Out of Control Policy Blog

Solving the Parking Problem in DuPont Circle

One of our neighbors bought a genuine London Cab a couple of years ago. Importing such a vehicle is very challenging: the new cabs off the assembly line do not meet US emissions laws and those that qualify as antiques—and thus are exempt from such standards—are usually rusted through and unusable.  The only way for a London Cab to be legally brought over (as this one was, based on the stickers in its window) is to have a team of mechanics completely rebuild an existing one, virtually from the bottom up, while clearly documenting each step of the operation. Needless to say this cab represents a pricey investment.

However, such cabs are relatively cheap to store: Since our neighbor purchased his London Cab it has been parked on the street, in front of our building in the exact same space. The annual cost to its owner for the decal on his car that allows him to park it on our street is a mere $25.

In some places a fee that low would make perfect sense, but we happen to live on the edge of two very dense, affluent neighborhoods in Washington DC where parking is exceedingly scarce. Private parking spaces rent out for as much as $350 a month, and a parking spot in an underground garage recently sold for $60,000.  In other words, street parking is over 100 times cheaper than private parking.

As a result, street parking is extremely difficult to find in our neighborhood.  During nights and weekends, when people flock to the neighborhood to dine, a significant proportion of the traffic consists of people looking for a parking spot.  Even during the day local residents who park on the street spend a considerable amount of time looking for an open space.

The economist’s solution would be to charge something closer to the market price for the scarce resource of on-street parking, which is precisely what a local politician has suggested. The result has been predictable:  He has been bombarded with vitriol well in excess of anything he’s seen before, and he has since retreated from this stance.

I get why this cohort might be opposed, but simple opposition does not make good policy: there are all kinds of government services that some folks would rather get for free but offering such services for free doesn’t make economic sense. Our National Parks charge an entrance fee, for instance, and public high schools and colleges charge fans to come and watch football and basketball games in arenas and stadia paid for by tax money. They do so because failing to charge a fee would often result in overflow crowds and because asking those who use the facilities to defray some of the costs seems like a fair way to do things. I submit that the same logic applies to people who wish to park (or store) their cars on the street.

Those protesting the proposed parking permit increase offer a variety of arguments as to why it shouldn’t go forward: Some suddenly discovered libertarianism and wish to keep the government from amassing more tax revenue to spend on its nefarious agenda, while others have protested this plan by arguing that it will have a disproportionate impact on the poor, who cannot afford to pay more for a parking fee.

No one in my neighborhood is as worried as I am about the government amassing too much power or money (I suspect that is literally true, given that the Green Party typically fares better than Republicans in our precinct), but this isn’t a valid concern here.  The revenue that would be raised from this would be a pittance compared to how much the District generates from its ten percent sales tax and a personal income tax with rates that exceed nine percent, neither of which are apparently all that objectionable to my neighbors with automobiles. Offsetting this revenue by lowering property taxes in the neighborhood would be one trade-off that should assuage those with this complaint.

And virtually free parking for all is a terrible way to help the lower class in our neighborhood, who are much less likely to own a car than middle or upper income households. If there were a goodly number of working poor who needed inexpensive parking to maintain their cars it would not be terribly difficult to devise a program that would give low-rate permits just to them.

“Nearly free” is a terrible price for a scarce resource, even if it is one that the government owns. Setting a price that reflects the value the market places on on-street parking would greatly alleviate the irritating parking shortage and raise more money in a progressive way than nearly any tax program could hope to accomplish. 

Ike Brannon is director of research at the R Street Institute, a think tank based in Washington DC.


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