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.

35 Replies to “Parking Permits”

  1. I’d like to see the permits cost enough to pay for the upkeep of the section of asphalt underneath the parked car, and be set to automatically increase with inflation. If people want to treat a parking space on public right-of-way as their private property, then let them pay for the upkeep as if it were their private property.

    If that is politically undoable, establish a schedule for increasing the annual fee until it reaches the cost of maintenance plus program administration, and then have the annual increase slow down to the rate of inflation.

    Regardless, an annual inflation adjustment needs to be built into the fee automatically, not requiring repetitive council action.

    I see this proposal as totally viable.

  2. I really like this idea. I think just having this discussion can change the way people look at the issue. The first, obvious objection is that it is unfair to the new residents. Yes, it is. But it is a lot more fair than restricting development. In other words, the new residents would rather take their chances and buy one of the permits (or buy parking elsewhere) than having it forced upon them, whether they want it or not (which is the status quo in many cases).

  3. It’s a great idea, but, of course, the devil is in the details. Some big issues I see that would have to be worked out include:

    1) What to do about contractors? Are they exempt? If so, are you willing to tolerate some amount of abuse, where a contractor by day takes his work vehicle during his free time in order to take advantage of the exemption.

    2) What about short-term residential-related parking? For example, visitors? Residents who do not own a car that want to park a rental car for a couple of days? Loading and unloading while moving in or out of an apartment?

    1. Today there are temporary/visitor permits of various lengths. Any new system would surely have them, with some reasonable set of restrictions (they’re limited in number, you can’t string them along forever, etc.).

      In zones where parking is restricted during the day contractors might technically have to get visitor permits from their clients. But in most residential areas parking is only tight during the evening and overnight, so either restrictions would be relaxed during the day or enforcement would be pretty much nil.

      1. Most zones are restricted during the day due to institutional parking generators. There are actually only a few night time zones.

    2. An RPZ is typically 2 (or even 4) hour parking for non permit holders, and I presume the same would be true in this scheme.

  4. People don’t vote their financial self-interest. They oppose development for a variety of reasons and even if they can profit from parking scarcity they’ll continue to worry about all the other stuff they put on their anti-development fliers: housing values, property taxes, aesthetics, noise, crime. People that fight change fight change on every front, and they’re often not the same people that want to actively profit from the change.

    The city doesn’t have to create a “parking landlord” class to assuage fears over parking scarcity, and creating such a class is hardly a guarantee of political support. If the city decides to cap permits within a neighborhood, it can do it more simply, in a way that reflects the fact that it’s the city that owns the land, not the permit holders. To quote SDOT, “Curb space is part of the public street system, a public good available for all people to use. To restrict the use of curb space for some requires a compelling reason. The Restricted Parking Zone (RPZ) Program was created to help ease parking congestion in residential neighborhoods, while balancing the needs of all people to be able to use the public streets.” People that think they own curb space are about the most obnoxious people in Seattle, and we hardly want to encourage that. So here’s my cap proposal.

    1. Decide how many permits to issue in a zone based on {insert made up formula here}.
    2. Invite existing permit holders to renew their permit each year first.
    3. Then other people can apply for remaining passes.

    Existing restrictions on residence would continue to apply; permits today appear to be effectively issued to a single vehicle, and that continues. The only difference is that permits can be transferred to new people/vehicles. The city charges some small fee for the transfer (which works basically the same whether it’s to a new person or just a new vehicle), but if there’s really a serious parking shortage the original holder probably charges more, representing the value of (a) getting a permit when the city won’t issue any more and (b) having a spot in line for the next renewal cycle. So when you move out of the neighborhood or decide to get rid of your car, you have an opportunity to sell your permit, but it doesn’t extend beyond the next renewal cycle.

    Temporary 60-day permits remain available (in this situation, in limited numbers), but you can’t string them along for more than a year, and they don’t get you ahead in line for annual passes. So if nobody is offering an acceptable price for transferring a permit, a newcomer has a chance to use temporary permits until the next annual registration, apply for an annual permit, and if enough annual permit-holders randomly drop off they’ll get one. If not they’ll have to go back to the transfer market.

    This way, we do:
    – Cap number of vehicles contending for public parking in a small number of truly congested RPZs.
    – Assure existing residents they won’t lose their ability to park in their zone.
    – Handle mid-year moves in some kind of reasonable way.
    – Provide a small incentive to not keep a car in a congested RPZ.

    But we don’t:
    – Create a new kind of investment or a new kind of landlord.
    – Give people the idea that they own their curb space.

    1. Al, I don’t see how your way of describing the proposal differs significantly from Martin’s. In particular, I don’t see how it avoids creating a “new kind of landlord”. If people can keep renewing their permit, they’ll treat it like a property right regardless of whether it is expensive, cheap, or free.

      None of the proposals allow anyone to control a particular curb spot. The current system and all proposals described so far are just hunting licenses for parking spots within an RPZ.

      1. It differs because you have to keep renewing and paying for the permit every year instead of owning something perpetual, and because they can’t be rented or accumulated. You get to keep your spot in line, but only if you show up every year and continue to be eligible. If you move away you can ask a newcomers whatever you want to transfer your permit to them, but you have a limited time before it defaults back to the city.

        If the city needs to reduce the number of curb spaces available in an area it may need to reduce the number of permits issued. That’s hard if there’s a set of owned permits in circulation — the city would have to buy them back from people to reduce the number. If some number of permits naturally defaults back to the city every year (I’d be really surprised if this didn’t happen) the city can simply decline to issue some of them. This keeps the city in control of public resources. If the city needs to reduce the number of permits below the number of people that want to renew it might be politically difficult, but nobody can claim they’re having their property taken from them. It may mostly be a language issue, but I think it’s an important language issue.

      2. You can say that the value of a given parcel of land is $X in perpetuity, or $Y per year, where Y is much smaller than X. You can think of $Y as the annual “rent” that you get for holding the land. (This is rent in the economic sense, not necessarily in the tenant-landlord sense.)

        Land prices are inversely correlated with the holding cost of the land (i.e. the tax). The more you have to pay on an ongoing basis to hold the land, the less net rent it produces, and therefore the less it’s worth.

        The difference between your proposal and Martin’s proposal is that, in your proposal, parking permits come with an annual “land tax”. Your proposal is one extreme — set the tax at exactly the rental value of the parcel, such that the cost of the parcel drops to 0. Martin’s proposal is the other extreme.

        I like your idea, but politically, I think it might be easier to pass something that’s in between the two extremes. Charge some amount for the right to buy the parking permit, and then also charge an annual (or monthly) fee for holding the permit. The fee will not be so high as to be obnoxious, but it will be high enough to decrease the price of permits, and to discourage people from hoarding permits that they won’t use.

    2. I’m not sure Martin’s proposal will even extinguish opposition on parking grounds, for the same reason people whose property values will go up with an upzone still complain about being “forced” out of a single family home.

  5. One problem with today’s RPZ system is that residents who don’t own cars, but occasionally rent them, effectively fall through the cracks. The reason why is that the permitting process is all long-term, and nobody wants to pay $60 for a permit that lasts a full year just to park a rental car in front of their house for a couple days. (And a few months later, pay another $60 to park another rental car – because the license number has changed, since it’s a different car, the original permit isn’t valid anymore).

    This year, the fact that Car2Go vehicles are allowed in RPZ zones has mitigated the matter significantly, but you are still screwed if you need to rent a car that holds more than two people, or for a duration of longer than one day.

    1. I can imagine taking a city-run online trading system to an extreme, where there’s a market for parking permits on a daily basis – going for a 2-week trip? sell your permit for those weeks. I can imagine the ability to buy or sell for any length of time – those that want low hassle just keep theirs for the year, those that are more price-conscious buy for the year and sell on the spot market, and renters buy for the day. (I considered continuing the model to hourly trades for daytime parking, but I’ve gone quite far enough)

      1. If you were going on vacation, would you sell your car for two weeks, and then buy another one when you came back?

        Permits are different from cars, since the transaction costs can be much lower, and every permit is exactly the same. But even so, who’s to say that you’ll definitely be able to find a seller when you get back?

        I think it’s much more likely that we’d see an AirBnB-style model, where people rent out their parking permits when they’re not being used.

      2. How would such a rental work, and how would you provide the renter with the accountability to ensure the permit actually gets returned when the contract is up? Also, anything that involves the owner and renter physically getting together to exchange a piece of cardboard seems too cumbersome to be practical. In other words, from the owner’s perspective, the potential revenue would, in many cases, be too small to justify the bother.

        One potential solution is to dispense with the idea of cardboard permits altogether, in favor of virtual permits, which would be nothing more than an entry in a city database specifying which license plate numbers are allowed in which zones at which times. This way, selling or renting a parking permit is as simple as clicking a few buttons on a web form.

        As to enforcement, the parking officers already have equipment that allows them to scan license plates as they cruise by at 30 mph. All that’s needed is for the system to do an automated database check and trigger a beep when it detects someone parked illegally.

        And, yes, the ability to rent permits, rather than buy it outright is important for all sorts of residential scenarios. For example, visiting friends (including a potential overnight stay), rental cars used by residents, U-hauls for moving in or out of an apartment, etc. And if people move out, but keep the parking permits as an investment, so be it.

    2. Except…. you can get a guest permit instead that’s not tied to one car for the same cost. And, that cost is $65 for two years, but in many areas (Capitol Hill) it’s $0.

  6. On First Hill RPZ Zone 7 … The cost for the sticker is $0 and you get a guest mirror hanger that has no time limit either.

    Of course you have to own a car registered to your address. If you don’t then you get nothing

    1. Interesting. I didn’t realize that, and it shows how the proposed system is better. Under the current system, if you own a car and live in the neighborhood, you get something of value (a sticker). If you live in the neighborhood, but don’t own a car, you don’t get a sticker. Either way, in most cases, you dictate to the new inhabitants that they must pay for parking facilities, whether they want (or use) it or not. You have no incentive to encourage density, because that would mean that when your friends come to park, they have trouble finding a spot.

      With the proposed system, you can buy or sell the permit as you see fit. If you rarely need it, then you can sell it. This gives you something of value even if you don’t use a car.

  7. The idea that every residence is entitled to on-street parking is one of the problems. There should be no entitlement for residents to use on-street parking every day. Parking on city streets is a shared resource which should not be monopolized. Ideally every resident who owns a vehicle would have an off-street parking place for that vehicle and all of the on-street parking would be available for visitors.

    This is a lot less of a problem out in the suburbs. There it is almost unthinkable for a residence to be built without off-street parking for multiple cars.

    1. And to be clear, I’m not advocating that building codes require parking to be provided for residences. I think as density increases we need to move toward a system more common in places like Manhattan where residents with vehicles need to arrange for parking in lots or garages if they do not have parking at their residence. There are many places where owning a car means paying for parking both at home and work.

    2. What “should” and what “can” are often at variance with each other.

      Tradable parking permits still treat on-street parking as a shared resource, but one that is under much more significant demand than previously.

  8. “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, ”

    It’s quite possible to stamp it out. Make it legal to *sell* the permit but make it completely illegal to *rent* it; specify that anyone caught *renting* a permit will have their permit revoked without compensation.

    There is no “right to rent” property.

    1. Another way to do it is to pass a law stating that if someone “rents” a permit, the “rent” is considered to be a sale and the “renter” is considered to be the actual owner, with the original owner retaining no rights.

      This is similar to traditional law under which 100-year leases were converted into sales, with the lessor’s rights extinguished. While such laws are no longer in force in many states, they are constitutional and perfectly straightforward to pass.

      1. And if you want to allow *some* degree of renting, you can make it so that the permits can be rented for no longer than 11 months at a time, or something like that. As with leasing of real property, a lease for less than 11 months would be considered a lease, but a lease for longer could be converted spontaneously into a sale.

        There are lots of ways of regulating this sort of thing, and they’re all things which city councils generally have the power to do.

      2. Reflecting on these details for just a moment reveals the bottom line. A policy like this is absurd for a city to run and would have no political champions to ever implement.

  9. What this post, and most commenters miss is that the major purpose of the Residential Parking Zone scheme in Seattle is to make free on-street parking spaces unavailable to hospital and university commuters in the residential neighborhoods in which they (institutions) are located. All so-called “major institutions” are required to take steps to reduce SOV commutes to something less than 50% of the total. There are a number of strategies to try to reach this goal, but if there are lots of free all-day on-street parking spaces, then, even with subsidized transit passes, reduced-cost carpool parking and all the rest, it’s difficult to get SOV commute numbers down to the required level.

    Presumably, the public policy that writers of this blog support are inconsistent with encouraging (or failing to discourage) unlimited SOV commuting to institutions. Keep in mind that, hospitals and universities, unlike other non-residential uses, are allowed to locate and expand in residential neighborhoods where frequently there are many on-street free parking spaces, unlike commercial areas where most available parking is on metered streets or in commercial parking lots and garages. The Residential Parking Zone in Wallingford is an exception, but the zones around Seattle University, Swedish (formerly Providence) Hospital, UW, Childrens’ Hospital and others, make up the vast majority of Seattle RPZ’s The Seattle RPZ system was devised to address this somewhat peculiar situation where large commuter- generators are located in otherwise residential neighborhoods.

    I’m not arguing that the current RPZ system, as a strategy for limiting SOV commuters, is without significant flaws. However, the system described by Yglesias and recommended by Duke is not applicable to the major goal of most Seattle RPZ zones.

    1. That’s a valid point. However, it’s important to remember that no matter how hard the city tries to restrict street parking to residents only, residents will always have incentives (either financial or social) to game the system. For example, some residents will rent out parking permits illegally, and others will use their permits to park their cars on the street so they can rent out their driveway space, which is their private property to do as they please.

      In many cases, people will loan out permits for free as a favor to friends or friends or friends, rather than trying to make money off them, but the effect of this is the same.

      The bottom line is trying to prevent non-residents from renting permits is a losing battle. Better to let the free market take care of it – if there is too much traffic in the neighborhood, simply reduce the number of permits and let the free market drive up the price.

      1. Sure, “no matter how hard the city tries to restrict street parking … residents will always have incentives … to game the system.” As an abstract statement that can’t be denied. But, if there’s to be an informed discussion of these principles as they apply to Seattle, it’s important to recognize that the vast majority of RPZ permits have a license number of the car to which they are permanently attached. Yes, there are guest permits which can be sold or transferred (a practice which is widely condemned by most who live in RPZ zones.) But, you are right some of this happens. I doubt it’s a significant number. What do you think the numbers are?

        Regarding relying on the free market to reduce neighborhood traffic — are you suggesting that other government interventions to force the commute-trip reductions are inappropriate? It is the policy of the City of Seattle to limit the number of parking spaces that each major institution provides. Most hospitals and universities (at least the ones in my neighborhood) do not have an incentive to keep the parking space limits on campus as low as they are now, and if the government-imposed limits were taken away I have no doubt they would build more parking garages. SOV commutes would increase.

        Although, as I admitted earlier, the RPZ strategy has many flaws, it is one part of a strategy that also includes limiting the number of institutional parking spaces on campus. Would you also argue that the City should butt out, and the free market should determine the number of spaces in parking garages that universities and hospitals in Seattle may provide?

        The point is, there’s an interrelated web of strategies in Seattle, and if we’re talking about Seattle specifically it’s important to consider the entire system. Which, come to think of it, would be a good idea for Seattle Transit Blog. With the exception of Chidren’s Hospital, the transportation management plan of every other hospital and university in Seattle needs help in reducing SOV commutes. Take a crack at that why don’t you?

      2. asdf,

        As I explain in the post, if you allow absentee landlords for the permits, you create a class of people (the permit renters) with a vested interest against further density.

    2. RPZ Pass Holder,

      Put a bit more cynically, the purpose of the RPZ is to neutralize opposition to new activity centers by addressing worries about parking. That’s great for institutional development, but it’s not a solution for new residential projects, which just inject more people seeking permits into the system (unless they are built with ample parking).

  10. The major problem with this idea is that the current stakeholder — the city itself — has the most to lose in this scheme. Capping parking permits caps a valuable (and politically agreeable) revenue stream for the city. Unless the city switches to a market-pricing scheme (something I’d like to see anyway — in what world should passes for Capitol Hill RPZ 4 cost the same as lower-demand RPZ 29 in Columbia City?) and both controls and makes the market itself, the city comes out the loser. And unless a massive political groundswell takes place, city hall will never allow that to happen.

    That said, I’ll totally get behind the idea of a city-run parking permit market. I worry a bit about low-income equity, though: how you do prevent massive flight from places in which parking demand is skyrocketing and underprivileged groups have trouble paying the fees as they exist already? (“Give up their cars” is not a valid answer here, either; in many cases, they can’t afford to.)

  11. There’s one point I’d like to make that I think gets missed in specific policy arguments, about the reasons people oppose development. My primary point here is that I don’t think the hardcore NIMBYs can be bought, and so there’s no point trying to buy them by handing them a valuable asset for nothing. I think the article misreads their motivations. My read on their motivations is this:

    – They live on a quiet street and want to keep living on a quiet street.
    – They like their neighborhood the way it is and view any change as a risk; some of them might flat-out not want new people around, even, but they’ll probably keep those views to themselves — it’s not a message that resonates in most parts of town.
    – In fliers they talk about arterial traffic congestion and parking shortages because that’s a message that can resonate with people that don’t share their strong aversion to risk and change (and people/businesses that see a lot of potential benefit in more people moving in).
    – They talk about housing costs because that resonates in a city with rising housing costs — even though building nothing hardly guarantees stable land values and housing costs, they can conflate the current building boom with risk of housing price instability in both directions and resonate with a bunch of different people (you can say there’s a risk of both market explosion through upzoning or implosion through blockbusting/slumlording and not even be making a totally inconsistent argument… there’s pretty obviously always a risk of the market moving in either direction). I don’t think money is truly the motivator of hardcore NIMBYism, but it’s a powerful way to rationalize the belief, and a powerful recruiting tool, and housing costs outweigh parking costs by a lot.

    Many of these people are homeowners that would reap significant financial benefits from a rise in property values, but they’re more concerned with potential losses than potential gains. This suggests that offering them another chance for financial gain on their parking spaces won’t change their opinions at all. They’re too risk/change-averse to be bought.

    Furthermore, a lot of the really hardcore change-aversion occurs in non-RPZ neighborhoods that won’t need anything like permit caps any time soon, so they won’t be touched by a program like this. Handing over permanent, trade-able permits would be both expensive and ineffective.

    1. I think you’re underestimating the impact of “swing voters”.

      Yes, there are folks who don’t want their neighborhood to change, ever. And I can respect that opinion, even if I disagree with it strongly.

      There are also folks who are super excited for their neighborhood to change, and who buy a home specifically in the hope that gentrification and densification will eventually make it a nicer area (and increase their property value).

      And there are a lot of people in between — people who may have very specific worries (like parking or crime or schools or whatever), but are generally ambivalent towards development, or maybe even moderately in favor.

      It’s true that permanent, trade-able (how do you spell that, anyway?) permits will not do much for the folks who don’t want any change ever. But it will help to *soften* opposition, because it will remove one of the main arguments that the anti-change folks use.

      Also, when it comes to parking, the fact is that the “NIMBYs” are *right*. If street parking is structurally underpriced, then increasing demand for that parking will decrease its availability. We can disagree about the magnitude of that change (how many microhousing residents want or can afford cars?), but if even one person in a 56-unit microhousing building has a car, then that’s increasing demand for the fixed supply of street parking. So this is a legitimate problem, and the proposed solution would make things better for almost everyone.

      1. I don’t think that gradually increasing RPZ coverage as necessary and capping number of permits issued in particularly tight RPZs is a bad idea, and I don’t think the analysis that street parking is structurally underpriced (in many places) is incorrect.

        I do think that because most people are somewhat change- and risk-averse (we tend to consider potential losses more heavily than potential gains), because housing costs are much greater than parking costs, and because there are lots of things people care about beside their financial bottom lines, that the return on investment for handing out this asset will be minimal. I think the city could soften opposition nearly as much (that is: not all that much) by simply instituting caps where appropriate and inviting existing qualifying holders to renew first, instead of handing people an asset in the form of a perpetual right to use a public resource. And they’d stand to lose a whole lot less, in terms of control (including the ability to set lower prices for permits according to a means test) and revenue.

        Also, the idea that a single car owner in a 56-unit microhousing building is increasing parking demand is hyperbole. The microhousing building probably isn’t built where nothing stood before. At least a SFH probably stood there, but likely more — lots in Seattle’s inner neighborhoods are 4000-5000 sf, and you’re not putting up 56 micro-units on a lot that size (I just looked up some info… some buildings of roughly that size have around 20,000 feet of interior floor space on 4 stories, so they’re probably on at least double-size lots where zoning allows 4 stories… so probably where apartments stood before). It doesn’t take a whole lot of micro-living car-owners to increase demand, but it takes more than one. My guess is that if the number of car owners approaches the number of kitchens they’re probably wreaking havoc on parking demand.

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