Parking Management Districts: How they work, why they're good for Portland

As I wrote in the last post, our city could enjoy hundreds of millions of dollars worth of increased economic activity if we were able to utilize more efficiently all the acres of real estate we currently devote to motor vehicle storage.

But currently, any time a developer tries to replace a parking lot with a building, its neighbors raise havoc, because they're worried that cars will be forced to park on the street and use "their" parking spots.

The Greater Greater Washington Blog in the District of Columbia, which is considering reforms similar to what Portland's study recommends, puts it best:

We do not force new apartment buildings to provide cable television or Internet access, yet there aren't legions of "neighborhood activists" fighting to require cable in all new buildings. Why? The only difference between parking and other amenities like cable and laundry is the concern about "spillover"—the idea that if we don't build lots and lots of parking, new residents will park on the street, taking up spaces that existing residents are "entitled" to.

But our Residential Parking Permit system only barely works even today. In some areas, employees move their cars every two hours; in other areas, parking demand is mostly nights and weekends where drivers from outside DC can park for free and as long as they like anyway. Besides, even when cheap off-street spaces are available, drivers will take an on-street space if they can get one for the convenience.

As experiences from other cities show, the best policy is effective on-street management through performance parking techniques. DC is already refining an appropriate mix of on-street management techniques for our city through the pilot programs in Columbia Heights and around the Nationals ballpark.

The current system is clearly ineffective: the city provides public property for private vehicle owners for free or for very limited prices (what I call "parking socialism"). One of the problems with socialism is how inefficiently it distributes goods and services to the people who need or want them. The Soviet Union had one of the highest per-capita grain production rates in the world, but their supermarkets had chronic shortages of bread. Similarly, in a socialized parking regime like Portland's there are chronic perceived shortages of parking, even when half the city is paved in parking lots.

Instead of a socialist system, then, the Portland Transit Study proposes market-based reforms. If you want to park right on Exchange Street on a Friday night in July, you'd pay more - as much as $4 a hour for the privilege. However, if you're willing to park a few blocks away where there's less demand, you'll pay less to park. Prices will be determined by how many people want to park there: if parking costs $1 an hour and there aren't any spaces available, the price will go up. Conversely, if we're currently charging $1 an hour on a street where the parking spots are always empty, the city would lower the price until people begin using the spaces.

In adjacent residential neighborhoods where there aren't any parking meters, residents would have an opportunity to create a Residential Parking Management District. In these, the number of parking permits that the city gives out would be limited by the number of parking spaces available, thus guaranteeing a space for residents who have permits. The owners of those permits could then sublet their parking spots to area employees while they park their own car at work elsewhere.

There's been some controversy over whether the city should charge for these permits or not. This "controversy" is relatively moot, since simply creating a one-to-one ratio of spaces and permits, and allowing for the ability for permit owners to trade or sell their permits with each other, will create the property rights necessary for a functioning market. If the city gives them away, then people will "pay" either by standing in line at City Hall, or by staying home and buying the permits secondhand from someone else.

People also tend to forget the fact that taxpayers are already paying for maintenance of these parking spaces whether or not we use them, and the existing owners of over-allocated permits are paying in their wasted time during nightly hunts for an available parking spot.

The most economically efficient way to distribute permits would be for the city to hold an auction for the permits: people who drive every day or need a convenient parking space would make higher bids, while people who only drive occasionally might decide that they don't need an on-street parking space after all. A non-driver could buy a permit and park an on-street flower garden there instead of a car. For the sake of equity, the neighborhood could also hold some permits in reserve and sell them at cost for low-income or elderly residents.

By auctioning on-street parking permits, the people who use on-street parking will be held accountable for paying for its maintenance (as I wrote previously, this amounts to about $50 per parking space every year). And on-street parking would be utilized more efficiently.

Ultimately, though, the decision to create a parking management district will be left up to the neighborhoods themselves. The Transit Study will only make the suggestion and provide the frameworks to create these districts. If a neighborhood wants to be a satellite lot for downtown workers and continue hunting for parking spaces like loaves of bread in a Soviet supermarket, that's their right.

How to turn a parking lot into $1 million: The economic opportunities of parking deregulation

One of the more exciting aspects of the Portland Transit Study's recommendations for parking on the Portland peninsula is the fact that by making better use of parking lots, a lot of empty pavement could be redeveloped into offices, housing, or businesses.

This possibility also holds huge potential for Portland's economy - and especially for the owners of existing parking lots. As a case study, let's take a look at how a medium-sized parking lot downtown could be turned into a quick $1 million for its owners, and generate additional tens of millions of dollars for the local economy, if the Transit Study's recommendations are implemented.

This particular parking lot happens to be owned by a struggling local business that has been unusually critical of the Transit Study's recommendations. It's my hope that this case study might help bring this business around to see the benefits, as Maine Medical Center and other local employers have.



It contains about 100 parking spaces on 3/4 of an acre. It's also located on Congress Street in the heart of Portland's downtown, within easy walking distance of the city's Old Port and Arts District, and directly across Myrtle Street from City Hall. The business that owns the lot has its offices directly to the south, opposite City Hall; the owners also operate a manufacturing facility on the same block.

Three local bus lines pass directly in front of this lot, the rest of the city's local bus lines begin and end their routes three blocks away at a heated indoor bus station. Additionally, the public transit services of Biddeford and Saco end their commuter and intercity bus routes one block away, at City Hall. In short, this is the most centrally-located, most transit-accessible parking lot in Portland.

So here's the question: how much money could this struggling business make if it could somehow convince the 100 motorists who use this parking lot to walk, bike, carpool, or ride transit to work instead? Or to park in some other parking lot, in a less valuable location, and make other arrangements for the last mile or so?

Well, the vacant city-owned land in Bayside recently received bids from developers that were roughly $1 million per acre. This much more centrally-located location is probably worth more, but let's use the Bayside rate as a conservative measure. Then this parking lot, at 3/4 of an acre, would fetch at least $750,000 on the free market, or $7500 per space - that's the opportunity cost of maintaining this parking lot.

And then there are the physical maintenance costs as well. Pavement is expensive to maintain, with snowplowing, new asphalt, sweeping, stormwater costs, security, etcetera. A 1999 study in Alabama pegged the maintenance cost of asphalt at about $0.50 per square yard per year (see page D-4 of this), or about $20 per parking spot. The cost of asphalt has roughly doubled since then, and since we're in Maine, not Alabama, there are also plowing costs, and more potholes and cracks to deal with, so let's call our annual cost $50 per space, or $5000 for the entire lot. The owner also pays property taxes: about $8600 worth every year for this section of their property (source).

Over 40 years, these annual costs have a net present value of over $245,000 with a 5% discount rate.

So adding up the physical and opportunity costs, unloading this field of expensive pavement to a developer would net about $1 million - a tidy little capital infusion.

But how are those 100 drivers going to get to work? Well, let's suppose that the business pockets half of the money they get and shares the other half with the 100 employees who used to park there.

At full price, half a million dollars could buy twelve years' worth of free bus passes on METRO. Another transit study recommendation is for METRO to provide bulk discounts for large employers' purchases of bus passes, though, so in reality, this sum might actually buy several decades' worth of passes. The business could also give a lump-sum $5,000 payment to 100 employees who agree not to drive anymore, but that wouldn't account for turnover; instead, the money could go into an interest-earning endowment fund and pay $30 a month for forty years to workers who don't drive.

What do you think? If your company offered half-price transit passes and a $360 annual bonus for not driving, could you find 100 volunteers to sign up? I'll bet you would. [Although deregulation of on-street parking through market-rate "parking benefit districts" is absolutely necessary to make this arrangement work... more on that in a future post.]

Here's the upshot for the business: it has the opportunity to pocket the equivalent of a million dollars immediately (from a combination of the land sale and future gains to their balance sheets), some of which it could then share with its employees in order to incentivise not driving. As an additional, less quantifiable bonus, many of these employees will enjoy a reduced cost of living as a result of buying less gasoline: this, in turn, will mitigate long-term pressure for wage increases.

But there's more. Presumably the developer buying that parking lot would want to put something there. Since it's right on Congress Street, let's assume a 6-story, 18000 SF office building with ground-floor retail space gets built. This would generate tens of millions of dollars in construction activity, and provide working space for dozens of new employees in downtown Portland, all of whom would frequent local shops and lunch spots. The sum of all the economic activity from a new 18000 square-foot office building downtown - all the salaries, rents, cleaning contracts, restaurant bills, profits, dry cleaning checks, etcetera - would add up to several million dollars injected into the local economy every year.

Replacing an empty lot with a building would also increase the taxable value of the property several times over, which would contribute more money for municipal services at City Hall. And because the former users of the parking lot are being paid not to drive there anymore, local streets will be safer, suffer less congestion, have better air quality, and require maintenance at taxpayer expense.

All told, the net benefit to the local economy would probably add up to hundreds of millions of dollars. And that's for one single parking lot. Add up the potential benefits of the peninsula's dozens of under-utilized surface lots, and we're suddenly looking at a multi-billion dollar opportunity for our local economy, with safer streets and thousands of new jobs and homes downtown.

Exciting, isn't it?

Portland's Transit Study recommendations already being implemented...

... but not at City Hall.

This week's Forecaster breaks the story of Maine Medical Center's adoption of several Portland Peninsula Transit Study recommendations. Maine Med had an official representative on the citizens' advisory committee for the study, and two additional staff members were present at nearly every meeting.

They were also some of the most enthusiastic supporters for the ideas that consultants Nelson/Nygaard brought to Portland. The hospital recently spent tens of millions of dollars on a huge new parking garage, and people are already fighting over the new spaces. MMC's parking staff came to our meetings eager for new solutions to their parking problems.

So while the local daily has been pillorying the study's recommendations, the city's biggest local employer has been implementing them on their own - even before City Hall has had a chance to take the lead. From Kate Bucklin's report:

Carpoolers are being offered "preferred parking" at the Bramhall Campus.

"Most of our staff parks offsite and is shuttled in," said Ryan. "Carpoolers get onsite parking."

Employees who decide to take the bus to work - either Metro or the Biddeford to Portland Zoom bus, are being offered bus ticket subsidies in exchange for committing themselves to taking the bus during a certain time period.

For workers living closer to campus, Maine Med is encouraging walking to work. People that sign on to walk are offered a gift certificate to Olympia Sports as well as 20 percent off purchases at the store. Ryan said the hospital plans to give umbrellas to employees who choose to go to work on foot.

Biking is a popular way of getting to work at Maine Med, according to Ryan. He said there is a self-organized bike commuter group that is working to add bike racks at the Bramhall Campus, and the hospital plans to purchase bike lockers. Cyclists are also organizing a bike repair network with tools available at the hospital as well as a list of places to get bikes repaired.

As of July 18, 460 employees had signed up for the Get on Board program, with 248 enrolled in ride-share, 50 in walking, 88 on bikes and 74 taking mass transit.

A natural question might be to ask how MMC is paying for bike racks, walkers' gift certificates, and bus tickets. The truth is, they're making money from these programs, because every walker, cyclist, and transit user represents one more parking space that MMC doesn't have to rent or maintain in off-site satellite lots.

The average Portland parking space takes up about as much real estate as a studio apartment. So every parking space that MMC doesn't need to rent or build is worth thousands of dollars to the hospital annually.

Besides, isn't it about time a hospital began encouraging healthy behavior among its staff? Nice work, Maine Med.

We'll dig our way out.

Highway to Irrelevance: The Decline and Fall of the Maine Turnpike Authority, Part 2

In the lead editorial of the Portland Press Herald, Maine's leading newspaper takes a look at the balance sheets of the state's two major transportation bureaucracies. Their conclusion is in the editorial's sub-headline:

The Maine Turnpike Authority and other transportation officials have to rethink plans.

The newspaper notes that Turnpike traffic is following the trend of car sales and SUV manufacture in a steep decline (previously written about here). This means that the Turnpike Authority and MDOT are collecting less money from tolls and gas taxes: toll revenue, in particular, is "about $546,000 less for this year over last and well below the 2.5 percent increase that had been projected."

"Executive Director Paul Violette is well aware, the trend has long-term implications for transportation planning.

"'We have a shift in the paradigm here,' he says. That shift could translate directly into putting off turnpike expansion projects, something Violette says his board will be discussing in coming months.

"Already, a widening of the turnpike north of the I-295 interchange has been delayed from 2010 to 2015, and Violette says that project and others could be further delayed if fuel prices stay high and people drive less. 'Some of the things we've been looking at could get pushed beyond our 10-year planning window,' he says."

We wonder if one of those things might be their $40 million tollbooth? (see also The Decline and Fall of the MTA, Part 1). Certainly their multi-million dollar new headquarters building, which required blasting a rocky hilltop to pricey smithereens out on outer Congress, is still under construction, which means that the new palace passes the MTA's dubious fiscal sniff-tests.

The Press Herald concludes that "The tricky part is that no matter how many cars are on the road, the snow still has to be cleared and old bridges need to be replaced and roads repaved. Look for transportation planning to be a major challenge in Augusta in 2009."

Indeed- the only way to pay for a billion-dollar backlog of maintenance projects is either to raise taxes on drivers, or reduce costs and value-engineer.

And the Maine Turnpike Authority's bureaucratic overhead is an awfully ripe, low-hanging fruit on the cost-cutting side of the equation.

Transit Info volunteer needed in Portland

Passing this along from the folks at the Amtrak Downeaster and Concord Coach:

If
you like people, you like Portland, and you like transportation - then
we have a great opportunity for you! The Concord Coach Line and the
Amtrak Downeaster are looking for volunteers to staff an information
booth at the Portland Transportation Center. The growing interest in
public transportation means lots of new people visiting the station.

We're
looking for energetic people who can provide information about the
facility and the transportation providers, connections, area
attractions and be ambassadors for our growing ridership. It's a great
way to support the cause, and also a great way to earn free travel on
Concord and on the Downeaster!

For more information, please contact info@nnepra.com.

Portland Press Herald makes a strong case for its own bankruptcy in Transit Study reporting

Tonight's transit study public forum was a great success, with consultant Jason Schreiber's presentation of the study's draft recommendations inspiring most people in attendance (including some committed skeptics).

But what's this? I get home to find that the local paper, the Portland Press Herald, has published a news update: "Portlanders Sound Off On Transit Plan."

The "article" consists exclusively on man-on-the-street interviews with random people. Man-on-the-street interviews are an old contrivance of paleo-journalism, and reporter Kelley Bouchard provides a fine example of why the practice deserves to die in this piece.

Basically, Bouchard, the author, has gone out "on the street" and shared her own limited understanding of the Study's complex and nuanced recommendations with random people, most of whom seem completely unfamiliar with the Study, and records their knee-jerk, off-the-cuff reactions as "news." A sampling (these are the first two paragraphs):

"Joshua Douglas doesn't like the idea of paying to park on the street near his Munjoy Hill apartment.

"'I have trouble parking my car as it is,' said Douglas, who manages Bull Moose Music in Portland's Old Port. 'If I had to pay for it, that would be terrible. Unreasonable, really.'"

Of course, what Bouchard obviously didn't explain to Douglas was the fact that auctioned on-street parking permits would make parking much, much easier for him, since he'd be guaranteed a parking spot near his house every night. Nor did she mention the fact that other elements of the study would provide generous transit service improvements and incentives for walking and biking for people, like Douglas, who live or work near downtown.

So here are the upshots of this man-on-the-street article:

1. The man on the street looks like a fool for misunderstanding the topic at hand.
2. The reporter looks like a fool for misrepresenting the topic at hand.
3. The reporter then wastes three hours collecting, compiling, and publishing these foolish reactions, at which point
4. Complete lack of context and nuance in the reporting of the topic at hand leads to more knee-jerk, foolish reactions from the public, which in turn,
5. Undermines public support of good public policy.
6. Strengthens support among informed citizens for putting certain old-media institutions out of their misery.

Relax, Press Herald. The old-media institution I'm referring to is these man-on-the-street articles. I know you guys have better ways to spend your time, and that you can do better. This topic - in these times - deserves your best.

Car sales, Turnpike traffic in steep decline

According to today's MaineBiz daily report, traffic on the Maine Turnpike was down 10 percent compared to the same weekend last summer, even though this year, the 4th of July holiday fell on Friday (it was on a Wednesday last year). So the ten percent decline came in spite of the fact that this was a three-day weekend, as opposed to last year's more typical two-day weekend.

The same daily report also mentions that fact that Maine car dealerships sold 17,759 cars during the first five months of 2008, a 9% decline compared to the same period last year. Maine also has four fewer car dealerships this year than we did last year.

These trends recall financial analyst Jeff Rubin's predictions for the CIBC investment bank. According to economic forecasts, Americans will be spending more on gasoline than they do on groceries by the beginning of 2010. Federal Highway Administration forecasts also indicate that the number of scrapped vehicles will begin to exceed the number of new vehicles sold beginning early next year. Rubin writes that "summing up the cumulative difference between new sales and scrappage over that period [between now and 2012] suggests that somewhere in the neighbourhood of ten million Americans will be coming off the road over the next 4 1/2 years."

Rubin's full report is fascinating reading: click here to read "Getting Off the Road: Adjusting to $7 per Gallon Gas in America," from CIBC World Markets Inc.'s StrategEcon newsletter.

Announcement: Peninsula Transit Study Public Forum

For the past couple of months, I've been working on Portland's Peninsula Transit Study citizens' advisory committee as a representative of the Portland Bike/Ped Advisory Committee and as a resident of the West End.

The draft study is now almost ready for public review, and I'm pretty excited by it. If implemented, the study's recommendations would put Portland at the leading edge of transportation demand management.

I've long argued that we generally take for granted a socialist system when it comes to car parking: the cost of storing your privately-owned vehicle on publicly-owned streets and parking lots is zero or close to zero. It's basically a Zapatista coup for cars and traffic congestion.

The study now underway is proposing to reform that system by setting a price on most parking on the city, offering ways around or doing away with mandatory parking quotas demanded of developers, and investing the revenues gained in better transit service and investments in walkable/bikeable streets.

Besides generating new funds for transit, these ideas would also put a clear price signal on parking throughout the city. Instead of maintaining parking lots because zoning says we need to (urban blight by city fiat), property owners will maintain parking based on the market's demand. Once they have to start paying to park, more drivers will choose transit, bikes, or walking instead. And as fewer parking spaces are required, then more land on the peninsula will become available for redevelopment as housing, offices, and civic buildings.

Just imagine how many thousands of suburban exiles the vast parking lots in Bayside and the Old Port might be able to house if they were transformed into neighborhoods. But we're getting ahead of ourselves: first, the City Council will need to approve the Transit Study's recommendations. Come to tomorrow's public forum and shout out your support!


PORTLAND TRANSIT STUDY: PUBLIC FORUM
When: Wednesday, July 9, 6:30 to 8 PM
Where:: Merrill Auditorium Rehearsal Hall (behind City Hall, entrance on Myrtle Street near Cumberland Avenue, 2 blocks east of the METRO Elm Street Pulse transit center).

More information, including the study's draft recommendations [pdf file], are available from the City's website.

Boys and Subways

Please go read Christoph Niemann's illustrated strip about his sons' obsessions with the New York City subway system. A sampling:

When your child cries in public, it is usually an uncomfortable situation. Once, we needed to get home quickly from Chambers Street, and I told Gustav that we had to take whichever blue train came next. The A train pulled in, and Gustav (who had been hoping for the C) started throwing a fit. However, the other passengers in the car gave me warm smiles. I guess they hadn’t seen that many 3-year-olds sobbing, "Local... I want the local."

The smart way, or the highway?

And the bus and bike-riders save themselves 50 cents every mile, to boot. Courtesy of Seattle's Sightline Institute.