How Much is Saint Paul Leaving on the Table with its Backward Downtown Parking Policy?

lowertown-parking-guysI was in Lowertown the other day minding my own business when I saw a sign of the times. A pair of men were parking their SUV in the late afternoon on a street next to the Union Depot.

“75 cents? Sure beats the f**k out of $10 bucks at the old place!” he said to his friend, before loping his way up the sidewalk in the direction of the new Saints ballpark.

It was around 4:30, and I’m going to guess that the SUV sat there until at least the end of the game, sometime around 10 pm. (Granted, they probably went to dinner and tailgating first…)

For those of you scoring at home, that comes down to 13¢ an hour for parking, and to me the mismatch between how we price and value space in downtown Saint Paul couldn’t be more stark. Though there has been lots of talk over the years about re-thinking how Saint Paul manages parking downtown, including a recently completed (and thorough) downtown parking study, nothing’s changing.

One thing that nobody seems to have an answer for, however, is what is being lost. What’s the opportunity cost of doing nothing? How much do people value parking on the street in the heart of Lowertown? How much money is Saint Paul leaving on the table every day? 

Given how many people are coming downtown these days, I would think that there would be more urgency around this issue.

Existing parking revenue vs. on-street demand

Figuring out the answer is difficult, but I’m surprised that the parking consultants didn’t provide clearer estimates (at least, not on the record).

So I asked the city for information about their parking revenue, and I received this basic data regarding the city’s meter revenues for the last few years:

stp-parking-revenues

[Note: this revenue is city-wide, but given the lack of actually-used meters elsewhere in the city, I’m assuming that the vast majority of this revenue comes from downtown meters.]

In 2012, the city raised rates in some areas and extended hours from 4:30 to 5:00 pm (IIRC) which (along with more concerts and hockey games) is one big reason that revenue has gone up. The problem is that ending enforcement at 5:00 pm means that the most valuable parking spaces in the city are often “turning over” very few times while generating zero (0) dollars for city coffers.

A big part of the city’s recent parking study was an analysis of existing parking usage (the best data we have to date), and the results are not good if you’re someone interested in the efficient use of public resources. Here’s the punchline:

Parking activity on the weekend peaks in the evening when visitors travel downtown for Saint Paul’s nightlife. However, even during this peak, parking utilization only reaches 33%, leaving nearly 17,000 empty spaces in the study area. Parking activity is the lowest in the mid-day, when parking is only 20% full. It is important to note that these are aggregate numbers over the entire study area; demand varies from block to block.

Here’s what that looks like in chart form:

STP-on-street-parking-demand

In other words, there are many expensive-to-construct parking ramps (on valuable land) that nobody is using, but everyone is upset anyway.

Some rough meter math

OK, let’s dive into the numbers.* If existing parking demand during enforcement hours (about 700 spaces are used on average) generates about $2,000,000 dollars per year, that’s roughly $2,800 / meter / year.

The existing enforcement time (8 hours) is larger than the potential evening enforcement time of 5:00 to 10:00 (5 hours), and so if you simply assume that existing usage rates would equal daytime rates, extending meter enforcement an additional 5 hours into the evening would generate an additional $1.3 million for the city and/or neighborhoods (i.e., $2.2M X 1.6 total hours  = $3.52M).

That’s the absolute minimum I believe is being left on the table, which (for the record) would cover about half of the 2015 city-wide tax increase.

minneapolis-parking-revenues

Compare to Minneapolis’ $8.5M / year; blue = gross revenues, yellow = costs, red = net revenues. Graph from the Star Tribune.

 

Kinks with the assumptions

shoup-chart-parking-prices-occupancy

A Shoup chart showing a ‘peak socially optimal’ vs. ‘peak revenue’ supply–demand curve for meter pricing.

The big kink with these assumptions is the unassailable fact that parking is a market (albeit an imperfect one).

Simplistic (what I’m going to call) “non-liquid” parking meter economic assumptions are foolish because someone driving a car looking for parking is a highly mobile customer with a great deal of “choice” (if somewhat lacking in information). In other words, if you remove a meter, the money doesn’t “go away”, it moves around (e.g., this previous debunkment). And as Donald Shoup explains in his parking tome, people paying for parking is a thing both complex and irrational.

For example, in describing “cruising for parking” (Shoup’s nemesis), here are some of the variables he lists:

p   price of curb parking ($/hour)

m  price of off-street parking ($/hour)

t   parking duration (hours)

c   time spent searching for parking at the curb (hours)

f   fuel cost of cruising ($/hour)

n  number of people in the car (persons)

v   value of time spent cruising ($/hour/person)

Presto, the “break even point … where the cost of cruising equals the savings from parking at the curb” becomes:

c*(f + nv) = t(m – p)

Solving for c* we find that…

engineer explaining thingsWho cares. The point is that people are flippin’ nuts when they’re looking for parking. “Costanza cruising” is a textbook case of people’s individual desires collectively making the world a far worse place.

It boils down to to this: many people are willing to pay a non-trivial sum to park next to their destinations, while others prefer to save money and walk farther.

But Saint Paul’s parking pricing should reflect this! If you walk around the Xcel center on a game or concert night, you can find all kinds of lots charging $10 or more for parking. (Note: many of those existing surface parking lots occupy theoretically valuable downtown land.) Meanwhile, valuable on-street meters are being basically given away.

The other big variable is the off-street ramps, many of which are city owned, and most of which are mostly empty most of the time. In theory, if Saint Paul’s downtown parking were better managed, those lots would be far more full, and generating money for the city instead of sitting there empty.

If the city charged more for precious on-street parking, while encouraging more turnover, it would generate far more revenue that my current estimate. (For example, downtown Minneapolis charges higher rates near stadiums during game days.) Such a system might also increase usage of existing off-street lots (which could be priced to be more competitive), which would improve the maintenance-to-revenue ratios of these long-term investments.

I’d say that $1.5M is the low end, and the high end of how much Saint Paul is leaving behind in lost revenue is much higher (maybe double).

STP-on-street-parking-demand-CIRCLE

The circled numbers represent a huge wasted investment.

Crap analysis, still correct

dr evil

Probably enough to buy a giant laser.

I’m no economist. Even though I have a PhD in urban geography, I suck at math. But I can tell you that every time someone pays 13¢ an hour to park on the street for an evening in downtown Saint Paul, the city loses a lot of potential money.

How much? Between $1.5 and $3 million dollars. With all the development downtown, that number is only going to go up.

Granted, parking policy shouldn’t be just about raising money for the city, though that should be a big piece of the discussion (especially when most CHS Field and Xcel Center visitors are coming from outside of city borders). But it should be part of the picture, and we should have a clear picture of the tradeoffs.

In theory, pricing parking more effectively would make parking more convenient for the vast majority of (non-placard abusing) people driving downtown. It would reduce traffic congestion by eliminating the frustrating experience of “cruising.” It would provide better incentives for using existing expensive lots, while incentivizing redevelopment of existing surface lots (currently making a killing by charging $10-$20 for events).

Meanwhile, 100+ days a year, people driving downtown for the Saints or Wild games are parking for free, generating traffic, and pissing everyone off by making it difficult to park.

How long will this go on before Saint Paul decision makers decide to get their money’s worth?

stp-event-parking

$20 surface parking lots by the Wild and Saints stadiums.

* For those who would like a more exacting study, allow me to point out that professionals get paid for such things. With volunteer bloggers, you get what you pay for.

** For more of my thoughts on parking in Downtown Saint Paul, see:

Embracing Change at the Saint Paul Farmers Market

The One Where I Pick on the Disabled

Don’t be Misled by Parking Space Economics (a propos)

Minneapolis and Saint Paul Need Parking Benefit Districts

Lowertown’s Parking Problem is Lowertown’s Walking Opportunity

Blank Walls of Saint Paul #1

Rough Sketch of a Solution to Downtown Saint Paul’s Parking Problem

What Could be More Historic than Street Life?

What Kind of Parking Policy is Good for Downtown St. Paul?

(Can you believe I’ve wasted this much time on this issue?)

 


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9 Responses to How Much is Saint Paul Leaving on the Table with its Backward Downtown Parking Policy?

  1. Matt Steele
    Matt Steele July 7, 2015 at 5:18 pm #

    The purpose of a price for a parking space should not primarily be to generate revenue, but to allocate scarce resources. it’s easy to set prices based on this principle, ensuring optimal parking availability (80% occupancy, usually), and then it’s non-political. Parking *should* cost more in Downtown Minneapolis, if people would be willing to pay more to park in Downtown Minneapolis.

    • Joseph Totten
      Joseph Totten July 8, 2015 at 12:10 am #

      In fact, if we included sales taxes, a low price is probably best, it would ensure the most people coming through and buying things. But if it’s free then instead of turnover and sales taxes, we get… one person a free (or nominally cheap) parking space.

      I’ve said it before, let’s start going by 25 cents per hour increments after 5:00 PM, heck let’s go only until 9:00 and see if expanding makes more sense when we started!

  2. Nick Magrino
    Nick Magrino July 7, 2015 at 7:11 pm #

    Are you really a parking meter?

  3. Bill Lindeke
    Bill Lindeke July 8, 2015 at 6:52 am #

    Well, that’s long been the rationale. The 2 million dollar question is whether it’s working. All I hear from people are complaints about the status quo. And then I see things like sports fans parking for free in front of a restaurant or shop (what few of those there are), and I wonder about whether your narrative holds up.

    Certainly It’s not about greed, but in an era when Saint Paul is struggling to fund libraries and nobody in the city wants to raise property taxes any higher than they already are, we should really be asking whether our $2M subsidy is actually helping downtown businesses, or just making it slightly easier for people to spend hundreds of dollars at hockey games.

  4. Tommyrey July 8, 2015 at 7:36 am #

    Keep in mind that there are only 50 Saints home games a year but your proposal would raise parking meters rates 365 days a year. There are many nights when Lowertown businesses need customers and the free parking after 5 pm helps draw them downtown. Maybe there should be flexible meters that raise rates during times of events. The Lowertown ramp is normally $4.00 in the evenings but on event nights they raise it to $5.00.

    • Bill Lindeke
      Bill Lindeke July 8, 2015 at 8:01 am #

      Sounds reasonable. I’m not proposing any specific amounts, just some principles.

      the key one: if on-street parking is full up and highly in-demand, it should cost more than empty off-street parking.

      that’s a big “if” I suppose, but Lowertown isn’t going to stay a vacuum. the opposite is true. it’s going to become fuller and fuller and fuller and fuller…

  5. Wayne July 8, 2015 at 8:36 am #

    I don’t think on-street parking spaces even cover their own costs when you factor in things like opportunity cost of the space and maintaining the surface.

  6. Nigel Parry July 10, 2015 at 1:53 pm #

    You’re arguing to make it even more difficult for the poor who live down. The second you use increased costs to control anything, only the rich benefit. Part of what makes Lowertown special is the people that live here. Over the last decade, I’ve watched half of the people who made this neighborhood what it is leave. Eventually you’ll achieve the soulless yuppie enclave you’re arguing for. Good job, Bill, good job.

    • Matt Steele July 10, 2015 at 2:00 pm #

      “The second you use increased costs to control anything, only the rich benefit.”

      Exactly, which is why a land use that necessitates car ownership despite ability or willingness to pay that high expense, disproportionately hurts the poor. Which is why we need a human-first land use rather than a car-first land use. The status quo kills cities and makes people poor.

      Lowertown largely survived the dark times of Modern American Motordom largely in tact, which is why it is already affordable for people who cannot pay for cars (including car storage).

      Though as Lowertown becomes more appealing to the increasing hoards of people who want human-first land use by choice, prices go up. The obvious answer is to get rid of barriers to creating and restoring additional human-first land use. Turning car storage space into actual human habitat helps accomplish that.