The release of Auckland Transport’s draft Parking Discussion Document has stimulated some much-needed debate on parking issues. Various aspects of this debate has been covered in a number of media articles and blog posts. This article from Friday, however, caught my attention.
It discussed a topic that is close to my heart, namely residential parking permit schemes. I feel passionately about residential parking permits because they seem – at least to me – a very, very unwise public policy. But first a necessary disclaimer: I am employed as a transport consultant by this company, which provides parking advice to many wonderful clients across Australia and New Zealand. As such, the views expressed in this post must not be construed as representing those of my clients or even my colleagues. They are mine and mine alone.
In the rest of this post I will present four reasons why I think residential parking permits are unwise. First let’s define what we’re talking about, i.e. what do I mean when I say “residential parking permit scheme“? The concept is pretty simple and probably well-understood by most of us: In areas with high demand for on-street parking, Councils will often provide preferential access to on-street car-parks for people who happen to reside in the surrounding area. This is typically managed by way of a permit that people display on the windscreen of their car. The area covered by the St Mary’s Bay parking permit scheme (where permits cost a ridiculously cheap $155), for example, is illustrated below.
The AT website explains the purpose of residential parking permit schemes as follows:
Central Auckland’s residential parking policy provides a way to fairly share on-street spaces between different users, especially in areas where parking is in short supply. The goal is to establish a balance that accommodates the needs of all users, including residents, visitors, business and commuters.
But what does AT mean when they say “fairly share”? In my opinion there is nothing “fair” about residential parking permit schemes. Indeed they are the opposite of “sharing”. What these parking permits do is reserve, or quarantine, on-street car-parks for a select group of people. And in the process cause a lot of issues that may only crop up years down the track.
Let me present four reasons why residential parking permits are unwise, at least when they are heavily discounted from the market value of the on-street car-park.
First, residential parking permits are unwise because they are unfair. More specifically, they take a public resource (on-street parking) and reserve it for a particular group of people who have no more right to that resource than anyone else. Think of the public opposition if we tried to manage public off-street parking this way, i.e. we took the Victoria Street car-park building and – instead of being open to the public – we reserved it solely for local residents at a cost of $155 per year.
Think of all the employees, businesses, and shoppers who would be adversely affected by these car-parks being taken out of the public pool and instead dedicated to residents. Think of the revenue that would be lost to council, revenue which would then need to be covered by higher property rates on everyone else. But the key message residents need to understand is this: You don’t own the street in front of your house; it is a public resource that needs to be managed in the interests of wider society, not just you.
The second reason I think residential parking permit schemes are unwise is because of the inherent “first mover advantage”. Put another way, residential parking permits are great when 1) your area is the only area that has them and 2) not many other people in your area want them.
Consider the St Mary’s Bay example, and now think about a situation where Herne Bay, Ponsonby, and Freeman’s Bay also had their own parking permit schemes. The end result, when you generalise parking schemes across the inner-city, is that it becomes very cheap and easy to parking your car close to your house, but very difficult to drive it anywhere – therein undermining the very reason why you want to own a a car in the first place! In my experience the people who advocate for residential parking permit schemes never consider this “end game”, where they get in their cars and go to drive somewhere else that also has a parking permit scheme, only to find they can’t park and are subsequently hugely inconvenienced. Think also what would happen if the number of applications for parking permits exceeded supply? Yup, we’d need to find another way to ration the allocation of permits (which is discussed in more detail below).
The third reason I think residential parking permit schemes are unwise is because they create poor incentives and are difficult to administer. By this I mean they enable people who qualify for the permit to use a very valuable resource very inefficiently. Think of households that go on holiday and leave their car parked on street for weeks. Instead of reconsidering how many cars they actually need, new residents might simply bring vehicles with them and park them on-street. When confronted with artificially low prices for on-street parking permits, residents might decide to redevelop their garage into a detached unit and park their car on-street. Administration is also a major headache, mainly because permits create a massive incentive for scamming. Compare the cost of parking downtown (say $2,500 p.a.) to the cost of a parking permit (say $100-$200 p.a.).
There will surely be residents who don’t need parking permits but who apply for them anyway on behalf of friends/visitors, or even worse sell them to a commuter. Examples of parking permit scams abound in the U.K. and Australia. Of course, attempts to scam the parking permit system could be managed through increased enforcement and administration, but these create further costs for Council.
The fourth and final reason why I think residential parking permits are unwise is because they don’t tackle the underlying problem. That is, calls for parking permit schemes usually arise in cases of high demand, especially where commuters are competing with residents. What parking permits do is simply displace commuter demand with residential demand. Of course the latter will be happy because they have been bumped up the preferential parking pecking order. Nonetheless the underlying demand (and difficulty involved in finding a space) will likely remain – it’s just that now people will be competing with residents rather than commuters.
This is why way residential parking permit schemes are almost always accompanied by pay parking. And it’s the latter which actually maintains demand at reasonable levels, rather than the permit scheme itself. In this context, the primary effects of residential parking permit schemes is to force up the price of parking that must be paid by everyone who does not qualify for a permit, i.e. the residual non-preferred users. And as inner-city areas intensify, then the demand for permits will only increase, which in turn increases 1) the price paid by everyone else who parks and 2) the value of the permit subsidy to residents (which in turn will exacerbate the incentive issue mentioned earlier).
To provide an extreme example of just how resident parking permit schemes can go wrong, we only have to look to places like Amsterdam. There, some inner-city areas have a five year waiting list for a parking permit. The iAmsterdam website (which is generally designed to promote Amsterdam to visitors) provides the following warning for new residents:
Please note that in some districts, for instance in the centre of Amsterdam, the waiting list for a parking permit can be so long that it takes several years before a permit is issued.
I checked out the wait list for parking permits in Amsterdam and found that they actually ranged from 6 months up to 4.5 years (core blimey!), as illustrated below (NB: “Geschatte wachttijd ” and “jaar” translates as “wait time” and “year” respectively).
Think of how incredibly inconvenient this situation is for new residents. You move into a new suburb and want to get a permit but must wait 4.5 years. People may argue that Auckland is nothing like Amsterdam. But I tend to disagree: Auckland’s inner-city suburbs are very much at densities that are not too dissimilar from Amsterdam. The latter also has lower vehicle ownership, which would in turn reduce the demand for on-street parking. Moreover, Amsterdam is not intensifying greatly, whereas Auckland is – hence our need to manage on-street parking efficiently will increase in the future.
So whenever I hear calls from resident groups asking for a parking permit scheme I just shake my head and try and emphasise the following points:
- Residential parking permits are unfair, insofar as they prioritise a public resource for a particular group of people based simply on where they live;
- They are also inconvenient, insofar as they make it easy to park your car in the area where you reside, but less convenient in other areas where you might travel;
- They also create poor incentives and are difficult to administer, insofar as they discourage residents from managing the demand for on-street parking and encourage cheating; and
- They also are not an enduring solution, insofar as they do not tackle the underlying problem (excess demand) and instead ration access based on location and first-mover advantage.
So you may well be wondering what I would do instead of parking permits?
Well, in situations of high demand I’d simply implement pay parking and set the hourly price at a level that kept demand at a high but not over-saturated level. This would mean you could almost always find a park when you needed it, but you’d just have to pay for it. Payment need not be made via meters, which are expensive, but could instead be processed by a much cheaper “phone and pay” system. Under such a system you would be required to text your number plate to a special-number after you’ve parked. You then text when you leave and subsequently get charged the appropriate amount (possibly to your AT HOP account).
In such a situation I would allow people (anyone, not just residents) to buy an annual parking permit, but the price of this permit should not be discounted too much from the market price, i.e. what can be earned from casual users. Instead, it should be discounted to reflect lower collection/administration costs for Council.
Voila! We have an effective, efficient, and comparatively sustainable policy for managing demand for on-street parking. Aside from pricing, there’s other innovative things AT could do to encourage a well-functioning market for parking resources. Some of which I discuss in this paper, which was written a few years ago for a Canadian public policy institute. I think the paper provides a useful synopsis of many of the issues discussed in this post, if I do say so myself.
Appreciate hearing your thoughts, even if you disagree. But I can’t help but warn people how residential parking permits appear to be a real minefield that Auckland would do well to avoid.