The Economics of Parking

Next time you're cruising around the block for 15 minutes looking for a free parking spot there are some numbers to think about. Over the course of a year, this type of parking search results in innumerable excess miles driven (one group puts the number at around 950 000 for a 15-block business district) and all the associated pollution and greenhouse gases. In large cities, this is also a major cause of gridlock with up to 45% of drivers claiming they were just looking for a parking spot. The solution? According to Canadian-born William Vickrey, winner of the 1996 Nobel Prize in economics: increase the cost of curbside parking. By increasing the cost of street parking to market value on par with off-street parking lots, policy makers can fix prices such that they ensure an 85/15 ratio -- "85% occupancy means that the curb spaces will be well used and 15% vacancy means that they will be readily available," says Douglas Shoup, professor of urban planning at UCLA. Of course most drivers would balk at the idea of more expensive curbside parking, but in cities where this kind of idea is being considered and implemented the increased revenues are put directly back into the metered communities.