Wednesday, March 07, 2007

So you think parking is expensive now?

Has anyone come up with an estimated impact on parking prices Downtown if the Port Authority goes through with their proposed cuts? Has anyone even asked the question?

Lets try this. To be clear, this isn't an in-depth analysis.. I'd call it a back of the envelope estimate. The current plan is to cut 60% of PAT routes. Supposedly that will translate into a ridership loss of around 10%. Those are their projections fwiw. That seems a little low, but since they are cutting the less-used routes it's possible. I would put good money that they are undercounting secondary ridership losses. Even people whose routes are not being eliminated will see greater crowding. As a result some additional people are going to shift away from using public transit, if not in the short run then eventually. So lets just say it's a 10-15% ridership loss.

Right now I would peg the number of people who commute for work into Downtown on public transit at just over 30K people/day. Taking just 10-15% of that translates into 3-5K new commuters who are most likely going to be driving to work. At 1 person per car it's 3-5K more cars seeking parking close to town. Some may carpool, but these new drivers will not be part of established commuting patterns... so it may be hard to find a partner to drive with. If it were 2 persons/car you get 1.5-2.5K more cars driving into town. Carpooling with 3 or more people per car is so rare here that it's not worth accounting for.

Is that a lot? How many parking spaces are downtown? Let's say there are 25K core downtown parking spaces. So an increase of 1.5-5K cars may not seem unmanageable, but it translates into a 6-20% jump. That is pretty significant even at the low end. Consider that parking utilization in core lots Downtown is already near capacity. Parking supply is pretty fixed in the short run, i.e. no new parking spaces about to come online to absorb the new drivers. Even in the longer run, space downtown is at a premium. Econ 101 tells you that if supply is inelastic, consumers will wind up paying a higher price if demand increases.

I have no precise amount that will translate to in terms of increased parking rates, but does anyone want to bet that parking rates will not go up after the PAT routes are cut. For PR reasons it may not be immediately after the routes are cut, but not too long in the future. How much? Just a SWAG but what if daily rates to up $1/day. That applies to everyone so it means an aggregate $25K/day collected by parking operators. Over the course of a year say $6-9 million/year from consumers. No reason to think that $1 increase could not become a $2 increase in short order. And that is all just Downtown, it could be more if you look at other areas within the city and region. What about all this new residential housing downtown, do people really think all these new, and fairly affluent, condo dwellers are not going to have any cars whatsoever. What about the casino which is going to have a big impact on parking and traffic flows in and around Downtown. The silver lining? Maybe the city budget can be balanced with this. With the parking tax being what it is, the windfall will go to both the lot owners, but also to the city which takes its cut off the gross revenues.

Maybe they will have to bring back this old advertisement.. Of course, most drivers who want to switch to the bus won't have that option anymore. The proposed routes are concentrated in the areas where ridership is already pretty high.. if not near saturation.. Any Every route into areas where commuting is mixed between auto and public transit will be cut; efficiency in the eyes of the Port Authority for sure... just not to anyone else. They can also save on their future advertising budget since what would be the point.

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