Hey, Buddy, What Will youPay for This Paridug Spot?A lot has happened since APA published The High Cost of Free Parking,By Steffen Turoíí AICP, and Carolyn H. Krasnow

DONALD SHOUP, FAICP, WAS A YOUNG ECONOMICS AND PUBLIC POL-icy professor in 1975 when he read about a research paper called "The Effects ofthe Subsidization of Employee Parking on Human Behavior," by Bill Francis andCurt Groninga, who were then graduate students in public administration atthe University of Southern California. Intrigued by this groundbreaking study

of the intersection between parking economics, planning, and psychology, Shoup began toresearch and publish on this largely ignored field. Thirty years later, his book. The High Costof Free Parking, consolidated his many years of work and rapidly created a paradigm shift inthe way many people think about parking.

Because he sought to overturn manylong-held assumptions about parking,Shoup's findings and recommendationswere met with skepticism, and occasionallyhostility, in the emotionally charged worldof planning. It defied common sense, manysaid, that charging for parking would bringmore people to a commercial district. Howcould requiring less parking make a desti-nation more attractive to the public? Andwasn't any increase in parking rates simplya money grab by city officials or greedy pri-vate developers?

To his critics, Shoup's theories seemedcounterintuitive. After all, how could youencourage shoppers and employees of localbusinesses to travel downtown if they hadto pay for parking? Wasn't free parking partof what had given suburban malls an advan-tage over downtowns in the first place?

While the book's in-depth economicanalysis might have seemed theoreticaland impractical to many lay readers, in factShoup's work was, at base, a return to thelaws of supply and demand that govern theallocation of most goods people consume

throughout society. Is parking really so wor-thy of exception? Shoup's "three command-ments" follow traditional market rules:

Charge the lowest price for on-street parking

tiiat wili leave one or two open spaces per

bloci< at aii times; tiiis may require adjust-

ing rates up or down, witin rates tiiat vary

by location and the time of day.

Reinvest some portion of parking revenue in

tile area where it is generated to pay for

ipcal improvements and services.

Remove minimum pari<ing requirements and

let owners determine how much parking

they need to support their customers and

tenants.

There has been much progress since2005, when APA first published The HighCost of Free Parking, but also some chal-lenges on all three fronts.

Charging market rates

On-street parking spaces are a popular—and finite—resource. The only way they canserve more people is through frequent turn-

over. On-street parking provides the "face"of an area's parking supply and availability.When on-street parking is full, parking isperceived to be unavailable and inconve-nient. If on-street parking is free, employeesarrive first and the customers who arrivelater cannot find parking. When on-streetparking is priced appropriately, employeeswill park farther away or in cheaper loca-tions, freeing up spaces for customers.

Research by Shoup and others in citiesaround the world has shown that under-priced parking—and the subsequent lackof on-street parking availability—not onlydrives away potential customers (literally),it generates a shockingly high percentageof traffic. The most effective way to miti-gate these problems is to aim for one or twoopen spaces per block. This is achieved bypricing parking high enough to discourageunnecessary long-term parking. Shoup rec-ommends adjusting rates as needed—evenover the course of a day—to achieve theneeded balance. For those who call this amajor effort in social engineering, Shouppoints out, "we don't need to change every-one's behavior; we want to move just one caroff blocks where parking spaces are fully oc-cupied."

Over the past eight years Shoup's pricingpolicy recommendation has been imple-mented in varying degrees in both largeand small cities, beginning with RedwoodCity, California. A similar parking pric-ing plan for on- and off-street parking wasimplemented in Santa Monica, California,

24 Planning May/June 2013

in 2012, with lower parking rates estab-lished in underused locations and higherrates in locations that suffered from a lackof availability. In both cities, the policy hassucceeded in increasing employees' use ofpreviously underutilized parking facilitiesperipheral to popular commercial districts,thereby opening up parking spaces nearbusinesses. Santa Monica saved tens of mil-lions of dollars by using rates to balanceutilization; the city had previously contem-plated building new parking structures tosolve perceived shortages.

Most recently Shoup's ideas have beenused as the basis for Houston's Washing-ton Avenue Parking Benefit District, whichcommenced operation this year. Accordingto Don Pagel, Houston's deputy director ofparking management, "much of the think-ing behind the new parking benefit districtis driven by advances in technology in theparking industry in the past few years, aswell as concepts in . . . The High Cost of FreeParking!' The book was also recently citedas the inspiration for a new—and extremelypopular—on-street parking pricing pro-gram for the notoriously traffic-strangledstreets of Mexico City, demonstrating itsrelevance to the parking issues of rapidlyurbanizing countries and growing marketsabroad.

The most high profile of these programs,San Francisco's SFpark, was implementedwith the help of a $20 million grant from theFederal Highway Administration. Many callthe program successful, and Shoup notes

that SFpark's policies have so far resulted inan overall reduction in parking rates of onepercent. In some locations, on-street park-ing spaces in this notoriously expensive cityhave dropped to 25 cents per hour, althoughin others hourly parking rates have climbedto $6 per hour.

Some high-priced blocks still sufferfrom a lack of available on-street spaces,which has led some people, including park-

ing industry veteran and the edi-tor of Parking Today, John VanHorn, to criticize SFpark. "The-oretically, Shoup's basic premise TRANS-is a good one," says Van Horn, TIONbut he also notes that even at$6 an hour, a number of blocksin San Francisco have no avail-able spaces. That suggests to himthat the program is not working."Rates have not increased to af-fect (the parking behavior of)the number of people" that needto be affected, he says.

Perhaps parking rates simplyhave not been set high enough?

That is part of the problem,says Van Horn. "The politicalwill is [lacking] to set rates ashigh as they will need to be" inSan Francisco and elsewhere,he notes. Add to this the quickdecisions that would be neces-

t sary for drivers—and city rateI setters—to truly implement on-

demand parking pricing and thebarriers to adopting the ideas in Shoup'sbook are daunting. Van Horn says.

Van Horn also raises the question of theimportance of comprehensive implementa-tion. "Shoup's theories are a three-leggedstool. I'm not sure one (policy) works with-out the other two."

Keeping revenue local

Perhaps the most common complaint com-

American Planning Association 25

we don^t need to change everyone^s behavior; we want to movejust one car off blocks where parking spaces are folly occupied.^"*

Donald Shoup

munities face when pricing parking is thatthe policy amounts to a money grab. A citi-zen at a public meeting in San Diego wherepaid parking was discussed reportedly re-ferred to parking meters as "electronic pan-handlers." The money-grab complaint hasbecome more common—and louder—inrecent years as cities and towns have usedparking revenues to make up shortfalls inother municipal funding streams.

Diverting parking revenues to a city'sgeneral fund can undermine the goals setout in The High Cost of Free Parking. While

revenues are a useful by-product of the ap-proach, it is important for municipal man-agers to avoid thinking of them as the ulti-mate goal. Fxperience shows that when thefocus becomes revenue generation, particu-larly revenue that evaporates into the gener-al fund, offending cities have trouble gettingthe political support they need to imple-ment demand-based parking pricing—andtend to lose their way.

Shoup's "second commandment" is toreturn some or all parking revenue to thedistrict where it is generated, as a matter ofboth fairness and political practicality. Thepolicy can generate support for paid park-ing, on the part of both drivers and busi-ness owners who are concerned about theimpact on their businesses.

Shoup points to the success and popu-larity of the Old Pasadena Parking MeterZone district established in Pasadena, Cali-fornia, in the early 1990s. Signs on parkingmeters there inform drivers that the moneythey spend on parking will be used to beau-tify and maintain the area. As a professor ofpublic finance, he also sees the revenue as afunding source with a rational nexus to itsuse.

As the Pasadena example suggests, the

idea of "locahzing" parking revenue pre-dates the publication of The High Cost ofFree Parking. But since the book came outmore cities have implemented this practicesuccessfully. In addition to Redwood Cityand Houston, parking districts in Austin,Texas, and Ventura, California, among oth-ers, have incorporated this practice intotheir parking management.

No minimum parking requirementsThe policy of requiring a land use to pro-vide a minimum number of parking spacesbased on its square footage was introducedin the early 20th century to ease the over-crowding of on-street parking spaces. Inhis book, Shoup states that in most casesthe policy achieved its goal. However, mini-mum parking requirements tend to be in-flexible and arbitrary and often result in anoversupply. That oversupply increases dis-tances and decreases walkability betweendestinations.

Shoup summed up his case in a recentopinion piece in Parking Today: "In TheHigh Cost of Free Parking, I argued that

minimum parking requirements subsidizecars, increase vehicle travel, encouragesprawl, worsen air pollution, raise hous-ing costs, degrade urban design, precludewalkability, and exclude poor people. Tomy knowledge, no city planner has arguedthat minimum parking requirements do nothave these harmful effects."

It can also be argued that the require-ments often do not work because simplyadding off-street parking will not necessar-ily reduce the occupancy rates of on-streetspaces. Because drivers tend to prefer on-street parking, those spaces will usuallyfill first, leaving drivers circling to find anavailable space, unless the on-street parking

is regulated using price, well-enforced timelimits, or another mechanism.

The publication of The High Cost of Free

Parking has led countless planning andeconomic development departments to re-examine their parking requirements—andto reduce or eliminate them. Others havemade them more flexible by allowing therequirement to be met by shared parking,in-lieu parking fees, or bicycle spaces. Therehas heen real, albeit slow, progress.

Despite the challenges, many cities ap-parently have understood the benefits ofeliminating minimum parking require-ments. In the preface to the 2011 paperbackedition of his book, Shoup states that, sincethe book's initial publication, a survey ofnewspaper articles showed that 129 citieshad removed or reduced off-street parkingrequirements in their downtowns.

But there are still hurdles. The publicoften mistakenly perceives a reduction orelimination of minimum requirements tomean mandating less parking. Communi-ties are informed of a proposal to reducerequirements but not told of additional cityefforts to address possible impacts to theon-street parking supply, as called for in TheHigh Cost of Free Parking; people simply hear

"less parking." Is it any wonder that businessowners fear that proposed changes will limitparking and access for their customers?

Finally, cities and in many cases plan-ners, too, have resisted the call to reduceparking requirements. Parking require-ments have hecome an important negotiat-ing point for cash-strapped cities that wantnew development and—because of the sys-tem of public finance in some states—theassociated sales tax dollars.

Portland, Oregon, removed the parkingrequirements for all apartment buildings situ-

26 Planning May/June 2013

destination is the draw." Mary smith,Walker Parking Consultants

r

ated within 500 feet of frequent transit servicebefore The High Cost of Free Parking was pub-lished. The specific impetus for the action wasto make housing in the city more affordable.Shoup points out that the market for apart-ments without parking is large because almosta quarter of Portland's renter households donot own a car. Apparently developers and theirlenders agreed. Thousands of apartments weresubsequently built with an average of only 0.6parking spaces per dwelling unit.

Still, some residents living near the newbuildings complained about nighttime park-ing on the street. Consistent with his recom-mendations in The High Cost of Free Parking,Shoup put forward recommendations fornighttime parking districts. He also recom-mended that revenue generated by the permitprograms be returned to the area that gener-ated it.

As of this writing, the city was consider-ing a proposal to change parking minimums(solely in commercial corridors and alongfrequent transit lines) as the first response toaddressing the issue. It should be noted thatthe change being considered would affect onlycertain buudings in areas where parking iscurrently not required and the proposed newrequirement would be 0.25 spaces per unit, asmall fraction of the requirement for residen-tial buildings in most other American cities.

Finally, as with the other two command-ments, the conversation about reducing mini-mum parking requirements often occurs sepa-rately from the discussion of pricing on-streetparking—and generating revenue for localimprovements. In the public's perception, andsometimes in reality, the threat of an impact onon-street parking does not get addressed.

Political willUltimately, the challenges come down to a

question of political will, notgood policy. As is often thecase with public policy, themost common reason thatthe recommendations in TheHigh Cost of Free Parking arenot adopted is the pursuit ofmore politically correct halfmeasures. This can under-mine the very goals policymakers are trying to imple-ment.

Change is scary for most people, par-ticularly when that change involves ask-ing people to pay for parking, somethingthey've never had to do before, or when itinvolves revising parking regulations thatdirectly impact local businesses. However,in the eight years since the book's initialpublication, the cities that have implement-ed its recommendations have found thatShoup's market approach benefits commu-nities, residents, business owners, and theenvironment alike.

Perhaps these success stories will em-bolden other cities to implement similarplans. Ultimately, better-managed parkingleaves more space and money with which tocreate destinations that people want to visit.When it comes to parking—and economic

FROM APA The High Cost of Free Parking (ir\ hardback and paperback editions) is available„, : atAPAPIanningBooks.com. For more about cities that have adopted innovative

parkingsystems, see "Smart Parking Revisited," in the May/June 2012 issue ofPlanning.

MORE www.houstontx.gov/parking/washingtonavenue.htm!.http://shoup.boi.ucla.edu/SmallChange.pdfwww.uctc.net/access/38/access38 Jree_parking_markets.pdfwww.nytimes.com/interactive/2012/03/16/us/pricing-parking-by-demand.html?ref=us.

Sarasota, Florida, built the city-owned ParkAvenue garage as a LEED-certified structure.

development—Shoup's recommendationshighlight what parking consultants havealways known: Availability trumps price. Inthe words of international parking expertMary Smith, of Walker Parking Consul-tants, "the destination is the draw." •

Steffen Turoff is a project manager and parkingconsultant with Walker Parking Consultants, a leadingparking consulting firm. He can be reached at Steffen.turoff@walkerparking.com. Carolyn Krasnow is a vicepresident of the firm.

American Planning Association 27

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