New parking model in downtown Calgary would reduce prices

| May 24, 2013 | 1 Comment

New parking model in downtown Calgary would make parking spots more available

New parking model in downtown Calgary

The new parking model in downtown Calgary would actually reduce prices as more people seek to use less expensive parking spots a little further away from where they want to park, driving down prices.

By Marco Navarro-Génie, Frontier Centre

Calgary City Council may be close to adopting a new parking model in downtown Calgary that would make parking somewhat easier, reduce parking prices, improve traffic, and reduce tail pipe emissions.

Nearly two years ago, Frontier published a backgrounder entitled The price is right: The benefits of accurate pricing and smart technologies. The paper focused on pricing for parking spaces and the ways in which market strategies and devises such as smart phones can make parking in urban areas easier for Canadians.

The backgrounder’s author Stuart Donovan showcased the idea of supply and demand for parking spaces (accurate pricing), which has been used in San Francisco:

Accurate pricing will mean that the price of parking varies between different parts of the city and at different times of the day. This encourages the demand for parking to spread out—in much the same way that cheap airfares encourage price sensitive passengers to fly at off peak times. Accurate pricing sets the price of parking as low as possible, while ensuring that some spots are always available for those drivers that really need it.

Yesterday, it was announced that a committee of Calgary’s City Council is looking into the notion of introducing a variant of a market pricing system to Calgary’s Downtown parking.

Unfortunately some are focusing on the wrong question. A CBC report headlined the news by drawing attention to a price increase, which is surely misleading considering that the base price will go down, and that some parking spots will become more expensive while some will also become cheaper.

Sadly, Alderman Andre Chabot also seems to have missed the point, trying to instil fear that there will will be no limit to how much a parking spot can cost, displaying a lack of understanding of fundamental economic principles. One can say the same thing about a loaf of bread or a pound of tomatoes. But even though there is no legal limit to how much a merchant can charge for a pound of tomatoes (all without the benevolent intervention of protectors like Mr. Chabot), market forces of supply and demand push prices toward where they need to be for producers and merchants to profit and people can afford. It’s no different with parking spots. There is no good reason for parking pricing not to be linked to demand.

The point, as Donovan mentioned in his Frontier Centre study, is to spread the demand for parking rather than concentrate it and to charge less at non-peak hours to give people the incentive to do their business in town during that time, for example. Spreading the demand spreads the pricing too. While theoretically, the price of high-demand parking spots can go quite high it will eventually settle as more people seek to use less expensive ones a little bit further away from where they want to park.

Global got the point: “The system would reward drivers for parking in low-use areas, and encourage short-term parking in higher-use spots.”

The pricing mechanism reduces over all prices and makes parking spots more easily available. It also has a tendency to reduce the round and round chase for parking spots, which in turn reduces tail pipe emissions. Longterm, it may even improve the quality of the air in the down-town area.

The Frontier Centre commends the Council’s committee for discussing such bold and innovative initiative, and hopes that the Council adopts it and eventually finds a way to integrate the technology embedded in smart phones to perfect the parking market-driven system.

To see how smart phones will further improve the equation, please read the full report here. See also “Ending a century of parking problems.”

Marco Navarro-Génie is vice-president of research at the Frontier Centre.

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Category: Opinion

Comments (1)

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  1. King Hughes says:

    The City shouldn’t even be in the parking business other than for on street parking. Believe me, if I were mayor, I’d sell all City property and get it in private hands as soon as possible. That means everything. Then I’d lease back at current rates, saving taxpayer billions.

    The City will hold town halls in order to gain “feedback” for parking, but, in my opinion, they ignore everything that is said at those meetings and go ahead with their intended plans anyway. Typical progressives.

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