EXCLUSIVE: Donald Shoup Talks Parking Policy, OTR Permit Fees With UrbanCincy

Donald ShoupIn advance of his lecture Tuesday at the Mercantile Library, UrbanCincy was able to get an exclusive interview with Dr. Donald Shoup to discuss a variety of issues ranging from Cincinnati’s own parking management efforts, the controversial OTR Parking Permit proposal and how parking reform is changing with the emergence of ride sharing services.

The digital interview took place on Thursday, October 23 and included the following discussion.

John Yung: Last year the City of Cincinnati almost committed to leasing its parking meters and some garages to a private corporation (Xerox) for a lump sum payment and yearly revenue for 40 years. What are your thoughts on cities attempting to lease or sell their parking assets to generate revenue?

Donald Shoup: Like burning all the furniture to stay warm on a cold night, selling a city’s parking meters for an upfront payment to cover current operating expenses is a bad idea. Some cities are considering more farsighted parking contracts that share the annual revenue rather than maximize the upfront payment. A contract with a professional operator who meets performance pricing goals and shares the resulting revenue with the city can give the city two big advantages: a well-managed parking system and a perpetual stream of income.

For example, a city can require its private contractor to set meter rates that keep the curb occupancy rate between 75% and 95% on every block for at least a certain number of hours every day, with penalty payments for failure to meet the occupancy goal. If professional operators can manage parking more effectively and at lower cost than cities can, private contracts with performance goals can be a good deal for almost everyone.

Xerox already manages the prices for on-street parking in downtown Los Angeles, and the program is a great success. Charging the right prices for curb parking produced some surprising benefits. The Express Park program showed that many meters had been overpriced, especially in the morning. During the program’s first year, 59% of the meter prices decreased and only 29% increased. Average meter prices fell by 11% and average parking occupancy increased by 17%. Total meter revenue increased by 2.5%. Parking reform is working well in Los Angeles.

Yung: Cincinnati political leadership is currently looking at increasing meter rates, hours and implementing a residential parking plan for Over-the-Rhine, a neighborhood that is next to the central business district. The residential permits are proposed to be $300 a year, which will be the highest permit price for on-street parking permits in the country if implemented. The neighborhood is very walkable; however, many employment centers and retail destinations are not very accessible by transit therefore many residents of OTR still have to drive.

Do you think that this is a fair market price for a neighborhood in a city like Cincinnati where approximately 10% of the population utilize some form of alternative transportation?

Shoup: The proposed price of $300 a year for a residential parking permit seems chosen to generate revenue rather than to manage parking. It is less than $1 a day, but an on-street parking permit may not be worth even that low price to some residents. I would instead aim for the fair market price, which means the price at which demand equals the available supply.

Yung: The city is currently in the midst of a zoning code rewrite and the topic of parking requirements is up for debate. Last year the city eliminated parking requirements in the CBD and OTR; however, there is little appetite from city leaders and planners to expand the effort to other areas.

In discussions, some developers advocated for parking requirements as a way to protect on-street parking impacts around the University of Cincinnati and other high-traffic commuter areas. They argue that there are not enough parking options in the area and other developers, eager to cut costs by cutting out parking if the requirement is eliminated, would incidentally create more demand for scarce on-street spots for students and visitors.This is similar to a debate in Portland regarding high-density apartments. What would your response to this be? Are there instances where you think parking requirements would need to be preserved?

Shoup: If Cincinnati uses fair market prices to manage on-street parking – the lowest prices that will leave on or two open spaces on every block at every time of the day – it won’t have to require off-street parking spaces for every land use. If the government regulated any other aspect of our lives as precisely as it regulates the number of off-street parking spaces everywhere, everyone would join the Tea Party.

Yung: Futurist seems to be talking about driverless cars as a way to streamline commutes for suburbanites however there is also some discussion on utilizing them as a automated taxi service in cities. What are your thoughts on driverless cars and what do you think their impacts will be on cities and parking reform?

Shoup: I don’t think driverless cars will have a big impact on cities during my lifetime. I do think that Uber, Lyft, Zipcar and the like are already having a big impact.

Yung: Can you elaborate on how car sharing services are impacting the parking demand market in cities?

Shoup: Uber, Lyft, and Zipcar reduce parking demand because they can substitute for a second car or even a first car for some families. Several studies of carsharing services like Zipcar have found that each shared car replaces between 9 and 13 privately owned cars because carshare members reduce the number of cars they own or avoid buying a car as a result of joining. Here is the link to a recent article about how carsharing reduces vehicle ownership and thus parking demand. And here is the link to another article about how dedicating an on-street parking space for a shared car reduces the demand for car ownership and thus parking demand.

Yung: SFpark has been widely discussed as a success in national urban blogs. Do you think this system is the ideal model for ensuring demand driven market pricing for parking in cities? Are there any suggestions that you would make to change or improve this system?

Shoup: SFpark, San Francisco’s new pricing program, aims to solve the problems created by charging too much or too little for curb parking. If the price is too high and many curb spaces remain open, nearby stores lose customers, employees lose jobs, and governments lose tax revenue. If the price is too low and no curb spaces are open, drivers who cruise to find an open space waste time and fuel, congest traffic, and pollute the air. SFpark bases the price adjustments purely on observed occupancy.

Planners cannot reliably predict the right price for parking on every block at every time of day, but they can use a simple trial-and-error process to adjust prices in response to occupancy rates. This process of adjusting prices based on occupancy is often called performance pricing. Beyond managing the on-street supply, SFpark helps to depoliticize parking by setting a clear pricing policy.

San Francisco charges the lowest prices possible without creating a parking shortage. Transparent, data-based pricing rules can bypass the usual politics of parking. Because demand dictates the prices, politicians cannot simply raise them to gain more revenue. Here is the link to a short article that explains SFpark.

Immediately after conducting this interview with Dr. Shoup, it was revealed that many recently constructed parking garages in Portland, as required by law, are now sitting mostly empty.

Dr. Donald Shoup’s lecture at the Mercantile Library will take place tomorrow at 6pm. The Mercantile Library is located less than a block south of Government Square and is accessible by a plethora of Metro Bus routes. It is also located near the Fountain Square Cincy Red Bike station.

Parking Guru Donald Shoup to Speak at Mercantile Library Next Tuesday

Donald Shoup, world renowned economist and researcher, will be speaking at the Mercantile Library on October 28.

For those unfamiliar with his work, he is a forerunner in examining the effects of parking policy on urban economics, which he presented in his 2005 book The High Cost of Free Parking. The book was preceded by an article of the same name, which Shoup wrote in 1997.

Mandated parking requirements, it seemed, was an issue that many planners felt ill-equipped to tackle. It had not been lectured on in their classes, and textbooks were often silent on the matter. And according to the American Planning Association, planners requested information on this topic more than any other.

Mandated minimum parking requirements have been a zoning code staple since the widespread adoption of the automobile. For example, a zoning code may require that apartment buildings supply one parking space per unit, or that a restaurant provide one parking space for every 300 square feet of space used by patrons. While parking minimums are typically set by the use of a property, they vary based on what kind of zoning district the property is found in – for example, a low density, auto-oriented district will require more spaces than a dense area that is more walkable.

As planners wrote their zoning codes, they had few tools at their disposal to discern where they should set their parking minimums, which led to the common practice of borrowing numbers used by other cities that often did not account for local conditions. And as Shoup found, even if planners could observe capacities and usage for, say an office building, not every office building was created equal. An office building that allowed employees their own offices instead of cubicles would have fewer employees per square foot and therefore should conversely be assigned a lower parking spot minimum.

And since minimums were based on the maximum capacity for a particular use, an additional quandary arose from requiring parking that would very certainly sit unused most of the time.

Upon examination of the issue, the numbers used to set minimum parking requirements were considered arbitrary – a best guess, and applied with broad brushstrokes. Therefore, Shoup set out to examine where and how the cost of this imposition on property development was being absorbed.

Analyses were able to estimate how much development costs increase due to parking minimums, and the results bred a new understanding of how parking requirements can increase the cost of real estate, particularly in urban areas. A portion of these costs are presumably passed on to tenants and patrons, regardless of whether they own a car and utilize a parking space.

When applied to denser historic districts built before the automobile, lots frequently are not large enough to provide the amount of spaces that a zoning code may require for parking. The result is a tangible barrier to redevelopment, revitalization and the adaptive reuse of buildings.

Brian Bertha, a researcher in California, analyzed project costs before and after the establishment of parking minimums in 1961 in Oakland. He found that after the requirements were put in place, construction costs per dwelling unit increased 18%, housing density fell by 30%, and land values decreased by 33%.

In Shoup’s research he speculates that if “emancipated from minimum parking requirements, land and capital will shift from parking to uses that employ more workers and pay more taxes.”

Instead he advocates making parking a pay-per use amenity, and thus encourage greater use of public and active transportation. Furthermore, he believes that revenues generated from on-street parking be utilized within neighborhood improvement districts in order to provide more amenities in those districts.

Just as we are taught in economics class that “there’s no such thing as a free lunch,” Shoup uses his skill for economic analysis to illustrate that there’s no such thing as a free parking space.

Driving is still necessary for ease of accessing employment in most American cities, but Shoup’s analysis allows policy makers to think critically about the interconnectedness of these policies, and the role that a thoughtful approach can play in reducing congestion, decreasing auto-dependence, and removing barriers to investment.

If you would like to attend Dr. Shoup’s lecture, he will be speaking downtown at 6pm at the Mercantile Library at 414 Walnut Street. Tickets can be purchased online for $10 for members and $15 for non-members.

22 Photos From the 2014 Edition of Park(ing) Day in Cincinnati

The 2014 edition of the international protest related to the wasteful use of public land for automobile parking took place this past Friday. PARK(ing) Day, as it is known, took place in hundreds of cities across the globe, including Cincinnati.

As with past years, the majority of Cincinnati’s parking spaces turned temporary parks or hangouts were concentrated in the center city. Perhaps the most prominent installations were in Over-the-Rhine and across the river in Covington.

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EDITORIAL NOTE: All 22 photos were taken by Travis Estell and Bradley Cooper for UrbanCincy on Friday, September 19.

Dive Into the Topic of Tiny Living Spaces This Friday at the Niehoff Urban Studio

Tiny Houses Event FlyerTo most people, tiny homes often are viewed as a novelty. The idea of building a small house or living in an apartment with less than 500 square feet sounds like living in a closet.

However; with the rising cost of housing and the growing desire for people to do more outside their homes, the idea of tiny living is stirring a new conversation. Tiny homes, for example, could be used to address urban revitalization, homelessness or retrofitting existing structures, such as this garage project in Atlanta.

This is why UrbanCincy has partnered with the Niehoff Urban Studio to host Tiny Living as part of Digressions in Art, Architecture and Urban Design. The event, which will take place this Friday, will feature presentations on the subject of tiny homes and an expert discussion panel.

Writing about the event, organizer Ana Gisele Ozaki postulated that tiny homes are “an antithesis of suburbanization and the ‘American Dream’ as we know it, tiny spaces/living fundamentally question consumption of our current system by proposing repurpose of materials, as a clear response to the 2009 housing crisis and many other flaws of our current economic/financial system.”

This event is part of the continuing partnership between the Niehoff Urban Studio and UrbanCincy to examine complex urban issues. Earlier this year UrbanCincy moderated the panel discussion for the Metropolis & Mobility workshop focused on Cincinnati’s Wasson Way Corridor.

The Tiny Living event is free and open to the public, and will run from 5pm to 8pm. The evening will begin with interactive pieces produced by the DPMT7 and ParProjects, and will be followed by a series of short presentations at 6pm to get the discussion started. The panel discussion will begin around 7:30pm.

The Niehoff Urban Studio can be reached via Metro*Plus and the #24, #78 Metro bus lines. The collaborative, public studio is also within one block of a Cincy Red Bike station.

EDITORIAL NOTE: UrbanCincy‘s local area manager, John Yung, will be one of the panelists at this event. John is also a graduate of the University of Cincinnati’s Master of Community Planning program.

EDITORIAL: Cincinnati Should Embrace John Cranley’s Residential Parking Permit Idea

We subsidize parking for automobiles in almost all situations in our society, but it is especially true when it comes to public parking. This can be seen quite clearly throughout the city where public parking garages, lots and on-street spaces are regularly priced below market rates.

A recent proposal by Cincinnati Mayor John Cranley (D) to charge $300 annually for a residential parking permit in Over-the-Rhine was met with immediate criticism. Perhaps the criticism was fair given that such a rate would be the highest in the country by a long shot. And yes, that includes far higher than what’s charged in San Francisco, Washington D.C. and New York.

UrbanCincy, however, believes this says more about the sad state of subsidizing parking than anything else. In fact, we believe that the $300 annual parking permit is reasonable.

To better understand how this proposed permit fee stacks up, let’s consider that it averages out to approximately $25 per month. According to the most recent State of Downtown report, the average monthly parking rate in the Central Business District, Over-the-Rhine and Pendleton is $89. This average accounts for approximately 36,400 monthly parking spaces available in 2013.

While this average monthly parking rate is skewed by much higher rates in the Central Business District, many lots and garages reserved for residential parking in Over-the-Rhine charge between $40 and $110 per month. This means that Mayor Cranley’s proposal would put the city’s on-street parking spaces nearly in-line with their private counterparts.

This is a smart move. We should stop subsidizing parking as much as possible. Therefore, such a proposal should not only be examined in greater depth for Over-the-Rhine, but all of Cincinnati’s 52 neighborhoods.

According to parking management policy expert and UCLA professor Donald Shoup, charging market rate prices is particularly important for a variety of reasons. One of the primary reasons, however, is the fact that the higher prices will cause higher turnover and thus positively influence a number of other factors such as reduced congestion from cars circling the block and reduced pollution from those cars’ exhaust.

UrbanCincy recommends identifying what the market rate for parking is throughout the city and establish districts where on-street residential parking permits can be purchased. The proceeds from those permits could then be reinvested back into those neighborhoods for improvements of selected by those neighborhoods.

In Over-the-Rhine it has been suggested that the money could go toward offsetting the operating costs of the first phase of the Cincinnati Streetcar, but in other neighborhoods it could support public art, cleanup activities, public art or whatever it is that neighborhood desires.

This may not have been what the mayor had in mind when first proposing the residential parking permits for Over-the-Rhine, but if it was then Mayor Cranley deserves serious kudos.