Contemporary Approaches to Parking Pricing: A Primer

5.0 Preferred User Accommodations

Photo credit: City of Boulder

Successful implementation of new parking pricing policies requires that cities address special parking needs and priorities that can undermine cities' ability to manage their overall parking system effectively. The preferred user accommodations reviewed in this section include residential parking permits, commercial loading, disabled parking, government employee parking, and car sharing.

Residential parking permit policy has seen little innovation, but a few programs show that on-street parking in affected neighborhoods can be better managed. Commercial loading zones, often free of both cost and time limits, have been known to fill, leading to double parking that blocks traffic during peak business hours. Special strategies or tools for disabled parking are important for improving access for the disabled, but fraudulent use of parking placards can monopolize spaces in high-demand areas, contributing to congestion, poor parking availability, and cruising for parking. Free government parking passes are a common benefit for public employees; however, this benefit impedes parking management by encouraging single-occupant vehicle commutes and the overuse of limited parking spaces in congested central civic locations. Allocation of parking for car-share vehicle storage is a recent consideration that is being addressed differently across the United States. Traditional exceptions to parking rules for preferred users, often meant to be small-scale solutions, have, over time, had large-scale implications and need review and reassessment.

5.1 Residential Parking Permits

The goal of residential parking permits (RPP) is to protect neighborhood parking by limiting its use to residents of a defined area. Innovation with RPP has been slow to evolve, especially when compared to the amount of innovation with other preferred user parking accommodations discussed later in this section. This could be the result of legislation found in many communities and some States that restricts the price of permits to the actual administrative cost of their issuance. Annual residential parking permits are $100 in San Francisco; $35 in Washington, DC; $25 in Chicago; and free in Boston. Cities have experimented with RPP by implementing various restrictions that range from the number of parking passes a household can receive to what types of households are eligible to receive a residential parking pass. Several cities limit the number of passes per household, which reduces the potential for abuse (e.g., residents re-selling extra passes).

Aspen and Boulder provide examples of the monetization of excess residential parking spaces. While neither city charges its residents market-rate fees for parking permits, each city has found that it can monetize excess capacity in the neighborhoods and does so by allowing visitors to purchase parking passes. Aspen sells daily visitor passes for $7.00 and monitors parking occupancy rates to assure that sufficient parking capacity exists for neighborhood residents. (This program is discussed in more detail in the Case Studies section of this primer.) Boulder offers quarterly commuter parking passes that are good in residential parking zones. Area commuters who work in Boulder's downtown core are allowed to purchase these passes (City of Boulder, 2012). While the program has had success in maximizing the city's parking potential, at no harm to its residents, the guest-parking program currently has a wait list, indicating that its price does not reflect its true market value.

Cincinnati is considering applying advanced pricing and management principles to its residential parking. The CUF Neighborhood Association, which represents the Clifton Heights, University Heights, and Fairview neighborhoods, formed a committee in 2010 to address oversubscribed on-street parking and the excessive circling and congestion that result. The committee has completed its proposal to manage roughly 3,000 on-street parking spaces. Authority would be given to the Department of Transportation and Engineering to set both monthly residential permit prices and short-term meter prices to achieve an 85 to 90 percent occupancy rate. Prices would be set to be somewhat more favorable to residents than to short-term visitors.

Despite these advances, additional innovation is needed in the realm of RPP programs. Residents are being offered access to a community asset at little or no cost. In addition, the issuance of RPPs does not guarantee that access is maintained. Many cities refer to RPPs as a "hunting license" due to the limited availability of parking spaces, especially in high-density areas. The alternative to using RPP pricing to curtail parking spillover onto the curb in high-density residential areas, such as the above-noted Cincinnati proposal, is the imposition of minimum parking requirements, which raise housing prices by many tens of thousands of dollars per unit. Policies that improve neighborhood access, and recognize the true value of curb parking in residential neighborhoods need to be pursued.

5.2 Commercial Loading

Photo credit: City of Seattle

Delivery parking for commercial vehicles is at a premium on busy urban streets in the United States. In business districts, on-street commercial parking is seldom adequate to fully satisfy the volume of deliveries in a single day, and yet this finite resource is largely provided for free. The failure to supply and price commercial parking adequately impacts the mobility of cars, buses, and pedestrians alike, as delivery trucks will often park illegally if a space is not available. What results is a rippling effect of double parked commercial vehicles, cars, and buses taking over bike lanes combined with illegal curb parking that invades pedestrian space and blocks pedestrian crossings. Commercial loading zones and delivery parking are an essential component in any parking management plan; increasing availability and decreasing demand are two essential strategies that will alleviate congestion and improve service. Parking pricing can be an effective tool to encourage turnover of spaces and off-hour deliveries.

New York City implemented a pilot program along congested Midtown streets in 2000 to address commercial loading issues. The pilot was successful and subsequently expanded to include Chinatown and all commercial areas in Manhattan between 14th and 60th Streets. The program replaced unpaid commercial parking with hourly metered rates for all commercial loading zones and used an escalating pricing scale: the first and second hours cost $2.50 each and the third hour costs $4.00 (Schaller et al., 2010). Pre- and post-program measurements found an average reduction in minutes parked from 160 to 45, with only 25 percent of all commercial vehicles parking in the same space for more than 1 hour. The program has been particularly successful at improving mobility on narrow cross-town streets, which are commonly rife with double-parked vehicles and blocked traffic. The program is supported by the commercial delivery industry and has shown that escalating pricing is an effective tool for encouraging commercial parking turnover.

New York City implemented an additional pilot program in 2009 to encourage commercial deliveries outside of regular business hours. The program targeted large freight companies with a demonstrated commitment to sustainability and that exceeded 100,000 trips per day into Manhattan (Solomonon & Gastel, 2010). The goal was to shift deliveries to times between 7:00 p.m. and 6:00 a.m., thereby reducing street congestion and illegal curb and double-parking practices. Originally eight delivery companies and 20 of their client businesses participated in the program; on-time delivery to first stops improved by 75 percent. Further results found carriers were able to save on fuel costs and time by making more total deliveries in off-hours. Businesses benefited by being able to focus staff time on customer service during peak business hours rather than on processing deliveries (Cassidy, 2010).

Philadelphia has taken alternative measures to address parking and congestion problems related to commercial vehicle deliveries. First, Philadelphia created commercial loading zones that allow deliveries on main streets from 6:00 a.m. to 10:00 a.m., with afternoon deliveries delegated to side streets. Designated loading zones were allocated only for delivery vehicles during morning hours but open to general parking later in the day. Then, to let commercial operators know that enforcement would be implemented, the city purchased vehicles capable of towing delivery trucks. Philadelphia stresses enforcement policies, and being able to tow delivery vehicles has greatly improved parking compliance among commercial vehicle drivers.

5.3 Disabled Parking

Photo credit: FHWA

Free disabled parking has been accepted practice in the United States for decades running; however, increased demand for parking, increasing occurrences of disabled placard abuse, and a general need for better parking management by cities has many re-thinking the paradigm of free and unlimited parking benefits for disabled persons. During most of U.S. history, access to basic services was a daily challenge for individuals with a disability; public transit rarely accommodated wheelchairs, and parking spaces were often too far from services for disabled people to access easily. An attempt was made by policy makers during the post-World War II period to alleviate these barriers by allowing free parking without time limits at street meters to individuals with a disability. The sole requirement was that disabled persons register and display official placards, license plates, or other disabled identification documents while parking. These policies were enacted from coast to coast and often at the State level.

The Americans with Disabilities Act of 1990 (ADA) ushered in a new era of increased accessibility for disabled persons. Public transit now is required to accommodate the needs of the disabled population, and off-street parking facilities must allocate 2 percent of total parking spaces for individuals with disabilities. ADA accessibility standards for transit and off-street parking are explicit; however, street and metered parking standards are vague. This vagueness has allowed free parking for disabled persons to remain a national standard practice.

As a result, the free parking benefit has made disabled placards a desired commodity, opening the door to abuse. In addition, since the inception of the ADA parking benefit standards, the definition of "disabled" has expanded, yielding a greater number of drivers who qualify for this benefit. Conversely, the stock of metered parking spaces, especially in dense, high-demand areas, has remained relatively constant. Many localities are now experiencing a disproportionate number of disabled drivers compared to the overall number of registered vehicles. The California Department of Motor Vehicles reported a 350 percent increase in the number of disabled placards issued in 2010 compared to 1990, a rate that is far higher than the population growth rate (Lopez, 2012).The baby boomer generation, now reaching retirement age, will only add to the total number of disabled drivers.

Beyond the expansion of eligibility, recent studies throughout the country have documented the fraudulent abuse of disabled parking by people without a disability, who are parking for free and without time limits in the most convenient and desirable parking places. In 2011 the City of Seattle published a report indicating that 30 to 40 percent of metered parking in its downtown core was occupied by vehicles displaying disabled parking placards (Seattle Department of Transportation, 2012). Violators see the value of free parking, especially in high-demand areas, and therefore use either a family member's or friend's placard illegally; additionally, placards of deceased persons are seldom collected, presenting another opportunity for fraudulent use. This abuse of disabled parking benefits affects disabled people and their ability to access services no differently than the population at large.

Parking experts are thinking anew about parking benefits for disabled persons. The goal of accommodation is still at the forefront, but with the understanding that this should not be allowed to interfere with the effectiveness of parking management strategies. Variable pricing and additional parking strategies will have limited impact if 10 to 40 percent of high-demand, metered spaces are occupied for an indefinite amount of time, at no cost, by drivers with disabled placards. Unfortunately, cities frequently lack jurisdiction over disabled parking. Many States, including California, Illinois, and Texas, offer disabled parking benefits as a statewide policy, leaving local jurisdictions with a limited ability to manage disabled parking.

Arlington County, Virginia, was one of the first communities nationwide to address disabled parking placard abuse and its impact on effective parking management. During the late 1990s, Arlington had a problem of low parking availability due to excessive and fraudulent placard use. The Arlington Disabled Commission approached Arlington County asking it to address these problems and offered support for the elimination of free metered parking altogether. According to an Arlington County parking manager, community support was garnered from inception, and local officials could therefore engage State officials in an attempt to revise State disabled parking ordinances, a necessary step as Virginia State law limited local jurisdictions' power in managing disabled parking. Through this process Arlington, and therefore other Virginia municipalities, gained greater flexibility and enforcement ability with regard to parking management practices. With the necessary structural changes in place, Arlington County rolled out its "All May Park, All Must Pay" program in 1998, which stopped all-day fraudulent use of disabled placards. Drivers with a placard were required to pay for parking but were allotted twice the time period to access services.

The District Department of Transportation (DDOT) in Washington, DC is building from Arlington's program and implemented a disabled parking pilot program in 2012. The goal of the program is to create better access for disabled persons. The District's old policy allowed disabled drivers to park for free at meters District wide (District Department of Transportation, 2012). Under the pilot program, a total of 400 meters, the domes of which are painted red to be visibly different from regular meters, provide two spaces per street block for better access for disabled drivers in commercial zones. Only disabled individuals displaying official placards are allowed to park at these red-domed meters. For the first time disabled drivers in the District will be charged to park, but with the new meters they will be allotted twice the amount of parking time for the price. By replacing free parking, the program aims to discontinue the prime incentive for abuse, according to the DDOT. As a part of the pilot effort, District-wide informational campaigns were conducted by DDOT staff to elevate awareness about the change.

The State of Michigan has also implemented a change in its law, allowing only those individuals in a wheelchair or unable to operate street meters to qualify for free metered parking. All other disabled persons are allowed to park in handicapped spaces in off-street facilities. Prior to the law change, 500,000 disabled parking placards were in circulation, and each holder was allowed to park for free. After enactment of the new law, only 10,000 people, or 2 percent of the previous 500,000, were allowed to park for free. The Michigan law gives free parking only to those most in need, requires a doctor's certification with the application process, and uses a new yellow placard, a clear differentiation from the traditional blue disabled badge (Fusco and Maloney, 2012). Illinois State officials have initiated similar legislation that would revise the qualifications for free disabled parking in metered on-street spaces beginning in 2014.

States and cities are also increasing the penalties for placard abuse. The State of California granted municipalities the authority to increase fines for placard abuse from $250 to as much as $1,000. Beginning in 2012, Chicago began issuing fraudulent placard users fines, ranging between $500 and $1,000, while simultaneously impounding their vehicles at an additional cost of $1,500 to $3,000. Furthermore, people with a registered placard can be charged a $200 fine for allowing others to use their placard to park for free (City of Chicago, 2011). Each of these fines, noticeably more severe, are intended to deter people from misusing placards to park for free.

Best practices pertaining to disabled parking include:

1. Verifying whether State legislation exists and, if so and it prevents implementing best practices, working to make changes;
2. Determining what parking managers are legally allowed to do;
3. Increasing fines (if parking managers don't have legislative approval to charge for parking);
4. Eliminating free parking completely, limiting it to those in wheelchairs or who are unable to use a meter, or doubling the amount of allowed time.

Most importantly, parking managers should coordinate with the disabled community and seek its approval and support for any changes.

5.4 Government Employee Parking

Free parking benefits for government employees can easily undermine a city's transportation goals, particularly as parking near government offices is often at a premium. As with anyone offered free parking benefits, government employees are drawn to its convenience and economic advantage. The issue of free parking is complicated because many government employees work in CBDs where parking is in limited supply. A study was conducted in New York City to determine how free parking for government employees affects their travel behavior. The New York City Department of Transportation issues its workers parking placards that allow them to park for free at any legal, metered, on-street space while conducting official business. That study, based on 2000 Census data, found that government employees are significantly more likely to drive to work than their peers. If the studied employees drove alone at the same rate as their peer group, there would be 14,000 fewer cars entering the Manhattan CBD each day (Schaller Consulting, 2005). These findings are supported by an additional study of New York City commute behavior that found a positive correlation between government employment and the likelihood that a person will drive to work (Weinberger, 2012).

Studies also found illegal parking by employees to be a common occurrence throughout busy civic areas, negatively impacting pedestrian safety, economic activity, emergency vehicle access, and public perception of government employees (Schaller Consulting, 2006).

There has been some discussion of addressing employee parking issues in New York City by offering employees recurring cash payments to relinquish their parking placards. This would be the equivalent of a parking cash-out program. It would be possible to price the cash out at a value lower than the revenue currently lost from employees parking at meters that could otherwise generate revenue. Another option that has been discussed is to offer employees in-car meters loaded with a negotiated value that allow employees to park throughout the city. The meters would be an employee benefit that would replace parking placards that offer unlimited free parking.

San Francisco has revised its employee-parking benefits as part of its larger parking program adjustments. In one initiative, San Francisco Municipal Transportation Agency (SFMTA) employees, many of whom were parking for free at off-street lots attached to various facilities (e.g., bus yards), lost the privilege to park for free. All SFMTA employees must now pay to park unless the right to free parking is in their labor agreement. In a second initiative, all city vehicles lost their exemption from paying meters and adhering to parking time limits. A few exceptions exist for vehicles such as police, fire, and maintenance.

The City of Austin, Texas is initiating a pilot parking cash-out program in the spring of 2012 in lieu of free employee garage parking. The goal of the program is to reduce peak traffic congestion and increase the availability of visitor parking. The volunteer program, with a one-year budget of $40,000, allows all 450 downtown city employees to register and receive a $50 a month incentive for leaving their car at home. Employees are offered a free Capital Metro transit pass, guaranteed rides home in emergencies, and personalized commute assistance. Downtown city employees currently are able to park for free at the Austin City Hall garage, which is leased by the city at a cost of $150,000 annually, or $100 per space per month (Coppola, 2012). The program goal is to encourage 100 employees who drove to work alone to commute to work differently, minimize downtown traffic congestion, promote transit alternatives for city workers, and increase visitor parking. The city will monitor employee compliance by requiring employees who drive and park to sign-in.

5.5 Car Sharing

Photo credit: City of Hoboken, NJ

Car sharing is growing quickly in the United States. Users sign up for a membership and are able to rent cars for short time periods with gas and insurance included in the cost. Cars are stored in numerous locations throughout cities, and various methods are used to allow members to gain access to and start the vehicles. Car sharing differs from typical rental car services in that vehicles can be rented for a short period, as little as 30 minutes; vehicles are not stored at a central location; rental fees typically include gasoline and insurance; and users are typically required to purchase a membership. Zipcar, Hertz, and Enterprise operate car sharing nationally, while numerous smaller agencies or non-profits provide service to limited geographic areas.

It is estimated that one car-share vehicle can remove four to five vehicles from the road (Millard-Ball et al. 2005, 4-7). Unfortunately, finding locations where car-share vehicles can be stored between uses can be a challenge for both cities and car-share operators. Cars are typically stored in three types of locations:

1. Within residential developments;
2. In off-street commercial facilities; and
3. On street.

Depending on the types of facilities it owns, a city can control access to all three of these locations. Options that cities can take to assure that parking spaces are available to car-share vehicles for storage between users are discussed below.

Supplying parking within residential developments is a relatively straightforward process for cities. In areas where car sharing exists, developers may seek out car-share agencies when constructing new residential buildings. The presence of a car-share vehicle can provide a marketing advantage, and contracting for car share earns a builder three points toward a Leadership in Energy and Environmental Design (LEED) designation. Unfortunately, not all cities have updated their zoning codes to allow car-share vehicles to be parked in residential buildings' parking areas. Making this change is a first step for any city seeking to encourage car sharing. Some cities have gone a step further and require developers to allocate parking spaces for car-share vehicles, but developers are typically not required to make the spaces available for free. Larger car-share agencies can provide sample ordinance language to cities seeking to update their zoning code.

When it comes to purely commercial parking facility operators and owners, cities have taken few actions to encourage the allocation of parking spaces for car-share vehicles. Zoning codes generally do not need to be changed to allow this, and the private market has shown itself to be capable of meeting demand. Car-share operators typically seek to park a large number of vehicles in a city and can therefore seek rate discounts by working with a particular parking operator.

The allocation of on-street parking is where cities have significant control. Two primary models have been developed by cities to allocate on-street parking to car-share agencies. The most used model is to designate on-street spaces for car-share vehicles and allow car-share operators to apply for those spaces. Portland, Oregon, works with the local car-share agencies to identify areas with demand for car sharing and available on-street space. Signs are installed to designate on-street spots, which are then allocated to the various operators at no cost. Pittsburgh, Pennsylvania, uses a similar model, but rather than providing the spaces at no cost, it charges a minimal fee.

The second model is to designate on-street spaces and auction them off to the highest bidder. In communities where multiple vendors compete, it can be difficult to decide who gets which spots, which this model can help address. Washington, DC makes operators bid for available parking spaces. Unfortunately, a successful auction process requires the presence of multiple bidders. If a car-share operator knows that a competitor will not want a space, it can provide a low bid to the city and secure the space at a very small cost. Thus, if this model is implemented to maximize a city's revenue, it may not accomplish that goal.

Regardless of the model chosen, cities that allow car-share vehicles to be placed on blocks where street sweeping is in place can require car-share operators to clean the street below and around the vehicle. This addresses the likelihood that a car-share vehicle will not be moved when street cleaning occurs.

Another consideration is that the allocation of on-street spaces in neighborhoods where parking demand is high may generate a negative community response. Hoboken, New Jersey implemented a Corner Cars program in which spaces on key corners throughout the city were designated for car-share vehicles only. The city suffers from a general shortage of on-street parking and public reaction to the set aside of spaces was negative. It is likely that other communities would experience similar concerns if they allocate on-street parking to car-share vehicles in high-demand areas. It may be possible to mitigate that concern by educating the public regarding the potential of car sharing to reduce parking demand.

Overall, the model for allocating car-share spaces is well developed within the private market. Cities need to do little in this area other than make sure it is legal for developers to allocate parking spaces for car-share vehicles. Allocation of on-street spaces is more difficult in areas where multiple car-share operators compete. Cities experiencing such competition and wishing to allocate on-street parking to promote car sharing need to identify an effective process through which spaces can be allocated among competitors.