Parking Pricing

Drawing primarily on examples from the United States, this chapter explains how cities often misprice street parking, and the consequences that flow from that mispricing. The chapter then discusses progress toward charging market prices for street parking. In particular I examine equity- and fairness-based objections to market prices and find that most of these objections do not withstand scrutiny

I present street parking as an example of price controls, and use a sample of American cities to show that many street parking regimes exhibit the four hallmark consequences of price ceilings: shortages, misallocation, search costs, and shadow markets.

Most parking in American cities is free or underpriced (relative to nearby off-street parking), which creates the conditions for cruising and the justification for minimum parking requirements. Contrary to perceptions, off-street parking in US downtowns is usually available – most garages have at least 20 percent vacancy. Lastly, on-street parking charges are often lower than round-trip transit fares, even though drivers are on average more affluent than transit riders.

The chapter demonstrates the logical inconsistency of keeping street parking free, as well as the practical problems that arise by doing so. It also addresses the common concerns that dense areas have insufficient parking, and that accurately priced street parking would burden low-income people.

By using the price control framework, the chapter provides a novel way to think about parking pricing, one that emphasizes the distortions created by governments’ refusal to price their valuable street space. The chapter also provides new evidence about the relative prices of on- and off-street parking, and the burdens of parking charges relative to charges for transit.