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Parking must pay its way

Parking, parking, parking! In many places in many cities – even eco-friendly German cities – the price of parking is distorted by minimum parking requirements (MPRs). In these places, local governments regulate an over-supply of parking, which in turn holds down prices.

The Auckland city centre is not one of those places, as MPRs were removed from the area inside the motorway cordon in the late 1990s. As a consequence:

  • New developments provide a lot less parking. For example, the new Commercial Bay building would have had to provide over 2000 carparks if it was subject to the same MPRs as the rest of the Auckland isthmus. It’s actually providing 278 carparks – 85% less.
  • The price of parking is higher, as new parking garages must “compete” with other land uses, such as valuable commercial, retail, and residential space. If parking doesn’t pay its way, it doesn’t get built.

Furthermore, the price of parking will tend to rise over time as a result of supply and demand interactions. New demand for parking will tend to be met with increased supply. However, new parking supply will tend to be costlier, as cheap surface carparks are likely to be redeveloped and new city centre parking will increasingly be provided in expensive structures.

In fact, parking fees has been rising. In November 2014, Auckland Transport announced that it would end earlybird discounts – meaning that all commuters would pay an all-day rate of $17 to park. In July 2015, AT hiked the all-day price to $24. Other operators have followed suit. For example, Sky City now charges $22 for earlybird parking – whereas it only charged $14 in 2013.

Of course, not everybody pays to park. According to a 2007 survey of city centre parking spaces summarised in a recent report, there were 22,639 public carparks in the city centre, and 22,121 private non-residential carparks attached to businesses. Here’s the table:

Auckland city centre parking supply 2007

In the Auckland city centre, it is almost always necessary to pay to use public parking – e.g. parking garages or on-street parking. Private carparks attached to businesses may be offered as part of compensation packages, which means that people give up a bit of salary in exchange for a carpark that they don’t have to pay to use on a daily basis. Alternatively, employers may choose to rent them out for a monthly fee.

But here’s the thing. This data suggests that at most 50% of the nonresidential parking in the city centre is being offered free of charge. People using the other 50% must pay to park, either on an hourly or daily basis. The price to park for a day is now in the range of $20, and hourly prices tend to be higher.

In other words, the average price that people pay to park in the city centre could easily be $10/day or more, assuming that 50% of drivers get “free” employer-provided carparks and the remaining 50% pay market rates of around $20/day. Furthermore, the cost for the marginal parking user will tend to be higher, as the removal of MPRs means that they will be more likely to pay full market rates for parking.

This leads me on to the curious case of the Additional Waitemata Harbour Crossing (AWHC). Or rather, the peculiar assumptions about city centre parking prices that are incorporated into the transport modelling for AWHC.

If constructed, AWHC would be New Zealand’s most expensive single transport project – coming in at a cost of $5-6 billion to bore road tunnels under the Waitemata Harbour. A project of this magnitude demands extra-special care to validate all the model inputs and workings and ensure that they are as realistic as possible. Errors on a major project can have costly ramifications.

With that in mind, here are the parking price assumptions from the 2010 business case for the project. (They can be found on page 42 of the project’s transport modelling report.) They assume that the average price to park in the city centre was $2.83 in 2006, rising to $7.72 in 2041:

AWHC parking price assumptions

It is not clear how these assumptions were chosen, but they do not seem plausible. As I discussed above, the average parking cost in the city centre today could easily be higher than the modelling is assuming for 2041. Getting parking prices back in line with the modelling assumptions would require them to fall by perhaps 30% over the next decade.

A reduction in parking prices is highly unlikely without a major policy shift and a boat-load of investment in uneconomic city centre parking garages. In the absence of MPRs, parking must pay its way. It will not be built if it does not provide a competitive return to business or residential floorspace. This means that new parking will tend to be supplied at a considerably higher price than the AWHC modelling envisages.

Lastly, it is worth noting that parking prices can have a significant impact on transport outcomes. Public transport tends to be cheaper than driving if you have to pay for parking – but more expensive otherwise. Consequently, unrealistically low parking price assumptions will bias transport modelling results by inflating demand for driving and depressing demand for public transport and other non-car modes.

What do you think will happen to city centre parking prices?

43 comments to Parking must pay its way

  • RB

    My personal experience with CBD parking is that we (lease) parking spaces at around $250 per space per month (using average work days of 20 per month) at $12.50 / day. Most casual daily rates are around $17. We lease spaces not simply to save money but also to ensure that we have designated parks as casual parks often fill early. The ability to come and go during the work day is another attraction (not having to pay each time the park is entered). So the figures quoted above do indeed seem light.

  • Punch Drunk Baboon

    Presumably those parking price assumptions are used for all Transport project modelling not just AWHC. Which means the models are almost certainly systematically under-estimating PT and over-estimating car trips.

    I think a key law change that would be popular and make a huge positive difference would be to require employers to offer staff the choice of cashing in their parking perks. Lots of people would prefer that $100 a week as cash.

    • Gibbo

      Employers worked that one out long ago and most contracts say they will endeavour to provide a car park, but no guarantee. Work provided car parks in the CBD are on the decrease, and no remuneration if you loose it. This is also being driven by renewals for monthly parking now nudging $300 pm causing CFOs to have some reexamination of who really needs a work provided car park.

  • TheBigWheel

    Given that the AWHC might be expected to deliver increased demand for CBD parking, I would have thought the AWHC study should consider incremental parking costs in 2026 and 2041 not inflated current average costs. Looking ahead, the proportion of new car parks being provided “free” is surely much lower than 50%. So the costs would seem to be grossly understated. What’s the impact of this?

  • Jamie

    The only thing I can think is that those are average costs per hour for on-street, pay and display parking. Most of the CBD charges $4.00 per hour for parking, and it’s been like that for several years. I’m just not sure if it’s been like that since 2006.

    This fits the other areas, as well. Newmarket’s pay and display is definitely less expensive than the CBD. Henderson and Takapuna have some pay and display areas, but still have a lot of free parking around the place. Albany has little (or possibly no?) pay and display parking, even today.

  • BJ

    If high cost parking results in fewer cars in the city isn’t that a good outcome?

    • Yes of course, and it also means that it is completely counterproductive to funnel a whole lot more traffic at the city centre with a new 6 lane motorway, and totally insane to spend $6 billion on such an unwanted outcome!

      • Greg N

        And also means that their tolling amount assumptions and therefore their return on investment calculations are all fundamentally wrong from the get go.

        While I’m sure NZTA would simultaneously argue that higher parking rates means that they can justify/afford a higher toll on the old and new crossings to pay for the tunnels sooner than their models assume, and at the same time that the parking costs in the CBD bear no relevance to the number of toll paying users that will use said tunnels and/or the existing (and tolled) existing harbour bridge crossing.

        I would trust the BOI that results from NZTA pushing for an accelerated AWHC will see sense and reject this prime example of transport doublethink for the snake oil it is.

    • Looking at the document and the forecasts are indeed already all over the place, as the inputs are all well out of date now. For example they forecast CBD population to not reach 40k earlier than 2020 and, in one more spawly scenario later than 2030.

      Last year it reach 41K. The city centre does not flourish with more cars delivered into it.

      The road crossing AWHC is completely inconsistent with the best plans and infact the current direction of the development of the City Centre. To complete with the cities of the region AKL has to grow in quality as well as in quantity. This is a backward project and must be turned into a good one; the road lanes must be dropped for a RTN crossing.

      • Greg N

        Patrick do we have any idea of what a rail-only bridge crossing over the Waitemata Harbour would cost as a comparison?

        I know it would face opposition from boaties if it was a low height bridge, but presumably it could be designed to cater for the needs of most pleasure yachts.
        But do the big bulk carrier ships still need to go up the harbour to Chelsea these days? Or is it all now delivered via containers on trucks via POAL?

        I know they did when the original AWHC documents and studies were done, big ships did go up the harbour but is that a scenario still valid for today and the future?

        I know a tunnel is aesthetically pleasing, but it does add a lot of cost over a normal above water bridge surely.
        You can easily design and build attractive bridges these days, they don’t all have to look like the over engineered concrete shithouses that MoW used to design and build.

        • TheBigWheel

          Good question Greg.. indeed a rail bridge launching from what is currently the tank farm could deliver *all* of the following..

          – lower cost than a tunnel
          – quicker build than a tunnel
          – a structure more aesthetically pleasing than a tunnel
          – an iconic Auckland feature, better than the SkyTower.. how about a single, tall, inclined, suspension tower, like a mast, right out there in the harbour
          – a much shorter CBD / North Shore cycle way and foot path (and a very cool out-and-back recreational route via SkyPath)

        • I am very keen on the option of an LRT walking and cycling bridge from Wynyard Point across to Onewa. However because of Westhaven Marina it would have to include a high span, probably involving a corkscrew ramp at the city side, Tokyo has one of these for automated Light Metro on the Rainbow Bridge, here, it’s big: https://www.google.co.nz/maps/place/Rainbow+Bridge/@35.6373821,139.753913,1308m/data=!3m1!1e3!4m2!3m1!1s0x60188a309545656d:0x20fcbb1fa37a99af!6m1!1e1
          https://www.google.co.nz/maps/@35.6376972,139.7540531,3a,75y,101.18h,90.1t/data=!3m6!1e1!3m4!1sf5tZjDLh6TB4uSNar1GWSw!2e0!7i13312!8i6656!6m1!1e1

          Some would object to this, I think int could be wonderful, certainly the views from the bridge for both transit users and pedestrians and people on bikes would be wonderful and a tourist attraction. I also see a new contemporary non-traffic bridge as a positive addition to the harbour not least because it would obscure the current ugly one. It would presumably cheaper to build than rail only tunnels and offer additional walking and cycling amenity, especially from the new Wynyard park, and greatly improve access between the Shore and the city and human interaction with the harbour. A great vantage to watch the yachts heading out too…

        • A tunnel for rail is vastly simpler, and therefore much cheaper, that any road tunnel plans. A low bridge would create a huge change to the Waitemata. I’d oppose it for a start.

          • Bryce I clearly said a high bridge, and you say you oppose change, really, do you have reasons?

          • Bryce P

            Not directed at you Patrick. 🙂 Greg N mentioned a lower bridge.

          • TheBigWheel

            Worth a post on this subject I think? With images of iconic bridges from around the world.

            Whether the announcement later this month includes anything about the AWHC, I don’t believe we’ll get a road tunnel.. it makes no sense and would cost too much (in absolute terms but in opportunity cost terms especially).

          • Greg N

            I said “…if it was a low height bridge, but presumably it could be designed to cater for the needs of most pleasure yachts.”

            Which implies that yachts [which includes sailing boats] can still sail under it Bryce.
            We don’t the massive 50+ metre height bridge span we have now for the Harbour Bridge I’m sure a 15-25m high span will be enough for most boats using Westhaven now.

            In any case even if it wasn’t, and harking back to the Golf saga earlier, and drawing a string from that, why should a few thousand boat owners in Auckland dictate to the rest of Auckland how high a rail only bridge would have to be?

            The really big sailing boats can use the existing basin via Te Wero bridge, and while some might sail all the way up to near Whenuapai, the boat building industry there is in wind down mode as evidenced by their lack of desire to utilise the land at the Hobson Air base that was reserved for them which they have all flatly refused to take up.

            I’d prefer a tunnel too, but I’m asking for what such a bridge only design would cost, because to my mind that should be the base case for the rail tunnel, not a bag on the side of some $6B road tunnel project.

          • Bryce P

            Rail tunnels would most likely be cheaper than a bridge, be easier to get consent (there are already height restrictions over Wynyard) and yes, effectively cut of a significant part of the Waitemata Harbour to larger yachts. The gap under the existing harbour bridge isn’t as great as most people imagine when you start talking catamarans and large mono hull craft. Yes, those boat owners pay rates too. Usually quite a decent sum. As well as marina charges.

          • Bryce P

            Patrick, I oppose silly change. The harbour is a very important part of Auckland. They are a key part of the geographical advantage that Auckland has. As with the POA issue, making the harbour smaller, as a lower bridge would likely do for a significant number of vessels, is an issue to those who do use the harbour.

          • SDW

            If tunnels are a viable option, I dont think there is a chance of getting consent for new bridges over the middle Waitemata under the RMA regulatory framework.

        • There will never be a commercial port at Te Atatu as the existing bridge was planned for. Is the sugar refinery still going?

          As a rule bridges are cheaper than tunnels.

          Personally I find bridges aesthetically preferable, when well designed. Tunnels have the aethetics of absence. That is not similar to being pleasing.

  • Alan J

    Agree, those are almost certainly hourly costs not daily.

  • Our transport models must be full of lots of these twisted assumptions as that would explain their consistently poor for record over many years at predicting uptake of new amenity. And as they consistently predict more driving and lower PT use these inaccurate assumptions all or mostly lean in one direction. It is time more daylight is shone on the inner workings of transport modelling.

    Additionally it must be assumed that there will be road pricing introduced in some form in the medium term. The introduction of EVs alone makes this inevitable [as they pay no fuel tax]. But also we know the Council wants to substitute or at least augment this more precise system for funding transport rather than rely on rates. Road pricing will influence driving uptake and behaviour; that’s the main point of it!

  • Sam Prescott

    My question is how can we pressure Government to change the assumptions for this error made 10 years ago?

  • Warren S

    If John Key announces an acceleration of the AWAC project at the same time as an earlier start for the CRL on 27 January then all I can say is ‘ God help us’.
    The lack of clarity of thinking in what outcome is desirable for a quality city in which to live, with all this gobbledegook modelling and its outdated assumptions is beyond belief. And John Key and Minister Bridges are no longer deserving of our trust in their ability to make rational decisions.

  • Evan James

    The fact is, that Auckland is changing in ways that most of the planners had never dreamed it would. The models they had based their plans on have well and truly gone out the window as a new breed of inner city residents has emerged, and large companies are coming back into the cbd with new headquarter buildings. This has resulted in a change of dynamics for the cbd that even the most left-field thinker would have struggled to come up with. So let’s not be too hasty pore scorn on politicians who did not foresee it happening too. After all, they are only as good as their advisers, and they, by and large, don’t change when the government changes.

    • Greg N

      The planners and modellers have known for decades that their models are simply not up to snuff, both the planners at all the councils making up AC and NZTA and its predecessors.

      They have consistently refused to accept the new normal that is lower VKT per-capita in Auckland and therefore treat the flattening out since 2004 as “a blip” still, and they’re expecting driving stats to resume the ever skyward climb.
      But we’re 12+ years past that change and the planners still don’t understand the future is not the same as it was.

      But those planners and modellers are not elected officials, and we rely on the elected officials like Ministers and local body Politicians to ask the hard questions for us.
      Its not unfair to expect them to do so, its what they are elected to do.

  • Warren S

    It seems to me that Auckland Transport are more cognizant of the statistical trends that have been emerging for the last 20 years than NZTA whose attitude, mandate and financial responsibility as a “cash cow” organisation I find appalling.
    A major reform is needed both at political level and within NZTA itself. This must be inclusive of a shift in emphasis from motor vehicles only to other modes of transport and in the case of Auckland a solid move away from ever widening motorways to real investment in metro rail.

  • Evan James

    Problem with the NZTA is that it must think about the rest of the country. Like it or not, but Auckland is just a small blip on the map of New Zealand, and in the eyes of many sucks the life out of the country and gives very little back in return. As has been pointed out in other correspondence on this website, most of the rest of the country is little more than grown-up country towns, with needs much different than Auckland – such as the emphasis on roading as opposed to public transport. Basically, the questions being pondered by the NZTA are along the lines of – how can spending money on public transport in Auckland improve the transit times of milk from the farm gate, to the dairy factory, and then to the export ports at Tauranga, Napier or Timaru, or logs from the forests of Northland to the export port of Marsden Point.

    • Greg N

      Auckland represents about 33% of the population and more than that of the countries GDP, therefore, its not a little blip no matter how you or anyone else perceives it.
      On a economic basis Auckland is fully entitled to receive 33% of the NZTA spending on a “per-capita” basis, and historically it has had nowhere like that until recent times.
      Which means for a very long time, Auckland has been propping up the rest of the country economically – and not getting a fair share of the spending in return.

      As for getting stuff from the farm gate to the ports it is generally:

      (a) hardly time critical so doesn’t need a motorway to do so and it is generally commodity goods like unprocessed logs or milk powder (the lowest rung on the dairy exports ladder in terms of value add). Neither of which are going to “go off” or lose value if delayed by a few hours from reaching the next container ship.
      and
      (b) is economically no different to the country from Aucklanders in service export businesses who export their “goods” from Auckland to the rest of the world by a fibre cable.
      Except that exports from service industries, many based in Auckland or other city metro centres like Wellington and Christchurch, tends to be of much higher value add when calculated per-capita and in absolute terms than just about any farm product you can care to name.

      As for NZTA’s priorities and your postulations of them, all of that might hold water, if, and only if, thats what they actually did.

      Instead the money that could be used for those “worthy” country road projects making that tanker of milk get to the Fonterra dairy plant 30 seconds sooner wasn’t being wasted on building massive and expensive RoNS with no solid economic foundation to justify them except a couple of Ministers beliefs, that RoNS, like cans of Fresh Up, “must be good for us”.

      So much so, that it was little over 18 months ago that Fed Farmers and the LGNZ (the body that represents all Local Governments in NZ) was warning the Government that the ongoing and continued starvation of the road maintenance budget by the RoNS and other wasteful projects was seeing the countries existing roads literally falling apart from all those tanker trucks thundering past, as they could not afford the money needed to maintain them.
      Because all that maintenance cash was spent elsewhere by NZTA.

      Since then the Government has forward spent even more gobs of NZTA future road cash on accelerating even more RoNS and other dubious benefit projects.
      Meaning that the problem will not be fixed easily by a change of Government (or change to the “statement of direction” by NZTA).

  • Evan James

    We may make up 33% of the population, but if you look at the NZTA’s board, it is evenly divided among the regions, with two from Auckland (Nick Rogers and Adrienne Young-Cooper), two from Wellington (Chris Moller {ex Fonterra}, and Dame Patsy Reddy), and two from Christchurch (Gil Cox and Mark Oldfield).
    The organisation is currently headed by the General Manager of Planning and Investment Dave Brash until Fergus Gammie takes over in March, and the other General Managers are Jenny Chetwynd, Communications and Performance; Celia Patrick, Access and Use; Allan Frost, Organisational Support; Tommy Parker, Highways and Network Operation; and Sara Broadhurst, People and Capability. There are also four Regional Directors: Ernest Zollner (Auckland and Northand), Harry Wilson (Waikato/Bay of Plenty), Raewyn Bleakley (Central), and Jim Harland (Southern).
    So no matter what we may think we deserve in Auckland, we have to stand in line along with the rest of the country. And don’t forget, one of those RoNS has been justified on the basis that it is required for Aucklanders moving out of town for their holidays.

  • Warren S

    No Evan. The Puhoi to Wellsford (duplicate road) motorway was justified by Government MP’s as being essential to the development of Northland but of course, it doesn’t go anywhere near Northland.
    In addition, as I understand it, 4 out of every 5 vehicles turn off at Warkworth in the direction of Matakana with only 1 in 5 proceeding to points further north.
    Furthermore, apart from about five days per year the Orewa to Puhoi section is under utilized and hasn’t reached its NZTA projections hence the recent increase in toll charges.

  • Early Commuter

    Hi guys

    Imagine you work a 4am-12pm shift

    How exactly is public transport going to work for you?

    Sometimes you forget we don’t have a 24hr PT system, nor a decent PT system before 8am, and as such, parking is still essential for a lot of us.

    • No one ever said it was going to work for everyone, or that all parking in Auckland is removed. Even if there is no PT at all, parking should still pay its way. Even if you consider parking a fundamental requirement to civil life it should still pay its way, like water, electricity etc.

      • Early Commuter

        So.. someone who works 9-5 has the ability to use a fantastic PT system at low cost and high frequency
        Someone who works 4-12 has to drive in and pay extortionate parking rates
        Even though the second person contributes nothing to congestion

        Seems unfair.

        • harrymc56

          Life is not always fair.
          Like anything PT cannot be all things to all people.

        • Peter Nunns

          PT services don’t run at equal frequencies at all hours. However, this doesn’t imply a case to subsidise parking or require it to be supplied for free. In fact, doing so would have negative unintended consequences. A regulated oversupply of parking would indeed make parking cheaper at 4am, but it would also make it cheaper at 8am, encouraging more people to drive at that time and thus worsening congestion and PT farebox recovery.

          Moreover, I would argue that parking and labour markets will tend to give early commuters decent options in the absence of MPRs. For example:
          * Time-of-use parking pricing will tend to result in higher prices during periods of high demand – 8am to 12pm for your hypothetical shift-worker – and lower prices when there is lots of parking capacity. The latter effect will tend to offset the former, at least to an extent.
          * People facing higher parking prices and no alternative commuting choices can negotiate with their employer for more pay, flexible hours, telecommuting arrangements, etc. This seems like a useful step to take prior to calling for onerous, market-distorting regulations.

          • Early Commuter

            Hi Peter,
            Either you’re naive or wilfully ignorant to suggest that people can “negotiate with their employer” as you say. People working 4-12 or similar hours are usually already at the bottom of the pile i.e. cleaners and definitely don’t have the bargaining power that the bourgeoisie working 9-5 have.

            Why not bring in REAL earlybird parking: in before 0630, $10 daily parking, after 0530, $25 daily

        • nonsense

          so should we all have worse PT or should you go talk with your boss and ask for an early start allowance?

          • Early Commuter

            Maybe we should get away from an unethical public transport model that incentivises leisure and wasteful activities and harms productive work

  • Mr Plod

    I hear that tourism is now our largest ‘export’ earner and given the locations of our attractions and transport hubs it relies heavily on bus friendly roads and towns to move the masses. Accidents like the recent one in Arthur’s Pass will put pressure on NZTA to consider this industry’s roading needs as much as those of dairy & forestry.

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