NCPA - National Center for Policy Analysis

A Meter So Expensive, It Creates Parking Spots

March 21, 2012

The city of San Francisco, facing traffic congestion and parking issues, has taken an innovative step in urban planning to address both problems simultaneously.  Through the creative use of flexible parking meters and numerous other inventions, the city is attempting to allow the laws of supply and demand to dictate parking in the city, says the New York Times.

  • Parking meter rates are being raised on blocks where demand is high (to a maximum of $6 per hour) and lowered where demand is low to encourage a more equal distribution of parking.
  • The city also has cut prices at many of the garages and parking lots it manages to lure cars off the street.
  • Meters will also change prices depending on the time of day, allowing for the full incorporation of demand patterns.
  • San Francisco has also made it easier to pay for parking with credit cards and began a program that allows people to find spots and pay for them on their mobile phones.

The optimal rate for parking meters on a given block is that a single space would be available at all times.  This indicator suggests that demand is almost perfectly met by supply, and this is therefore the equilibrium that San Francisco administrators are seeking to attain.

  • With the help of a federal grant, San Francisco installed parking sensors and new meters at roughly a quarter of its 26,800 metered spots to track when and where cars are parked.
  • Since the program began in the beginning of last summer, three-quarters of the blocks either hit their targets or moved closer to the goal.
  • Because the rate increases/decreases are intentionally gradual such that no meter has yet hit the peak rate of $6 per hour, even better results are expected upon full implementation.

In addition to creating a more efficient parking system, the benefits for traffic congestion in the city are twofold.

  • First, it will ease the hunt for parking spaces -- a process that it has been argued is responsible for one-third of all traffic in the city as people drive in circles.
  • Second, the city has required that revenues from the new meters will be allocated to mass transit expenditures.

Source: Michael Cooper and Jo Craven Mcginty, "A Meter So Expensive, It Creates Parking Spots," New York Times, March 15, 2012.

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