Building more parking at major employment centers: Can full-cost recovery parking charges fund TDM programs?

https://doi.org/10.1016/j.cstp.2016.10.002Get rights and content

Highlights

  • Evaluates the full costs that surface parking pose to large urban institutions.

  • Uses a sophisticated pro-forma approach to estimate and illustrate parking construction costs.

  • Finds that costs can range from $45-75,000 per space and are subject escalation and price increases.

  • Offers scenarios showing how TDM programs can provide an alternative to constructing new parking.

  • Illustrates how TDM programs can defer expenses for large employers as opposed to constructing new parking.

Abstract

In dense urban areas, surface parking often poses an opportunity cost, and reuse of the land for urban development with parking relocated to a multi-story structure may be an attractive option. This paper analyzes the cost of replacing surface parking with a parking structure and finds that it may be equally cost effective to pursue travel demand management strategies. The paper analyzes what it costs to build a parking space in a multi-story structure (garage) using US average data as well as data from the case of a typical large US employer, the University of California, Berkeley. The Berkeley case illustrates how replacement of surface parking with structures can substantially escalate costs and necessitate price increases for everyone, unless costs can be offset through more efficient utilization rates (e.g., renting out employee parking for evening and weekend use) or the parking system is credited for the land value of former surface parking (not likely in the situation considered here). A transportation demand management (TDM) program offering incentives for other modes of commuting can reduce the need for new parking, and its annual costs are likely to be lower than the amounts needed to cover new parking construction. Parkers could be better off paying for TDM programs to reduce parking demand rather than paying to build new parking structures. The findings are case specific but are likely to resonate with many employers and institutions that provide parking in high-cost urban areas.

Introduction

In the United States, driving remains the principal means of travel to work, 91% of American commuters use personal vehicles according to the Bureau of Transportation Statistics (Bureau of Transportation Statistics, 2014), and this modal preference is both supported by and reflected in public and private parking policy. In many locations parking is made available in plentiful quantities and provided free or at a subsidy to the user (Shoup, 2005a, Shoup, 1997). Even in downtowns, parking is often priced at fairly low rates; in a survey of 107 cities, parking prices averaged $1 for every two hours for on-street parking and $11 per day for parking in commuter lots (Auchincloss et al., 2015). In addition, most American workers don’t pay for their own parking. This is consistent with older nationwide surveys which found that over 84 million parking spaces are provided for free each day to an estimated 95% of all commuters (Pickrell and Shoup, 1980, Shoup and Pickrell, 1980, Shoup and Breinholt, 1997, Shoup and Willson, 1992).

Nevertheless, a number of cities and some employers have shown increasing interest in more rigorous parking management and pricing that better reflects costs. Several cities have been experimenting with parking pricing reforms carried out as federally funded demonstration projects (Federal Highway Administration, 2015, SFPark, 2014); many others have undertaken purely local efforts to deal with the high costs of parking and the auto use it supports (Guo, 2013b, Kolozsvari and Shoup, 2003).

University campuses are among the employers that have been increasingly focusing on parking issues (Balsas, 2003, Barata et al., 2011). This interest is often based on cost control, specifically a desire to balance the costs of parking construction, operation and maintenance against a perceived need to provide parking to employees (and students, clients, and visitors) as a benefit and a business necessity. In some cases, university campuses are rethinking their parking policies because they have an interest in using surface parking lots as building sites, an activity of great relevance in urban centers facing increased development pressure and land scarcity (McCahill et al., 2014). But removal of surface parking is a step that requires either parking replacement, often in higher-cost structures, or demand reduction. The latter option, demand management, has been the subject of some research, but has proven to be difficult to implement (Riggs, 2014, Riggs, 2015, Riggs and Kuo, 2014). Parking pricing has been found to be an important element of demand management, but it is not always readily accepted by employees, some of whom view affordable (inexpensive) parking as indispensable (Shoup, 2005a).

This paper presents an analysis of parking costs versus price in these circumstances, i.e., where to free up land for other uses, surface parking must be replaced by costlier structured parking unless demand reductions can be achieved. The paper begins with a brief review of the literature relevant to the study. It then presents an example analysis of what it costs to build a parking space in a commercial structure (garage) using US average data and a range of urban land prices. A case study of the University of California, Berkeley’s parking dilemmas is then presented and used to illustrate how replacement of surface parking with structures can substantially escalate costs, but may also open up opportunities to consider demand management alternatives. The final section discusses implications and recommendations for parking providers who may find themselves in similar situations.

Section snippets

Literature review

Researchers have been studying the effect of parking on urban transportation and travel behavior since the problems of car usage started to be researched in the 1950′s. William Vickrey’s work on dynamic pricing for on-street parking (Vickrey, 1954) initiated a discussion on the relationship between parking cost and its price. This has extended to more recent work in pricing and the potential for reform (Willson, 2013). Recent parking pricing reforms, carried out as federally funded

Cost per parking space using united states’ 30-city median cost data: a costing methodology

This inquiry begins by reviewing the cost of providing a parking space in a parking garage. The analysis accounts for the costs of land as well as for construction costs, “soft costs” including design services and environmental review, and recurring operations and maintenance costs for a 30 to 40 year period. It assumes that the parking provider must cover costs at minimum; some providers would expect to turn a profit as well. The method used involves setting up a simplified pro-forma to compute

Case study: UC Berkeley

Both public and private parking providers may find themselves facing a situation where replacement of surface parking must be considered. Universities, which often are major employers, are one such parking provider. The case of the University of California, Berkeley is used to illustrate how parking cost and price debates can play out; a case we argue that is not unique to the campus environment and may have more widespread application.

UC Berkeley is an urban campus with almost 36,000 students

Policy recommendations

Both the national average analysis and the UC Berkeley case show the high cost of replacing surface parking with parking structures. Berkeley is located in a high-cost metropolitan region and its costs are well above the national average, making it quite urgent to find a way forward. However, there are many other cities in the US and around the world with similar land and parking costs in their CBDs or in the employment centers of the high demand, fast growing suburbs. Such urban universities

Acknowledgments

This paper was completed with support in part by a value pricing grant from Federal Highway Administration (FHWA) to the City of Berkeley and the UC Berkeley campus. The authors would like to thank Seamus Wilmot for sharing campus parking data and graduate/undergraduate students who helped with the research. However, the opinions expressed in this paper are those of the authors only.

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