The Upside Down(town) Parking World

I often refer to the housing market as a game of musical chairs. We don’t have as much housing (chairs) as there are people who want it and however you arrange people in those houses (chairs), somebody loses out. The solution is abundant housing. In the downtown parking market, though; we suffer from a very different kind of failure. At the same time that people are circling the streets in search of that ever-elusive open on-street parking space, tons of spaces go empty in parking garages. We don’t need more parking; we need better use of the parking we’ve got.

So what’s going on? The issue stems from the underpricing of on-street parking during peak hours. Although on-street spaces are the most convenient spaces, they are also the cheapest. This means that there is a ton of competition for those spaces. On weekend evenings, the winners of this competition are largely the service workers who arrive for their shift before their patrons.  (My instinct on this is partly confirmed by data from ATX Safer Streets, which surveyed downtown service workers and found about half park on-street.)  The result is an upside down world of parking: the spaces most suitable to high-turnover applications, such as quick visits, dropoff or pickup, etc. are being used for long-term applications, such as employee parking. Meanwhile, visitors scour the streets for nonexistent open spaces before parking in a garage or going home. If we charged more for on-street parking, we would likely see a more effective utilization of both on-street and off-street parking. Service workers would find that making monthly contracts with garages is now the better deal for them, freeing up on-street spaces for downtown visitors. The knock-on effects of more available parking would be less time wasted and traffic created by visitors–especially short-term visitors like dinner or dry cleaning pick-ups–“cruising” for parking.

Not convinced that raising prices could make a more efficient market? Let’s imagine an analogy. Suppose that, instead of providing below-market rates on parking to encourage visitors to shop at downtown businesses, the city instead decided to provide below-market rates on publicly-provisioned hotels to encourage the same. These hotels were the nicest ones in the city, with ever-fresh towels, and gorgeous downtown views. On top of that, the city charges a measly $1/hour. The only catch is that the city won’t take reservations for these hotels; visitors could just show up at rooms and if they are unoccupied, they would be allowed to claim them. If they failed to find a room, they could instead park themselves for the night at a market-rate hotel.

What you would find is that many visitors would arrive in Austin without a plan for where they would stay, just hoping to find a spot in the cheap hotels. On arrival, they would visit each cheap hotel hoping to score a deal. They would search for people taking elevators luggage in hand, in hopes as a sign they were going to check out. Traffic would soar as visitors circled the streets from hotel to hotel. Meanwhile, most of the rooms themselves would be scored not by visitors from afar, but by locals who know the rhythms of check-in and check-out. Downtown businesses would get complaints from tourists that finding a hotel room was too hard and complain in turn to the city that there aren’t enough hotel rooms. Is that a crazy way to run a tourism industry? Yes and also a crazy way to run downtown parking.

2 thoughts on “The Upside Down(town) Parking World

  1. I would add just one subtle point to your analysis. We have an abundance of parking for day-time workers in office buildings much of which goes unused in the evenings/weekends. Charging more for the most convenient on-street parking would provide an incentive to lease out the spaces to a parking management company in the evenings, thereby adding to the overall available supply.

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