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.