Time to think about the parking problem
Not a lot: The economics of parking
from NewsLink, Vol. 5, No. 2, Winter
This article also appeared in the
Boston Sunday Herald on May 5, 2002 under the headline, "Space
You're late for work. It's 8:30 a.m. and you've
just arrived at Alewife MBTA Station. There's a line of cars stretching
onto Route 2 waiting to park. But you wait 20 minutes, anyway, hoping
for a break. Sorry, no luck, the parking lot is full.
It's a bad way to start the day. But it's
what hundreds, perhaps thousands, of commuters face each day.
The parking lots adjacent to commuter
rail and subway stations are, for the most part, filled to capacity
early in the morning. By 7:00 a.m., the MBTA lots at Chestnut Hill,
Eliot, Sullivan Square, Waban and Oak Grove are full. The huge (2,378)
garage at Quincy Adams Station is full by 8:30 a.m. Despite more
than 14,000 parking spaces in 22 garages, (see the table), parking
is at a premium.
The new $30 million parking garage
at Route 128 Station, which serves commuter rail passengers, does
indeed have plenty of available space. But the reason for this may
be that although the $3-a-day fee is reasonable, commuters are balking
at the $10-an-hour fee that kicks in after 14 hours.
Add to this the strong economy of
the past few years which has produced low unemployment and more
people in the workforce. This means more commuters seeking a relatively
static number of parking spaces.
Commuters to Boston have limited
options. For those willing and able, arriving at a parking lot before
the fill-up time is a possibility. There are other forms of public
transportation, for example, buses or boats, but here too, parking
limitations can be a problem.
For those willing to pay $25 or
more to park, driving into the city is an option. But Boston's parking
crunch makes even this a dicey proposition. The Clean Air Act of
1975 imposed a parking freeze on parking spaces in the city. There
are efforts aimed at easing these restrictions, thus allowing for
more parking garages to be built, but these are ongoing and still
face opposition from environmental groups.
The economics of parking
Like any economic good, parking
spaces are subject to the law of supply and demand. Textbook analysis
suggests that if demand for a good is strong, producers of that
good will rush more of it to the market.
But why isn't the MBTA or any other
public agency building more parking lots? And why aren't entrepreneurs
turning unused land into parking lots and shuttling people to T
There are at least three possible
First, the MBTA is unwilling or
unable to charge enough for parking. Most of the satellite parking
lots do not cover the costs of providing the parking.
A multi-story garage costs about
$15,000 per space to construct, not including the purchase of the
land. To recoup this investment, operators would have to charge
about $4 per day; add land costs, taxes and management costs, and
the daily rate would be about $6. The most expensive MBTA garage
(Alewife) only charges $4 per day.
The problem is that as long as parking
is subsidized, new parking projects must line up for subsidies and
compete with other projects new buses and light rail vehicles,
renovations to stations and expanded service. In this context, parking
is seen as a low priority. In addition, the MBTA's new forward funding
scheme places limits on capital spending.
Second, zoning issues may prevent
the development of additional parking at the local level. In effect,
local communities have a veto over the siting of parking facilities,
and they have little incentive to agree to facilities that traditionally
yield little tax revenue for them yet add to local traffic congestion.
Although the not-in-my-back-yard
problem has abated somewhat over the years, it is still a significant
obstacle to the siting of new facilities. Some public interest organizations
oppose the construction of parking lots altogether, calling them
blights on the landscape.
Third, the freeze capping the number
of parking spaces allowed in Boston means fewer opportunities for
entrepreneurs and fewer options for commuters.
What can be done?
There are a number of options.
Operators of MBTA lots could apply
full-cost pricing to all new parking facilities. If new parking
facilities pay for themselves, then they can be financed more easily.
This makes it possible to build more facilities. Existing parking
garages could continue to charge lower fees as they do now
if that were politically desirable.
Economic theory suggests that pricing
should vary with the time of day the space is being used and the
location of the space. Generally, operators should charge higher
prices for the most convenient spaces and for cars that park during
rush hour. Lower prices should apply for less convenient spaces
and for parking at times other than rush hour. The purpose of this
is to generate as much revenue as possible to be applied to the
cost of providing the facility (without deterring drivers from parking
and using public transportation). For instance, a commuter who wants
to take a train at 7:00 a.m. to make a 7:30 am meeting is willing
to pay more for a convenient space than, say, a commuter who wants
to take a train at 10:00 a.m. to go shopping in downtown Boston.
This is an economically rational if politically unfeasible solution.
Another option is to provide shuttle
service to MBTA stations from parking lots that are currently underutilized,
but are within reasonable driving distance of the T. This is the
model used by some privately-owned park-and-ride garages operating
at Logan Airport. It could be applicable to the commuter crunch
as well and might even encourage the converting of otherwise unused
land into parking lots.
A variation of this option is to
encourage shopping malls that are located near MBTA facilities and
that have spare parking capacity to designate an area for all-day
parking on a metered basis. Again, shuttle service could provide
transportation to the T.
Finally, apply the equivalent of
the Dover Amendment (which allows unduly restrictive local zoning
rules to be overturned for religious and educational establishments)
to plans for new parking lots.
Price controls are not the
There are some things that we should
Recently the City of Boston has
considered two options to deal with the high cost of inner-city
The first would put a cap on the
price that may be charged by parking lots. Such a move would not
create any additional parking spaces. Busy drivers who are willing
to pay a premium to park would find themselves in line with everyone
else waiting for a parking spot to open up. Airlines charge premium
prices for customers that need convenience, and so should parking
The second questionable idea calls
for providing subsidies in order to encourage the building of more
parking spots in the city. This would surely boost street traffic.
If subsidies are to be considered, a much stronger case can be made
for encouraging the building of satellite lots in outlying areas
around Boston. This would keep Boston cleaner, quieter and safer.
The creation of more parking spaces
could encourage the use of public transportation. Since 1970, vehicle
miles traveled have increased by 75% in the region, while the population
has increased by only 10%, according to the Office of the Secretary
of Environmental Affairs. If current trends continue, the number
of vehicle miles is expected to grow at a rate five times faster
than the population. The expansion of parking facilities near MBTA
rail and commuter line stations would help alleviate the externalities
caused by more automobiles on congested roads.
Creating more parking lots will
not eliminate traffic jams. Nor will it give everyone a quick, smooth
and easy commute. But a well-directed effort to expand public transportation-related
parking would greatly improve the quality of life for the average
resident who must travel to Boston.
That's certainly better than driving
around in circles looking for a place to park.
Format revised on August 18, 2004