Use Prices to Manage the Supply of Curb Parking

Assumptions

• There are 24,000 metered parking spaces in San Francisco
• Each space generates more than seven miles per day in driving in search of parking
• Prices can used to manage parking occupancy, eliminating this search mileage
• New multi-space parking meters cover 10 spaces and can be purchased and installed for $10,000 each\

Analysis

Prices can be used to manage the supply of curb parking and guarantee availability at all times of day, which translates into reducing excess vehicle miles traveled searching for underpriced curb parking. Managed effectively, this policy increases convenience for motorists while decreasing VMT, eliminating CO2 emissions and raising revenue.

In the long term, effective management of curb parking creates even greater possibilities for reduced emissions. Currently, the city attempts to ensure parking availability by requiring developers to build off-street parking facilities in all new construction. This policy limits density and increases the cost of new buildings while providing a very large subsidy for auto travel. If the City can ensure parking availability through effective management of on-street parking, it can reduce or eliminate off-street parking requirements — a policy that would lead to significant mode shift away from auto travel.

What we do now
Much of the curb parking in San Francisco is either free or priced far below its market value during peak times. As a result, the demand for parking exceeds the supply, and motorists must waste time and fuel circling to find an available parking space. Studies of traffic in congested urban areas have found that as much as 30 percent of traffic in these areas may be drivers searching for parking.

What we could do
The San Francisco Municipal Transportation Agency could set fees for curb parking at a market-clearing price, so that parking occupancy does not exceed a defined threshold. When curb prices are set to achieve 85 percent occupancy, parking is always available and circling is not necessary.

The SFMTA has developed a set of pilot programs to test the impact of this type of policy change. Known as SFpark, this program will implement market-based pricing strategies for parking in seven pilot areas around the city, and examine the impact on travel behavior, including VMT and CO2 emissions. The program will also make it easier to pay for parking by installing state-of-the-art multispace parking meters. This program is partly funded by the U.S. Department of Transportation as part of its Urban Partnership Program. The UPP program is funding projects in six cities to test innovative ways to manage congestion.

Cost
The budget for SFpark is $23 million, including $18.4 million from the U.S. Department of Transportation. However, these costs include major evaluation expenses incurred because the program is a national demonstration project. It is not known at this time whether or how much the program will increase the SFMTA’s parking-related revenue. While parking fees revenue will likely increase, revenue from citations will probably fall as the program makes it easier to pay for parking. Following the 18-month pilot period, the SFMTA will report on the revenue impacts of the program.

At this time, it is only possible to speculate about the impact of the program. There are currently about 24,000 metered parking spaces in San Francisco. Multispace parking meters that cover about 10 spaces can be purchased and installed for about $10,000, so the cost of installing new meters for all currently metered spaces would be about $24 million. Financed at 5 percent over 30 years, these costs are equivalent to about $1.6 million annually. If we assume program management costs of about $3 million annually, then the annual cost of this policy would be about $4.6 million.

It is not known how market-priced parking would affect revenue in San Francisco. However, University of California, Los Angeless professor Donald Shoup has previously estimated the potential impact of market-priced parking on revenue in Westwood, California. His estimate was that the policy could increase revenue about $1,600 per space per year. Applying this revenue change in San Francisco, with each of the 24,000 parking spaces contributing $1,600 per year, the policy would yield about $38.2 million per year in new revenue. The net revenue, including capital and program expenses, would be $33.7 million. This revenue estimate does not include the potential for a decrease in citation revenue. It should therefore be considered an upper-bound estimate of the possible impact of the program.

Carbon savings potential
Research in the Southern California community of Westwood demonstrates that in that city, on a typical day motorists search for parking for approximately 3,633 miles, or 7.71 miles for each of Westwood’s 471 parking spaces. This amounts to 2,815 VMT in parking search for each parking space, or about 1 metric ton of CO2 emissions per space per year.

It is likely that travel behavior in San Francisco differs from Westwood in important ways. The SFMTA will have a much greater understanding of how parking management change affects driver behavior in the city following the completion of the SFpark pilot tests. However, if these same figures held true for San Francisco’s 24,000 metered parking spaces, annual CO2 emissions from cruising for parking in San Francisco would be approximately 24,000 metric tons. Market-priced curb parking has the potential to eliminate all of these emissions. Using these cost and emissions estimates described above, market-priced parking would generate approximately $1,400 in public revenue for each ton of emissions it eliminated.