Pricing Parking by Demand

GETTING THE PRICES RIGHT: AN EVALUATION OF PRICING PARKING BY DEMAND IN SAN FRANCISCO April 2, 2013 Forthcoming in the Journal of the American Planning Association Volume 79, Number 1, Winter 2013 Gregory Pierce and Donald Shoup Department of Urban Planning UCLA Luskin School of Public Affairs Los Angeles, CA 90095-1656 gspierce@ucla.edu shoup@ucla.edu

1

GETTING THE PRICES RIGHT: AN EVALUATION OF PRICING PARKING BY DEMAND IN SAN FRANCISCO

Abstract Underpriced and overcrowded curb parking creates problems for everyone except a few lucky drivers who find a cheap space; all the other drivers who cruise to find an open space waste time and fuel, congest traffic, and pollute the air. Overpriced and underoccupied parking also creates problems; when curb spaces remain empty, nearby merchants lose potential customers, workers lose jobs, and cities lose tax revenue. To address these problems, San Francisco has established SFpark, a program that adjusts parking prices to achieve a target parking availability of one or two open spaces on each block. To measure how parking prices affected parking occupancy in San Francisco we calculated the price elasticity of demand for onstreet parking revealed by 5,294 individual price and occupancy changes during the program’s first year. Price elasticity varies greatly by time of day, location, and several other factors, with an average value of –0.4. The average meter price fell 1 percent during the first year, so SFpark adjusted prices up and down according to local demand without increasing prices overall. The city can improve the program by making drivers more aware of the variable prices, reducing the abuse of disabled parking placards, and introducing seasonal adjustments for parking prices.

2

GETTING THE PRICES RIGHT: AN EVALUATION OF PRICING PARKING BY DEMAND IN SAN FRANCISCO In 2011, San Francisco adopted the biggest price reform for on-street parking since the invention of the parking meter. Oklahoma City...