The other day I posted a silly thought experiment about using a van for personal storage and keeping it parked on the street. The analogy was flimsy and people pointed out problems with it (I ignored the costs of registration and insurance, I ignored the fact that the van might get targeted by thieves, and generally speaking, it's kind of a pain for just storing a bunch of junk).

For all those reasons, I was never actually considering doing it; but from the comments it sounds like some people already are (in DC and elsewhere). In any case, now that the conversation is going, I can get a little more serious about the issue.

(from thisisbossi on Flickr) 

We know what the market price for parking is in DC, and it's not the same in every neighborhood. In some areas, like around Dupont Circle, a monthly pass for a garage might cost as much as $250 per month. At $35 per year, street parking is offered at roughly a 99% discount to the market price for that area. It seems obvious why so many people would opt for a Residential Parking Permit and try to park on the street, even knowing that space is tight.

Let's forget about the hypothetical person who wants to use a parking space as a storage locker, but instead think of two people whose profiles actually seem common in DC...

Doug is a processional who lives in an apartment in Dupont Circle. He works downtown and walks 15 minutes every day to work. He owns a car. He's originally from Northern Virginia and about once a month takes a trip out to the suburbs to visit family and friends. He has a RPP and keeps his car parked on the street. He moves it for street sweeping but otherwise just leaves it alone most of the time.

Sally is also also a professional and lives across the hall from Doug. She is a commuter and every day she drives her car to and from her job in Tyson's Corner. She also has a RPP and parks her car on the street.

The question from a public policy perspective is: why is it that both of these people should be given a parking space at such a deeply discounted rate? Doug is taking up a valuable space in the neighborhood and rarely using his car. Sally struggles to find a space near her apartment after work each day. Sometimes she has to waste time circling the neighborhood or park somewhat far away.

Another way of asking this is: what would happen if RPP didn't exist and they were both required to pay the market rate ($250 per month) to park? Doug would probably sell his car, figuring that it would be a whole lot less expensive to rent a car once per month for the trips he makes. Sally would keep her car out of necessity.

Every car owning person has a tipping point at which it's no longer viable to keep their car around. For Doug, it's when the price of parking crosses a certain threshold. For Sally, that threshold is a lot higher.

The local government shouldn't be in the business of determining the "worthiness" of someone's parking situation and whether that person deserves a RPP or not. It's not their job to figure out if someone wants a parking space because they use it to commute or use it for weekend trips or use it for storing stuff in a van or use it to park a vintage sports car that gets driven 50 miles per year. Instead, the market can take care of this by letting individuals decide whether the cost of a RPP is worth it for their particular situation.

The government can raise the price of RPPs to some amount approaching the market value. The beauty of this arrangement is that the price doesn't have to be fixed across the city (like it currently is at $35). We already know that different neighborhoods command different prices because garages in different neighborhoods charge different prices.

Very dense areas can require a higher price, less dense areas a lower price. The streets will still fill up with cars, but it won't be such a struggle to find a space, as some people will reach their tipping point and switch to using a garage, while others will reach their tipping point and sell their car entirely.

Some will argue that this is regressive taxation and will hurt the poor and elderly who need cars for one reason or another. The solution here is also rather simple. If it's deemed unfairly burdensome, the local government can offer discounts on RPPs for people earning less than a certain threshold.

In a world with higher RPP prices, Sally benefits because she'll spend less time looking for spaces after work every day and she'll be able to park closer to home more often. But she might still perceive this as a bad deal because she'll have to pay more money for her RPP, and people don't like paying more money when they used to pay very little. She also might not trust that higher prices will actually improve her situation, since there's no easy and obvious way to prove it. Doug won't like higher RPP prices either, because he's currently getting a pretty sweet deal, even if it's inefficient from a policy perspective. Doug and Sally might even team up to fight any price hike.

With deeply discounted RPP prices, local government has to make a number of judgement calls... who should parking be for? Residents? Visitors? Commuters? and what should the purpose of parking be? To make life nice for people who live near by? To make life nice for people who drive in from the suburbs to patronize businesses near by? These decisions are already being made, in one way or another and a lot of people aren't happy with them.


    On March 08, 2013 Anonymous said...

    You have a twisted logic that delivers the conclusions that fit your narrative. It doesn't fly.
    There is a benefit to the district if revenue-generating residents or visitors have reasonably unhindered access to the locale, be it work-site or residence. Privately-owned-vehicles(POV) are not mentioned in the US Constitution. Neither is voting but we've come to expect license to both.
    Parking fees are irrelevant to POV ownership. Purchase & Depreciation/Annual Insurance Cost/Operating Expenses are. Off-street storage will lessen that insurance charge so there is an off-set there.
    You might raise the on-street fee(RPP) but that will only get you a new government leadership come next election. Followed by a discount back to the original rate. Remember DC now charges the property owners for the rain that falls on their roofs.


    Parking fees are irrelevant to POV ownership. Purchase & Depreciation/Annual Insurance Cost/Operating Expenses are.

    Any evidence to support this? Off-street parking certainly doesn't trade off with insurance premiums at a 1-to-1 ratio. If it did, people would be indifferent about which they used.

    On March 09, 2013 Anonymous said...

    Nice post! This is a nice discussion of the trade-off between fairness/equity concerns and efficiency. Market-based solutions tend to move toward a more efficient outcome as you described, yet it is doubtful that people and policy-makers will ever accept such market-based outcomes. The tyranny of the status-quo and the unwillingness to give up a "good thing" with their heavily discounted RPPs will always rule the day.