In August of 2011, about one-quarter (7,000) of San Francisco’s 28,800 metered parking spaces in eight pilot areas (and in 15 of 20 city-owned parking garages) started using dynamic, demand-responsive meter pricing to “open up parking spaces on each block and reduce circling and double-parking,” according to the website of the pilot project, known as SFpark. SFpark uses “smart meters” and ground sensors to measure parking occupancy and adjusts prices accordingly.
In pilot areas, meter pricing for street parking range from between 25 cents an hour to a maximum of $6 an hour, depending on demand. Hourly rates in city-owned garages adjust to demand, and decrease where there are many empty spaces. Rates are adjusted by no more than 50 cents per hour down or 25 cents per hour up, and no more frequently than once every month.
Now that SFpark has about two years of parking data from the pilot program, some of the major findings have recently been published in the Journal of the American Planning Association in an article titled “Getting the Prices Right: An Evaluation of Pricing Parking by Demand in San Francisco.” Some of the results are summarized here at the SF StreetsBlog, including the following:
1. UCLA urban planning professor Donald Shoup (the “guru of smart parking policy” and one of the co-authors of the study along with UCLA doctoral student Gregory Pierce) said, “The biggest surprise I got was that prices went up and down, but overall, they stayed the same [on average]. The average price actually declined by 1 percent. That surprised everybody. People thought it was just a way to jack up prices, but the city specifically said, ‘We are going to set prices according to this principle.’”
2. The pilot program is providing hard evidence that raising and lowering meter prices is an effective way to keep enough parking spots available for drivers who need them — and to help ensure too many spots don’t sit empty. Keeping, say, one parking spot open on every block “will make the transportation work best — it’ll reduce cruising, speed up buses, reduce air pollution,” said Shoup. “It’s easy to explain a goal like that — we’re aiming at what you want to see.”
3. The “elasticity” of parking demand — the degree to which price changes affect parking occupancy — has varied across different locations and times of day (due to different trip purposes, they surmise), and that drivers changed their behavior most profoundly after the second price adjustment, possibly due to a spike in awareness of the program. As prices have been refined, elasticity has declined.
4. By location, prices appeared to have the lowest impact in highly residential neighborhoods like the Mission and the Marina, while retail districts like Fisherman’s Wharf and the Fillmore saw the most drastic adjustments to new prices (see top elasticity chart above).
5. Drivers were most sensitive to changes in parking prices in the early afternoon (noon to 3 p.m.) than before noon or after 3 p.m., and were more price sensitive on weekdays than during the weekend (see bottom chart above).
From the study’s conclusion:
With performance-parking prices, drivers will find places to park their cars just as easily as they find places to buy gasoline. But drivers will also have to think about the price of parking just as they now think about the prices of fuel, tires, insurance, registration, repairs, and cars themselves. Parking will become a part of the market economy, and prices will help manage the demand for cars and driving.
If SFpark succeeds in setting prices to achieve the right occupancy for curb parking, almost everyone will benefit. Other cities can then adopt their own versions of performance-parking prices. Getting the prices for curb parking right can do a world of good.
MP: The economic lesson here is that: a) whenever you have chronic congestion (or a chronic shortage or parking spaces) it’s almost always because of a failure to apply market pricing, and b) market pricing will almost always eliminate or reduce chronic congestion (or chronic shortages of parking spaces).