Matt Yglesias’ recent post about tradeable parking permits contains an interesting idea.
…I do think there’s an even better way. That would be to simply stop handing out new street permits altogether and turn the existing permits into tradeable private property owned by the people who hold them. Creating that kind of windfall for incumbent parkers would be moderately unfair, but precisely because it’s unfair it would actually accomplish the desired political objective of halting parking-related objections to new development. For incumbent permit-holders, development would no longer degrade the value of their parking permits. Since the total number of permits would be capped, there’d be no scarcity of street parking. And since the permits would be tradable property, new residents would actually increase the market price. Now everybody’s happy.
The basic rationale with parking permits is thanks to new construction or a new attraction (e.g. a Link Station), demand for street parking exceeds supply. The way Seattle currently addresses this problem in a commercial district is with metered parking. In a residential district, it’s a “
Residential Restricted Parking Zone” (RPZ) that allows 2-hour parking for guests and customers and offers all residents a long-term parking pass for a nominal annual fee, discounted for low-income residents.
This approach has its merits, but it doesn’t align the incentives of residents with broader policy goals very well. If a new development adds residential units, that increases competition for parking. As a result the fees will have to increase (unlikely for political reasons) or it will simply become harder to park. Similarly, taking on-street parking for safer bicycling or faster transit constrains supply and will either raise parking pass fees or make parking spaces scarcer. Residents who have no subjective desire for more neighborhood activity or transit service and don’t care about broader environmental or social justice goals therefore correctly perceive their interest in opposing development and bike/transit lanes.
However, the City does have those broader environmental and social justice goals, and they’re correct ones! It would certainly be worthwhile to design policies that not only support those goals but also broadly create winners rather than losers. Tradable permits accomplish this.
To start, the City gives away a fixed number of permits based on the street parking capacity of the area. Depending on the current supply, this might be everyone that lives there or merely current permit holders. As Yglesias points out, it’s certainly “unfair” to future residents, but if there’s anything to learn from observing zoning processes it’s that interests of potential future residents are already abused by the status quo policy. If there’s any annual fee, it’s what’s necessary to cover the costs of enforcement. The key is that no further permits will be issued.
It’s clear that this change aligns the tangible interests of incumbent residents with density. A new development, regardless of whether or not it has parking, will to some extent increase demand for parking and therefore the value for existing permit holders. Meanwhile, the overall volume of long-term car storage on the streets cannot change. It’s win/win, except for new residents that might want to park. However, a new resident can presumably find a place with off-street parking, or buy a permit, and the current solution of not building the housing at all is dramatically inferior.
Similarly, repurposing street parking for a transportation use involves taking permits off the market. This is simply a matter of buying permits from willing sellers, which again boosts values for other incumbent permit holders. That can be expensive, but is better than not doing the improvement at all.
This system may create behaviors that some might find undesirable. In particular, permit owners might move away but retain their permits as an income source. This would create a class of residents who are renting permits, and would therefore lose out from development that increases parking rents. Although it’s probably impossible to decisively stamp out this behavior, a city can certainly make it illegal to hold a permit without owning or renting locally to keep it at a manageable level.