Is the Lord Mayor’s new parking charge a ‘money grab’?Posted: May 19, 2010
The Lord Mayor of Melbourne, Robert Doyle, has bought himself a heap of trouble with Council’s decision to impose a flat $4 charge for parking in the CBD from 7.30 pm to midnight (see here, here, here and here).
The new fee will apply to 3,000 on-street metered parking spaces that are currently free at night. It will raise an estimated $1.9 million in revenue to be used for general Council purposes. Council is expecting to earn a similar amount from fines associated with the new policy.
While some people think it will encourage greater use of public transport, others say it will have a severe impact on restaurants, movies and shows and is just a naked grab for money. Another criticism is that public transport is too unsafe at night and finishes too early to provide a satisfactory alternative to driving. Others vow they’ll stop visiting the CBD and go elsewhere.
I find the reaction extraordinary. In my view Council’s action is understandable – any time you have a scarce resource that is under-priced there are bound to be some perverse and inefficient outcomes. Melbourne is a 24/7 city – the streets of the CBD are frequently heavily congested at night, particularly on Friday and Saturday nights. Charging for parking at night makes sense.
The Melbourne Business Council however is concerned that people coming in to the CBD to see Fame or Sir Ian McKellen in Waiting for Godot will now have to pay for parking. VECCI is worried about the impact on restaurants, small bars and theatres. But who shells out $100 plus for tickets to a show or dinner and quibbles over $4 for parking? On the contrary, I expect patrons will feel they’re better off if it loosens up parking options a bit.
Someone’s bound to raise an equity argument here, but really, $4 is one beer in most places in the CBD and, as the Lord Mayor pointed out, considerably less than you’ll pay in a parking station. He says there are 30,000 commercially operated undercover parking spaces in the CBD costing on average $10 for night parking.
The equity argument is not very compelling in this case because the CBD is the one part of Melbourne where public transport really is an excellent alternative to the car, at least up until midnight. And as the charge only applies to the Hoddle grid, those who drive but don’t want to pay for parking can do what many do now if they miss out on a street parking space – park in the near-CBD and walk a little. Hopefully they won’t have drunk too much to drive.
There’s no reason to assume that those who are the first to get to the 10% of parking spots in the city centre that are free are significantly more deserving than those that don’t. It’s just first-in, first-served.
One of the key warrants for charging for a scarce resource is the environmental benefits. The new charge should encourage some drivers to shift to public transport (although I suspect $4 is too low to have a huge impact – its less than the cost of a return rail ticket – although extending the timetable beyond midnight would help). A larger benefit is likely to come from discouraging drivers from the perverse practice of cruising the streets searching for a parking spot.
According to Donald Shoup, a Professor at UCLA and the author of The High Cost of Free Parking, several studies have found that cruising for curb parking generates about 30 percent of the traffic in CBDs in the US. He cites a study he did of a 15 block district in Los Angeles where cruising for on-street parking created 950,000 miles of excess vehicle travel per annum, in the process consuming 47,000 gallons of petrol and producing 730 tons of carbon dioxide.
And I don’t see what the problem is with Council imposing the charge primarily to raise revenue (and let’s face it, raising revenue is much more likely to be Council’s motive than anything to do with economic efficiency or better environmental outcomes). Council has to raise revenue somehow to meet the infrastructure and cleaning costs imposed by 300,000 night time visitors and it’s as legitimate to charge for on-street parking at night as it is during the day.
If people are going to impose a social cost on the wider community by driving when there is a viable alternative, then I’m quite happy to see them make a financial contribution to the City of Melbourne. That payment is ultimately, if indirectly, going to help make the city centre a better place. And let’s not forget that most night time visitors to the CBD are using Council-funded resources but not paying rates.
The real issue here is not that the charge is wrong but that $4 is too low. A national study of downtown parking in the US found that the average price of curb parking is only 20 percent of the cost of a parking station, giving drivers a strong incentive to cruise. While the situation in Melbourne seems to be considerably better, it would be better if the price was much closer to that of commercial parking stations.