking increment financing."
San Francisco will soon launch a very sophisticated experiment in on-street parking management. This three-minute video provides the essence of their program. Many of the core elements of the San Francisco program could be introduced here fairly quickly. For example, we could adjust meter parking rates electronically by neighborhood on a quarterly or monthly basis to achieve the desired 85% occupancy rate.
And here's a New York Times opinion piece by Shoup that explains the most effective pricing model for on-street parking.
The Council should adopt specific outcomes related to on-street parking, such as the 85% occupancy standard and then allow variable demand-sensitive meter rates. When demand is low, for example on weekends and late at night, meter rates would be low or free. When demand is high, primarily during the day or early evening hours, meter rates would also be high. This approach to public policy is objective, is outcome-driven, and removes the political squabbles and conflicts of the traditional approach to setting meter rates.