On-street parking charges a better solution than Harding plan

One important lesson from economics is that problems are most efficiently solved by setting prices right rather than by regulations mandating particular actions. So it is with the problem identified by Brisbane residents of being parked out of suburban streets by residents and visitors of new apartment blocks. Labor’s lord mayoral candidate Rod Harding has proposed that developers should be required to include more car parks in their apartment developments, but this has been strongly and rightly criticised by both the Property Council of Australia, for the increase in property development costs that would result, and by Rail Back on Track, for not addressing the underlying problems leading to the shortage of parking. I was very happy that Robert Dow from Rail Back on Track referred to the issue of pricing in his comments on the Harding proposal reported in the Brisbane Times:

“If people are having issues with cars parking in their street, there are obvious solutions: fix the bus network, issue residential parking permits or charge cars for the privilege to park on the street.”

Robert Dow has economists on his side regarding the charging of cars for parking on the street. Appropriate pricing of on-street parking would recognise on-street parking spots are not free. They are Council assets with an opportunity cost and should generate a rate of return. Appropriate pricing would help resolve the shortage of spots by sending the right signals to residents, visitors and developers. Parking charges would naturally regulate the demand for parking spots in several ways, such as by discouraging some people from traveling to busy precincts in cars and encouraging them to take public transport instead, and by discouraging visitors from staying for too long. Also, by demonstrating a clear revenue stream from parking in an area, on-street parking charges may encourage private sector car parks to be developed.

The high cost of free parking was nicely articulated in an excellent 1997 article by UCLA’s Donald Shoup, which should be required reading for anyone involved in the car parking policy debate:

The high cost of free parking

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8 Responses to On-street parking charges a better solution than Harding plan

  1. bjreconomics says:

    Good article Gene. The main problem I see with this debate is the Council restrict the development of car park towers in town planning. The planning restriction is not able to be over come by the private sector even if the market price for car parking is very high. Therefore, we see the rise of private property owners trying to provide paid parking in their homes a bit like Air BnB. Agree Council forcing more parking is not a good method but its planning restrictions are also not a good idea.

  2. Katrina Drake says:

    Roads are expensive, far to valuable to waste on free parking of stationary vehicles.

    In the suburbs people park unsightly boats, caravans, trailers, old cars and the like semi-permanently for free, to avoid storage costs.

    There are many examples in Brisbane where additional lanes are required for efficient commuting and cyclist safety. ( Sylvan Road Toowong, High Gate Hill )

    There is a definite need for the planning and provision of more covered off street parking.

    Given the increased frequency of hail storms in Brisbane, and the protection offered by covered parking , I cannot fathom why council doesn’t properly address the problem.

    The uncovered park and ride provide by the BCC council are next to useless, I won’t use them and leave my car unprotected and parked in the full sun all day.

  3. Glen says:

    The price impact on developement for car parking is enormous, each car space requires a minimum 36 sq metres of space for access and parking space. If anyone wants to see the effect of poor planning in regards to car parks they should look at Townsville. They have mandated a minimum 1.5 spaces per unit, the highest anywhere I am aware of. Given the fact that most developements currently have approx 40% one bedroom, 50% two bedroom and 10% three bedroom units this equates to almost one car space per bedroom on a 100 unit developement, it just defies logic. The effect of this is that not one single application for a multi level unit developement has been received for the Townsville CBD since the legislation was introduced two years ago.

  4. Glen says:

    Jim, the extra car park spaces each developer has to provide in each development in Townsville means the cost of each unit is prohibitive for the project to proceed. It has gone form an average 1.1 car parks per unit which was negotiated with the council to a mandated 1.5. The estimates are about $50 k extra per unit, this puts the one bedroom units at a price disadvantage that makes them difficult to sell, they are always the core of sales these days.

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