Seattle’s high parking rates are good for business….in Bellevue

February 22, 2012

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.

Parking is bad not because of low price, but because of diminishing supply

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.

Retail mogul Kemper Freeman talks shop

As Seattle continues to squeeze businesses, consumers and drivers with restrictive, demand-side policies, substitutes will emerge, and they will prosper.  

Comments

more free parking = more cars, more congestion

Why does the Washington Policy Center advocate for taxpayers to subsidize free parking for cars anyway - shouldn't market forces determine prices? After all if you keep parking free and just focus on building more and more of it, all you get are acres of ugly parking lots, garages instead of real businesses downtown, and more traffic jams on the street while people circle looking for the "perfect" spot.

This recent article from LA Magazine (long - and worthwhile) offers a more balanced look at the subject: http://www.lamag.com/features/Story.aspx?ID=1568281

Here's a long quote:

"The problem with parking is that meters are priced equally. 'Imagine what would happen at Dodger Stadium if every seat cost the same and went on sale game day,” says Dan Mitchell, an engineer at LA DOT. “Everyone would run for that seat behind home plate—it would be insanity. But that’s what we have now with parking—equal pricing.'

"This spring the LA DOT plans to introduce an $18.5 million smart wireless meter system. Called ExpressPark, the 6,000-meter array will be installed on downtown streets and lots, along with sensors buried in the pavement of every parking spot to detect the presence of cars and price accordingly, from as little as 50 cents an hour to $6. Street parking, like pork bellies, will be open to market forces.

"As blocks fill, prices will rise; when occupancy drops, so will rates. In an area like downtown, people will park based on how much they’re willing to pay versus how far they are willing to walk to a destination. In a trendy area like Melrose Avenue’s shopping district, where parking on side streets is forbidden to visitors, they could open residential blocks to market-priced meters, wooing home owners by guaranteeing that meter profits would be turned over to them in the form of property tax deductions. (That benefit could add up to thousands of dollars a year per household.)

"Brooklyn’s Park Slope neighborhood is already experimenting with a version of the system, and so are San Francisco, Seattle, and Washington, D.C. If adopted by more cities, the system would hopefully guarantee one open space of parking at any time of day on every metered block by pricing out drivers who are more willing to park on cheaper blocks. Should a block remain empty, its meters will drop their hourly rates over the course of a month.

"Nobody, of course, really knows what will happen once L.A.’s system powers up. After Seattle conducted its own study on performance-based parking, engineers noticed an oddity: When prices dropped on certain blocks, drivers actually parked less. No one can explain this."

Which way do I go

Too bad some of those people once shopping in Seattle and now shopping in Bellevue are shelling out cash on the 520 bridge.