Helping the Neighborhood by Charging for Parking

Helping the Neighborhood by Charging for Parking

Helping the Neighborhood by Charging for Parking

When economists look at a resource (including their own work lives!), they contemplate whether that resource is being used in the most effective way.

Donald Shoup has been writing for years about the resources of the “curb lane”–that is, where drivers often park their cars. His ongoing theme is that free (or underpriced) curbside parking often seems attractive to both drivers and nearby stores and businesses, but when the predictable tradeoff of the seemingly “free” resource is that drivers are cruising up and down streets and can’t find a place to park near where they want to go, the attraction of “free” is diminished.

In a recent essay, Shoup explores the idea of “Parking Benefit Districts” (Journal of Planning Education and Research, published online March 2023). He points out some of the tradeoffs of “free” parking, like the wasted time and energy of drivers as they cruise the streets, criss-crossing with pedestrians and bicyclists, looking for a spot. His common recommendation is that when parking is scarce, parking meters should use prices that vary by location and time of day, in such a way that if you are looking for street parking, there will usually be an available space within a block or two–if you are willing to pay the price, of course. In some cases, the appropriate answer may be to reduce curb parking and free up space for bus and bike lanes, for outdoor dining, or for additional trees and less cluttered sidewalks.

Shoup writes:

Transportation planners have neglected curb parking because nothing is moving, and land-use planners have neglected it because it is in the roadway. No one seems to know how to solve the curb parking problem, except for followers of Nobel laureate William Vickrey who proposed that cities should set the prices for curb spaces to “keep the amount of parking down sufficiently so there will almost always be space available for those willing to pay the fee” (Vickrey 1954). Prices can vary by place and time of day to leave one or two open curb spaces on every block. Where all but one or two curb spaces on a block are occupied, the parking is both
well used and readily available. …

Market prices for curb parking exemplify what Jaime Lerner (2013) called urban acupuncture: a simple touch at a critical point (in this case, the curb lane) can benefit the whole city. In another medical metaphor, streets are a city’s blood vessels, and overcrowded free curb parking is like plaque on the vessel walls, leading to a stroke. Market prices for curb parking prevent this urban plaque.

The biggest problem with charging for curb parking is politics. Cities charge for public services like water and electricity to recover the capital and operating costs of providing them, but curb parking doesn’t have any obvious capital or operating cost to recover. Unmoored from the need to recover any costs in the city’s budget, curb parking prices are purely political (Manville and Pinsky 2021). How can cities create political support for paid parking?

The idea of a “parking benefit district” is that the money spent on parking in any given neighborhood should go to that neighborhood, to be used for local purposes like picking up garbage, planting trees, cleaning up graffiti, fixing sidewalks, and so on. As Shoup writes:

The goal is not to persuade drivers they should pay for curb parking. The goal is to convince stakeholders they should charge for curb parking. Anyone who does not store a car on the street may begin to see free curb parking the way landlords see rent control. Free curb parking is rent control for cars. If people want better public services more than they want free curb parking, the curb lane can benefit everyone, not just drivers who store their cars on the street.

Shoup offers a brief discussion of cities that have enacted a version of parking benefit districts for certain areas of the city:


Shoup offers a thought experiment of how a parking benefit district might work in New York City. He writes: “Because New York does not charge drivers for parking in 97 percent of its three million curb spaces, it offers a titanic subsidy for cars. If the city charged only $5.50 per curb space per day, it would earn $6 billion a year, about the same as the $6.1 billion farebox revenue from all New York City public transit in 2019 …” He points out that on the Upper West Side of Manhattan, off-street parking costs from $35 to $147 per day. If parking meters for this area collected the low-end number here–$35/day–it could provide more than $100 million per year for street-level neighborhood improvements.

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Timothy Taylor

Global Economy Expert

Timothy Taylor is an American economist. He is managing editor of the Journal of Economic Perspectives, a quarterly academic journal produced at Macalester College and published by the American Economic Association. Taylor received his Bachelor of Arts degree from Haverford College and a master's degree in economics from Stanford University. At Stanford, he was winner of the award for excellent teaching in a large class (more than 30 students) given by the Associated Students of Stanford University. At Minnesota, he was named a Distinguished Lecturer by the Department of Economics and voted Teacher of the Year by the master's degree students at the Hubert H. Humphrey Institute of Public Affairs. Taylor has been a guest speaker for groups of teachers of high school economics, visiting diplomats from eastern Europe, talk-radio shows, and community groups. From 1989 to 1997, Professor Taylor wrote an economics opinion column for the San Jose Mercury-News. He has published multiple lectures on economics through The Teaching Company. With Rudolph Penner and Isabel Sawhill, he is co-author of Updating America's Social Contract (2000), whose first chapter provided an early radical centrist perspective, "An Agenda for the Radical Middle". Taylor is also the author of The Instant Economist: Everything You Need to Know About How the Economy Works, published by the Penguin Group in 2012. The fourth edition of Taylor's Principles of Economics textbook was published by Textbook Media in 2017.

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