Wednesday, March 24, 2010

Cheap parking is absurd

The comments on recent posts are full of thoughtful challenges that I hope to address. I'll start with this one:

Aside from that, the flat statement that cheap on street parking hurts businesses is absurd.

Well, no. But, first, you have to define "cheap."

In the context of parking, cheap means underpriced. Underpriced is not some vague, I-know-it-when-I-see-it concept. It's simple economics: parking is underpriced if demand exceeds supply. Parking is properly priced at a price that creates an equilibrium between supply and demand. Put more plainly, parking is properly priced at a price where occupancy is a little below 100% -- when there is a vacancy or two each city block.

Imagine a motel that's at 100% occupancy every night. Any owner in her right mind would conclude that prices are too low. She'd be leaving money on the table not to raise prices.

With parking spaces, it's not only a matter of lost revenue. Without regular parking vacancies, turnover is low. The consequence to businesses of low-turnover is that people who want to shop in a commercial district can't find spaces to park. And, that hurts business.

In different areas at different times, the price that's high enough to ensure turnover is different. What's cheap around St. Mary's place during a Red Sox game is not the same as cheap when the Sox are out of town, which is not the same as cheap in Newton Centre during the weekday lunch crunch.

But the analysis is the same: cheap parking = low turnover = less business.

Not absurd.


Anonymous said...

By that token, your logic is still off. You should then have to define business. A bar keep and other types of businesses want their patrons to stay awhile. A two hour meter rate that is too high will probably mean someone won't park there. A bank that is mostly used for ATMs would like short term parking for its patrons and could care less about longer term parking. Besides, the whole point of the article was to talk about how to keep red sox fans from grabbing long term parking from local businesses. You're trying to use it to come up with some platitude about parking use via a supply and demand theory. Supply and demand theory works, but you went from something specific, tried to go global, now your back to specifics, ignoring the original discussion from which it started. And all this seemed to stem from the fact that you don't want parking spots at Riverside. In both cases you're trying to mess with red sox fans. You don't give them an easy way to park at public transportation, and you don't give them an easy way to park locally. Don't you think the fans have suffered enough? Giv'em a break. You're probably a Yankees fan from NY.

Anonymous said...

Anonymous may have some screwy ideas, but cheap parking=low turnover=less business doesn't cut it either. You just can't determine that so easily. It may have absolutely nothing to do with the price of parking. Having occupancy a little less than 100% may have more to do with the mix of businesses. Staples, post offices, burrito places, etc. don't need "long" term parking. People can be in and out in 15 minutes or less during most hours of the day. You'll always have turnover, and it would have nothing to do with the cost of parking. It sounds like you're trying to come up with a theory that only fits a specific situation. And maybe the owner of the hotel would arrive at the conclusion that her prices were a fair compensation for what she was providing. And there is really no need to gouge customers due to demand. There are laws against that for most other products. Why are you suggesting that parking is anything different? Establish a fair price for parking on a public street. First come, first serve. Next thing you know, businesses will be putting out lawn chairs to save spots for their patrons. Only in Boston...

MamaVee said...

just curious b/c we usually agree, but doesn't more $ parking for places like say newton center etc mean cars move in and out faster? For a less traffic standpoint wouldn't cheaper parking be better? Perhaps I'm the only one who would like to park in west newton for three hours to go to the gym and then stop at my LBS and then go grab a cup of coffee. If I have plenty of meter time- I will make those stops. If not- then I have to run and buy my coffee at Whole Foods b/c I'm going there anyway and the local coffee place doesn't get my $ that day....

But then again $$ parking is an incentive for me to bike instead of drive so I don't have to worry about that *and* I end up accruing change to use on the days I do use my car and I do load up for the three hour max. If I drove ever day though like most people do - the $4 meters would keep me on the move and make me drive several short trips to my in and out stops...

Anonymous said...

You bring up another good point. I hate to generalize, but if someone is going to Appetito's for lunch or dinner, they are not going to worry about how expensive the parking meter charge will be. I don't think charging more will make them get up sooner. If it's too much, they might decide not to go at all (then all the businesses lose), but once they have a spot, I don't see the charge affecting the length of time they park. Now, if someone is going to Starbucks for a $2 cup of coffee, they may not linger as long as they like, and/or may not bother going to other stores if the meter rates are too high. But, here again, they will probably judge that before they go, and it might drive them away altogether, as Mamavee stated given her own example. Nice that bicycling is an alternative for them, but it may not be for a large majority of customers. So, business is lost. The more I think about it, this higher parking rate stuff cannot be made into a general rule. It's only going to fit specific situations like keeping longer term parking event goers out of spots that may turn over somewhat faster. And for that you'd have to make it really expensive. And then the whole business density model goes out the window because people won't be staying longer to bother going to the other stores that are around. Fair price for a given service on a public street. First come, first serve. Worked for years. If someone's business can't be sustained, they're doing something wrong. They shouldn't be blaming it on the parking or competition for spots with an established venue that was certainly in existence before that bar opened on Beacon St. Should the T raise it's prices on game days because they know they'll get more customers regardless of the cost? Maybe lower prices to get into town, and surprise customers with WAY HIGHER prices which they will have to pay to get home. Just every so often... because they can. I guess the cheap parking=less business turned out to be REALLY absurd as opposed to just absurd.

Steve R said...

MamaVee, parking is currently priced SO low that rates could double without providing a disincentive. I mean, if I'm willing to drop $3 on some nice Chinese tea at Peets, I'd drop another buck to enjoy an hour sitting and reading. Nobody's talking about time limits, here: just about finding the right price point (which, aside from NYC, usually works out to be pretty low) to provide a few more open spaces. If the price point is too high, the parking cost discourages business; if it's too low, parking maxes out and the lack of parking discourages business. When it's just right, you get the maximum number of people using businesses, because people can depend of finding a space relatively quickly. If too many spaces are open during peak business hours, that means the price point is set too high. So it's only going to be a disincentive for doing multiple errands from one parking space if it's priced too high.

Anonymous, it's not just a matter of logic. It's been tested in a number of communities, and it works. Pasadena is a great example.

Anonymous said...

I looked up the Pasadena info. Good story from what I could tell. But it went along with changes to the whole area to make it more attractive. And it was a depressed area, with a large shopping facility that charged some fees nearby. From the description: "If it takes only five minutes to drive somewhere else, why spend fifteen cruising for parking? Short-term parkers are less sensitive to the price of parking than to the time it takes to find a vacant space." Newton Center, Brookline by St. Mary's, etc., where are you going to drive 5 minutes to find something else? The whole area is congested. The description also made Pasadena sound like a depressed area at the time. And the rates were raised to put money right back into the area to make it more attractive. If someone has a plan to cover this type of thinking, that's great, let's see it. But it doesn't sound like there was going to be any additional thought, just the idea that it's good to raise parking rates and that it would "obviously" be just as effective. And the business mix still seems like it would have a lot to do with it. I read about the Pasadena story here: Still, keeping an eye on from whence this came, you (maybe not Steve R.) don't want cars at Riverside, and you don't want cars hanging around local streets, and businesses like that bar say only 50% of patrons walk to it. You're not making it easy to get there and stay. As nice as Brookline is, it's not a historic district that will attract that type of traffic. The generalizations are too great. If you're going to make a statement that higher rates promote business, you have to do it with a bit more thought to our area.

MamaVee said...

I also think Newton could have a better pay system. Like Brookline where you go to a kiosk and can pay by credit card. Because honestly my biggest issue with paying for parking in newton is having enough change. I will gladly pay to stay but oftentimes I am limited by the change I have. Brookline village was lovely in that I could punch in how long I wanted to stay and use my credit card and it was so easy I didn't even pay much attention to the price per hour.

I'd tip more if I didn't need my change too. ( although again biking allows me to not need to bother with this much. I just spent 2 hours in newtonville, ate sushi, bought pocky at the asian market, bought pet supplies, books at the book store and a cake at the bakery. Pretty nice for the businesses from me I'd say.

Anonymous said...

Ive never understood the "no change" argument. It's exceptionally easy to enter a bank and get a roll of quarters. The problem with credit cards is that the city loses and the credit company gains a fee.

"just curious b/c we usually agree, but doesn't more $ parking for places like say newton center etc mean cars move in and out faster? For a less traffic standpoint wouldn't cheaper parking be better?"

No, because cheap parking makes people circle to find a space. If the garage is $15, and the street parking is $1.50, thats a huge incentive to spend 10 minutes circling.

"And there is really no need to gouge customers due to demand. There are laws against that for most other products. Why are you suggesting that parking is anything different? Establish a fair price for parking on a public street."

I dont think you understand what price gouging is. A fair price for parking would mean the same rate private business charges. If private business is charging $10, why should the city subsidize the parking by $8? For the fenway area, the lots charge $30 per game, but you can park on the street for $1.50. That's robbery. The opportunity cost is coming out of everyones pocket.

Price gouging would be if the city banned private parking businesses, banned walking and biking, and charged $50 to park.

Anonymous said...

I understand exactly what price gouging is. And you evidently also do because you called it opportunity cost. Exactly. Your suggesting raising prices 'cause you can. Your last example would be price gouging along with creating a monopoly. Still, you have to have a garage available. I think you're still mixing arguments to try to prove a generalization that doesn't fit. For something like Fenway goers, they may have a garage to go to if they can pay. But you were trying to make that idea work for everyone. For general town centers, for Coolidge Corner, there are no garages. You're just going to drive people away. And you don't want to give them parking at Riverside to let them take the T. Like I said, you're one resident, and feel free to give an opinion, but you seem to have no real expertise in the area. And you're talking about neighborhoods you don't live in. And you don't look at the mix of businesses. Every major city seems to be going forward with alternatives to dumping quarters into meters, yet your idea is to have to go to a bank and keep a roll of quarters handy. In which coat pocket, or in which car? Where's the bank going to be? Here is one idea that does translate to other areas, and you don't want to do it. I understand the reason, so consider letting the consumer pay the difference for the convenience. But don't blithely take the option off the table because you have got too much time on your hands to extensively plan for your trips, and travel when banks are open.

MamaVee said...

RE: going to the bank and getting quarters-

1. I have a lot more on my mind that to make sure I have parking change. I can fill up my car console with quarters but they will empty out someday and refilling them simply isn't my priority.

2. Or going to the bank in the moment? That does not work either as if I am driving it is usally b/c the weather is too foul to bike and I have one or more kids with me. parking and going to get change and coming back is simply not an option. ( a kiosk is nearby enough to leave kids in car while I run to pay and come back to place slip in window)

3. Re credit cards. I have to shrug on that one. It has to work for the consumer. Kiosks also use dollar bills as well. In new haven CT one can buy a parking card at local stores and then you can use them as a debit card for the meter. In any case having to collect change *is* a pain and to be able to use dollar bills or credit cards will allow for higher meter prices and so on.

Newton Centre does not have a garage. So I don't understand that point. Neither does Newtonville, or west newton. Or any of the villages I travel in...

Anonymous said...

"but you seem to have no real expertise in the area. And you're talking about neighborhoods you don't live in"

I live right off St Marys street. I think that gives me a very good understanding of the parking situation at the entrance of Brookline + red sox game days. That's why I referenced garages, the area is packed with garages and lots. You're right, Ive never been to Riverside. I don't know how parking is organized over there.

I also have ample experience with parking problems around the world. Take the multi-space meters.
My problem with credit cards was that part of the money leaves the city. Im all for using dollar coins, dollar bills and a city run parking card program. Even better, why spend so much money on hardware?

Take the multispace parking meter. They're big, they're expensive, they require maintenance, they require weekly (daily in some areas) collection of coins and bills. Are they a good investment? I lived in Brazil, where parking meters dont exist. Instead, you purchase a parking booklet, and when you park, you do what the multispace meter does: you punch out a time, and date, and place it on your dashboard. But instead of hundreds of thousands of dollars going to the company that makes the fancy meters, all the city is doing is buying note pads and selling them at retail stores.

Americans love spending huge amounts of money on infrastructure. Another example are the useless fare gates on the MBTA system. Did you know each gate costs $10,000 dollars? Would have been cheaper to not have any form of gates, but instead simple tap areas, such as found around London (outer tube stations, DLR), athens, outer RER stations in paris etc etc. In fact, for two years, Ashmonst used the system, instead of 10,000 fare gates, they had a fare box from a bus.

This is way off topic of course, but the point is, there are many ways to think about wasted tax dollars and missed opportunities, even with something as basic as parking.

Anonymous said...

Sorry, thought you were a different anonymous who doesn't live near parking garages. If there is a parking alternative I see your point. I may not necessarily agree that it's the right thing to do though. Business mix is going to have a lot to do with how long someone is in the spot. And the red sox issue is an entirely different sort of issue. I'd agree with the point about the turnstiles. Not even having a place to tap a charlie card at the rear entrance of a train seems amazingly dumb as well. But how do the booklets accommodate people from out of the area? Does everyone know to get a parking booklet when they come to town?

Anonymous said...

regarding: "For the fenway area, the lots charge $30 per game, but you can park on the street for $1.50. That's robbery. The opportunity cost is coming out of everyones pocket." Wouldn't that be the garages gouging the public? It seems like that should be made illegal, rather than the city gov't taking advantage of it

Steve R said...

One or several of the anonymice keeps missing the main point here: the right price point for a particular location is the one that results in maximum usage. If the parking price is too high, discouraging usage, that becomes quickly clear: too many parking spaces are open. Likewise, if not enough spaces are open (the magic number is around 15%), it's clear that the spaces are priced too low.

Somebody (or somebodies) here seems to think that the aim of raising prices is to discourage parking altogether. Of course not: that would be just plain dumb. The point is to maximize the number of people visiting a business area.

As to the point about using parking revenues to reinvest in a neighborhood. It's a great idea, and yes, that point has been raised by Sean on this blog, and was raised as well by Alderman Danberg roughly a year ago, regarding meters in Waban. No good idea goes unpunished.

Drive elsewhere? Sure, I drive elsewhere, and though it has something to do with the mix of businesses (no grocery store in newton centre), it also has something to do with ease of access. If you make it easy and attractive, people will pay a little extra to shop locally. And if a few more people shop locally, that's incentive for an improved mix of businesses, and when there's a better mix of businesses, more people come, and... so on.

MamaVee, I'm with you on the quarters. I regularly get rolls at the bank... when I actually go to a bank anymore, which isn't that often. But we spend most of our quarters in Boston on the odd day we have to drive, and there it's 4 quarters/hour. We go through rolls pretty quickly. I'd much rather pay some other way.

Anonymous said...

Okay, Steve had a coherent and concise statement:"the right price point for a particular location is the one that results in maximum usage. If the parking price is too high, discouraging usage, that becomes quickly clear:". However, if the area is saturated, and people don't have a good alternative, a "right" price point will not be clear, and I think it amounts to price gouging. It's just too general a statement that may not apply to a lot of neighborhoods. If the supply is way too little, the city shouldn't be permitted to raise the price exorbitantly based on a general rule that may not change a thing regarding the level of demand. And using an example of what happens during a red sox game to say it's okay to do it in Newtonville or Riverside just doesn't seem correct. I don't see major cities like NY charging high enough rates to always keep a parking spot open in basic neighborhoods just because they could. It would be exorbitant to charge that much for street parking. And if you're not changing the demand, why bother raising it at all. It's just another way to raise taxes and it hurts folks that have a tough enough time to pay for things.

Steve R said...

"If the area is saturated and there's no alternative," said anonymous. Yes. But a) how do we know whether an area's saturated, unless we experiment and b) alternatives: walking, biking, combining trips with neighbors and friends, buses, T. Not all are suitable for everyone, of course, but if just a few more people chose an alternative to the SOV (single-occupancy vehicle) just a few times a week, that's a few spots open that weren't before.

The problem is in the all-or-nothing thinking that goes "but what if it's too far to walk, what if the T doesn't go where I need, what if biking is too dangerous, what if organizing combined trips with neighbors is too much of a pain..." and then rejects the idea because it doesn't work for everyone all the time everywhere. The fact is, we don't need it to work for everyone all the time everywhere. We just need it to work for a few, sometimes, in some places, and that's usually enough to take the pressure off parking & reduce wasteful SOV use. It's a nudge, not a huge push. The theory is that it's just enough of a nudge to start a change in practices that will gather steam, so that eventually SOV becomes the exception, not the norm, because the alternatives become more convenient.

No community could possibly afford to make changes in one fell swoop that would make all the alternatives to driving alone easier. All we can do is nudge a little at a time: a modest change in parking prices here, an improved sidewalk & streetscape there, a bike lane over there, an additional bus route there, a zoning change for mixed use over there... and bit by bit, we become a better place to live.

We've got to start somewhere. Why are so many people so resistant to a modest change in parking prices? I mean, really. What's it going to amount to? $50 a year? Chump change for most Newtonites. And if we could earmark the parking fees for improvements to village centers, it'd be money well-spent.