22 July 2008

Real Time Parking Pricing

via Coyote Blog, the NY Times reports that San Francisco will charge more for parking when traffic congestion is highest and places are scarce.

Since theory (and empirical evidence!) points to heavy pollution when people are circling to find a spot, it makes sense to raise the cost of parking to increase the turnover in spots.

Those who believe parking spaces are a human right should move to the countryside. Those in a hurry will still use garages or valets. Those in the middle will be forced to consider just how long their business will take.

Others (and Coyote) worry that planners will use real-time pricing to force people to live in high-density areas. I'm not sure about the effects of parking pricing on the marginal decision of where to live, but there could be some effect.

The price of parking in low-congestion times should be zero, of course, but don't count on it. I cannot count the number of times that I have had to pay for a spot in a vast wasteland of parking. Big surprise -- those places are often managed by the government.*

Bottom Line: San Francisco leads the way on environmental pricing (again). If it's scarce, the price should rise!

* Don't give me the "monopoly can force you to pay" line. An efficient monopolist would want to lower prices to get more people to park in the location; government sets prices somewhere, sometime, for eternity. If you want to see creative parking pricing, check out downtown garages in NYC or SF.

1 comment:

Silas Barta said...

Some concerns:

Road pricing is not, and should not be viewed as, a simultaneous long-term solution to pollution. It may stop the current pollution that accumulates due to the traffic congestion, but anything that leads to accurate pricing of resources and smoother operation of infrastructure will just increase long-term (and probably short-term) economic growth, which just increases the demand for cheap energy sources, especially those that dump externalities on others.

Charge congesters for congesting and polluters for polluting. Don't expect one to solve the other. (And don't equate "government doesn't know the right price" with "hey!!! Let's enjoy the harms from severe underpricing". Bob, I'm looking in your general direction here.)

Also, while long-term we can neglect stupid resource owners, short term they cause real harm. Farmers and lot owners might have the right market signals, but still be too stupid to act on them before going out of business.