Thursday, June 19, 2014

Parkonomics Dahntahn

Looks like the Pittsburgh Parking Authority is going with the flow and raising rates at its Downtown garages by some more than trivial percentages. Not a new trend. And I am sure that if anyone wanted to plot out the rates over time at the private garages Downtown, the trend would look much the same.  PG: Pittsburgh Parking Authority approves big fee increases

How can they get away with raising rates so much?  Supply? Rather fixed at best. Demand?  Must be doing pretty well. Anyone want to make the connection between ever higher parking rates Downtown and the Port Authority route cuts over the years?  Efficient for the Port Authority for sure, they got rid of many of their long squiggly lines.  But did those lost riders make it onto other bus routes?   Actually I am sure the Parking Authority could raise rates even more and match the private sector rates if they wanted to.

What will the future hold?  Another new skyscraper racing toward completion might add just a few jobs Downtown and I bet a few of those workers will want to drive to work and need to park somewhere.  What happens when the Lower Hill Development ever gets going in one form or another?  All those temporary parking lots are going to be taken out of the mix for sure. And on the North Side, eventually some of those parking lots are going to be developed into something that takes out a few more spots.  And unless we are about to resort to landfill to expand the Mon Wharf parking, there are few options for new parking options in any close proximity to Downtown.

So it is hard to see the situation getting better anytime soon. We may not have Manhattan parking prices yet, but who knows what the future holds.  I wish I had time to build a CGE model of this, but I'd love to estimate the elasticity between the cost to subsidize the $ losses to operate one of those suburban bus routes that were cut with the incremental parking rates all 40K parkers have to pay.

Well, on the bright side... Higher revenues for the PPA will give them the money needed to pay that pension asset.  That and the higher rates will be taxed by the city, itself bringing in additional revenue. What does the Act 47 project for parking tax revenues into the future?  


Anonymous BrianTH said...

Of course there is plenty of room for parking structures in the Strip, Lower Hill, North Shore, and Station Square, which could more than replace losses of surface parking as those lots get developed.

But there is also a decent chance driverless cars will moot all this sooner than many think, so I don't think we should get too far out ahead of present demand with new structures, and it might be a good idea to design new structures to be convertible.

Saturday, June 21, 2014 2:28:00 PM  

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