San Francisco Works to Calculate the Market Price of Parking

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Henry has a Master of Public Administration and is interested in exploring how transportation can improve the sustainability and quality of urban life.
June 14, 2013

Parking is far from glamorous, as public issues go.

It is the kind of service that is rarely appreciated when it works, only garnering attention when it fails to live up to expectations. But several cities across the United States – including Washington, D.C., San Francisco, Los Angeles, and Seattle – have begun to understand that how we use our parking resources has a profound effect on the efficiency of our transportation systems.

In an effort to improve the management of parking resources, these cities have all adopted what are known as performance-based parking pricing programs.

Performance-based parking pricing – also known as demand-based pricing, market-based pricing, or variable-rate pricing – hinges upon the idea that parking resources are best utilized when they are not too full and not too empty, and that the way to achieve this balance is by charging the right price for parking.

One of the most sophisticated examples of performance-based parking pricing is San Francisco’s SFPark, which began in 2010 and has already seen positive results. The program has two key elements. First, electronic sensors installed in parking spaces let the San Francisco Municipal Transportation Agency (SFMTA) see which spaces are occupied in real time. Then, the SFMTA adjusts prices each month based on the measured usage of the spaces using electronic parking meters that can have their prices set remotely.

Where parking occupancy is too high, the price rises, and where it is too low, the price falls. This process continues each month until a given unit of parking spaces reaches SFPark’s target occupancy of between 60 percent and 90 percent full.

These monthly adjustments have been going on since August of 2011. Since then, the share of parking areas achieving their occupancy goal has gradually risen, albeit in fits and starts, as shown in the graph. At the same time, the average price of street parking has actually fallen by 16 cents and the price of public garage parking has fallen by 43 cents.

This runs counter to opponents’ claims that SFPark is just a veiled attempt to raise revenue. In fact, revenue has remained largely flat throughout implementation of SFPark. In 2011, net revenue raised by the new meters grew by 20 percent, compared to a 7 percent fall in revenue from the older meters. The new meters also resulted in 35 percent fewer citations in 2011 than in 2012, but this loss of citation revenue was more than offset by the increase in meter revenue. However, in 2012, SFMTA expected the loss due to reduced citations to exceed the gains from more revenue.

The primary motivations behind SFPark are three-fold:

  • Improve transit efficiency. SFMTA found that a major impediment to their buses was traffic congestion and that a large part of congestion was caused by drivers “cruising” for an open curb space or double parking when one could not be found.
  • Improve cyclist and pedestrian safety. Cruising drivers have their attention split between the road and the curb, meaning they may be less aware of more vulnerable travelers like cyclists and pedestrians. By reducing cruising, SFPark aims to make the roads safer for these other users.
  • Make parking easier. SFPark is designed to benefit drivers themselves, primarily by ensuring parking does not become too crowded. The program has also created an app that allows users to find available spaces near their destination. The official SFPark app is not meant for use by drivers, but SFMTA has released a live data stream that other developers could use to deliver this information in a more driver-friendly way.

It remains to be seen whether every parking area within the SFPark pilot area is capable of achieving target occupancy. Likely there will be some areas where demand simply is not high enough, whatever the price. And because price adjustments are capped at 25 cents per month, the rate at which occupancy changes will be slow.

But San Francisco’s experience shows that with the right investment in technology, performance-based parking pricing enables a city to make better use of its parking resources while streamlining parking enforcement and meter maintenance.

For drivers, the average cost of parking has fallen, both in terms of the actual price paid and the time spent cruising for an available space. However, it remains to be seen whether SFPark will have a measureable effect on congestion.

Photo by Håkan Dahlström

{ 2 comments… read them below or add one }

avatar Jen July 3, 2013 at 11:24 AM

SFMTA stands for San Francisco Municipal Transportation Agency, not Metropolitan Transportation Administration.

avatar Henry McCaslin July 3, 2013 at 6:01 PM

Whoops! Thanks for pointing that out, Jen!

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