Seattle’s high parking rates are good for business….in Bellevue
Back in 2010, I wrote that Mayor McGinn’s proposal to raise parking rates in downtown Seattle would have a negative impact on the economy:
Using higher prices to balance parking supply with parking demand harms the economy. It means demand goes down and fewer consumers are available to spend money. Higher parking prices also translate to fewer dollars in the pockets of consumers. Collecting $5 million from higher parking rates is $5 million less for businesses in Seattle.
In today’s Seattle Times is an article about businesses losing up to 50% of their customers to the higher parking rates. In the article, Mike Estey, manager of parking operations for Seattle says:
"Parking is well utilized, but you can find a space," he said. "That was the goal of the plan."
Haha....there is always a space available because there are less customers. So by definition, the city’s goal of creating available parking supply by raising parking prices means there will be less demand.
That is basic economics.
But there is a better way to fix the problem and encourage economic activity at the same time.
The supply/demand/price equation is out of balance not because of price, but because of supply. The city has been eliminating parking spaces for two decades. A supply-side response would keep rates low, balance the equation and lead to more consumers with more money in their pockets to spend.
McGinn’s demand-side response to parking is social engineering and offers yet another glimpse into Seattle’s long history on its war on cars. In a free-market environment and for those who are paying attention and understand how consumers and businesses react to such restrictive urban policies, there is opportunity…and Seattle’s antithesis, Kemper Freeman is laughing all the way to the bank...
Despite the weak economy, the Bellevue Collection stores have had an average gain of 17.4 percent month over month for 26 months in a row, Freeman said.
As Seattle continues to squeeze businesses, consumers and drivers with restrictive, demand-side policies, substitutes will emerge, and they will prosper.