In case you didn’t catch the August 14 edition of the New York Times, it includes an economic evaluation on parking which might bring a different perspective on our perennial debate on Town Center parking. In “Free Parking Comes at a Price,” Tyler Cowen, a professor of economics at George Mason University, suggests that while many people see a free parking space as an entitlement, it’s actually a subsidy that wastes space and money:
Many suburbanites take free parking for granted, whether it’s in the lot of a big-box store or at home in the driveway. Yet the presence of so many parking spaces is an artifact of regulation and serves as a powerful subsidy to cars and car trips. Legally mandated parking lowers the market price of parking spaces, often to zero. Zoning and development restrictions often require a large number of parking spaces attached to a store or a smaller number of spaces attached to a house or apartment block.
If developers were allowed to face directly the high land costs of providing so much parking, the number of spaces would be a result of a careful economic calculation rather than a matter of satisfying a legal requirement. Parking would be scarcer, and more likely to have a price — or a higher one than it does now — and people would be more careful about when and where they drove.
He goes on to note that a parking space may cost more than the vehicle that’s parked in it, especially when you consider a car’s rapid depreciation. So I decided to do some quick calculations based on our situation for the three city parking garages in the Town Center based on the City’s FY2011 budget:
- Annual cost of the mortgage (30 year bond of $36 million): $2.2 million
- Annual maintenance and operations: $2.2 million
- Total annual costs: $4.4 million
- Number of parking spaces: 970 public parking spaces (plus 1,000 private spaces)
- Annual cost per public parking space: $4,536 ($4.4 million/970 spaces)
Hmm. That’s much less than the cost of the average car but it does tell us how much a parking space needs to “earn its keep”.
Next year, each space is expected to earn $1,144 from parking meters, $680 from fines, and $168 from “parking district” taxes (the balance comes from the city). The businesses in and surrounding the Town Square are in a Parking District and pay an additional property tax to help pay for the costs of the three parking garages, including construction and maintenance, parking meters, and events. Here’s the explanation from page 3-16 in the City’s 2011 budget:
In order to manage the operational costs and debt service of the three public garages within Town Center, the Town Center Parking District was formed. The Parking District is a special taxing district that levies a real property tax against the commercial properties within the Town Square boundaries. The Parking District Tax rate for FY 2011 will increase by 10 percent to $0.33 per $100 of assessed value in addition to the $0.292 rate on all real property within the City. This tax will provide a contribution of approximately $163,000 towards funding the District.
While this tax is expected to bring $163,000 next year, the annual cost of the garages (paying both the mortgage and maintenance) is $4.4 million–so the difference has to be raised from a variety of sources, including parking meters ($1.1 million), parking fines ($660,000), and contributions from the city ($1 million) and the county ($295,000) [which will probably disappear given the county’s precarious financial condition].
Many people (both residents and businesses) have clamored for free parking in downtown Rockville, but the cost to the community will be $2.2-3.2 million annually or $41-60 for every resident (man, woman, and child) in Rockville. Is it worth it? Does this subsidy waste time and space? Or is it essential to maintain our quality of life and businesses in downtown? Should we rethink the minimum parking required by the zoning code? Should some businesses or agencies be exempt from parking requirements and parking district taxes (the district courthouse under construction only has ten parking spaces for the ten judges and will pay no taxes)?