Permit Pricing

The recent series of traffic crashes on Portland streets has raised a strong sense of urgency among transportation advocates, community leaders, and local residents to demand action to improve street safety. The tragic death of a child and life-threatening injuries of another caused by two separate drivers have devastated families and our community. As a result, Vision Zero advocates and traffic safety experts are reminding us that while there are many approaches to making streets safer, the most effective approach to reduce fatalities and serious injuries is changing street designs and the built-environment to prioritize the safety of road users over vehicular speed.

However, safety improvements such as enhanced crossings or pedestrian medians that protect the most vulnerable users are often implemented slowly due to the fact the Portland Bureau of Transportation (PBOT) has limited resources for safety enhancement projects and any change to existing streets would likely cause strong local opposition (these are explanations but not excuses). This means that if there a dangerous street that you or your child must cross every day to go to work or school, your neighborhood will probably have to wait for years to receive any safety improvement due to lack of funding and lengthy public process.

But what if there is a way for neighborhoods to empower themselves, fund their own street safety improvements, and create the change they desperately need?

Parking Benefit Districts

The answer is parking benefit districts. Parking benefit districts is a parking management tool for neighborhoods to capture parking revenue from both on-street parking meters and overnight residential permits and keep that revenue for the neighborhood. It works like this:

(1) neighborhoods work with the city to identify areas with on-street parking congestion and draw a parking benefit district to charge parking fees within the district boundary to reduce parking congestion;
(2) neighborhoods then can set up a “transportation safety enhancement” fund to collect and keep the net parking revenue after covering the administration costs of the program;
(3) the city can provide a menu of small capital projects or street improvement options to neighborhoods that adopt the program so they can decide how to invest their local parking revenue
(4) empowered by parking revenue, neighborhoods can now pay for more transportation options (e.g. bus passes) or small capital projects (e.g. rapid flashing beacon) or that increase the safety and comfort of every resident who uses the street.

The merits and benefits of parking benefit districts have been well documented by many scholars and organizations, such as Professor Donald Shoup at UCLA and the Sightline Institute (I highly recommend reading these articles). Instead of reiterating what these experts have already said, this article will focus on specifically how Portland neighborhoods can take advantage of the proposed residential permit program and create parking benefit districts that will bring locally dedicated revenues to pay for transportation safety enhancements.

Residential Permit Program: A Hypothetical Demonstration

In December, 2015, a stakeholder advisory committee tasked to advise the City of Portland on the development of new parking management tools proposed recommendations for a residential permit program. According to the draft proposal, “the permit area must be comprised of at least 20 contiguous block faces or 5 blocks or 4000’ linear feet.” and the recommended occupancy rate in residential zones is 85%.

Using data from a 1995 parking study in Portland, Shoup estimates that 33 parking spaces are available on a typical block’s 1,012-foot perimeter (The High Cost of Free Parking, p518). Using this measurement, we can conservatively assume that a typical street block face can accommodate 8 parking spaces. In order to not exceed the 85% target occupancy rate, each block face gets 6 residential permits. Thus, a single parking benefit district that contains 20 block faces (or 5 full blocks) in any inner Portland neighborhood can potentially sell 120 (6 x 20 = 120) permits to the residents living within and adjacent to the parking benefit district.

Hypothetically, if each residential parking permit is priced at $25 a month, and all 120 permits in this parking benefit district are sold, the district would generate $3,000 (25 x 120) a month or $36,000 a year in parking revenue for the neighborhood. The amount of parking revenue may be even higher if the permits are progressively priced as recommended by the parking stakeholder advisory committee. Meaning that the second parking permit will cost more than the first, etc., and residents with off-street parking will pay a higher price for their first permit. If the second permit costs twice as much as the first one, at $50 a month, and if two-thirds of the permits were sold in at the first-permit rate and the rest were sold at the second-permit rate, this would yield $4,000 a month ($25 x 80 + $50 x 40 = $4,000) or $48,000 a year in parking revenue.

Admittedly, the math here is crude. Also, no one knows certainly how much monthly permits will cost nor who will have the power to set the price. Nevertheless, this hypothetical scenario shows how much revenue neighborhoods can potentially receive if residents decide to charge for curb parking and the forgone opportunity cost for every day curb parking remains free.

If a neighborhood can receive $48,000 a year to spend on transportation safety enhancements, what kind of improvements can the residents collectively buy? A PBOT document  from 2013 for the East Burnside Street Transportation Safety Project shows cost estimates for some safety improvements recommended for East Burnside:

• Speed Limit Reduction: $100 per sign; $2,000 – $5,000 per study
• Travel Lane Modification: $150,000
• Pedestrian Refuge Island: $10,000-$20,000
• Curb Extensions: $30,000-$40,000 per corner
• Flashing Beacon: $200,000

In addition, according to BikePortland, a traffic diverter could cost between $5,000 and $30,000. Based on these cost estimates, a neighborhood that sets up a 5-block parking benefit district can pay for a pedestrian refuge island, a curb extension or a traffic diverter within one year and still have some change left to pay for other public goods like street trees.

Think about a street like Hawthorne Boulevard. It is a major commercial corridor that attracts a lot of foot traffic but it is not a friendly environment for walking and biking. Nonetheless, PBOT’s data show that compared to other high crash corridors, Hawthorne is relatively safe. Therefore, it is difficult to justify using public money to pay safety improvements on Hawthorne when there are many other streets in worse shape in East Portland. If both Richmond and Sunnyside set up a parking benefit district in their neighborhoods, they could pool their resources together and enhance safety on Hawthorne rather than waiting for the City to take action.

A Benefit in Search of A Beneficiary

In The High Cost of Free Parking, Shoup notes that “curb parking revenue is a benefit in search of a beneficiary”. No one likes to start paying for something they have always had for free. However, charging for on-street parking in residential neighborhoods would be a lot more political favorable if the people who have to pay see their money come back to their neighborhood and used for their benefits. By adopting a residential permit zone to charge the right price for parking and a parking benefit district, neighborhoods that have experienced on-street parking congestion can (1) reduce over-crowding of curb parking caused by new development, (2) maintain access to convenient curb parking spaces, and (3) empower themselves to invest in transportation safety enhancements within the neighborhood boundary. Long-term residents who bemoan the loss of “livability” and increase in traffic on local streets can turn back the tides by charging for curbside car-storage.

Indeed, evidence from at least nine other U.S. cities show that parking benefit districts are invaluable neighborhood assets. For example, parking benefit districts in Pasadena and San Diego generate over a million dollar of parking fees annually dedicated for local investments. In Austin, TX parking revenue has created better public spaces and infrastructure for walking and bicycling by paying for sidewalk repair, cycle tracks, bike racks, street trees, and benches.

Some people might say “Portland is not Austin” or “Portland is not San Diego”. How do we know parking benefit districts will work in Portland and bring all the benefits it promises to bring? It will work in Portland because it already did – in the Lloyd District. The Lloyd District used to be an auto-oriented, suburban style neighborhood of office buildings and shopping mall and devoid of street life. However, in 1997 the district association turned on its first 1,000 parking meters and soon some employers started charging commuters for parking as well. Today, funded by parking revenue from 1,900 metered stalls, Go Lloyd provides incentives to commuters to use transit, walking, and bicycling and improve workers’ access to more transportation options.

The results of investing parking revenues in non-drive alone mobility options is impressive. According to BikePortland, between 1994 and 2013, the percentage of drive-alone commuters in the Lloyd District dropped from 72 to 42 percent. Transit usage increased more than three-fold, and walking and biking to work also increased significantly. It is also no surprise that this area has some of the best bicycling and walking infrastructure in the City. The story of the Lloyd District shows when a neighborhood decides to abandon the entitlement of free-parking, it opens itself to a future of increased safety, livability, and mobility options for its residents and workers.

From Curb Enthusiasm to Neighborhood Empowerment

The parking war in 2013 that led Portland City Council to adopt mandatory parking minimums for new development demonstrates that on-street parking is perhaps the most sacred amenity in Portland’s residential neighborhoods. This outcome also affirms that neighborhood voices are extremely powerful in the politics of parking. But the desires for better parking management and safe streets for our children and families are not mutually exclusive. In fact, there is a lot of untapped synergy that can create strong political momentum to accelerate infrastructure investments that will benefit neighborhoods locally.  

The good new is PBOT is working on developing various parking management programs, such as residential permit zones and performance-based pricing, that will increase the feasibility of parking benefit districts. We are already halfway there, but our elected officials are averse to political risks and they need to know that the desire for parking benefit districts comes from the neighborhoods, not planners. In the wake of the recent spree of traffic violence on our streets, it is clear that we urgently need infrastructure improvements and waiting for the City to to fix our streets may result in another devastating, yet, preventable, traffic death in our community. Parking benefit districts can empower neighborhoods with locally-collected and locally-spent revenue and that allows neighborhoods to pay for safety enhancement projects and reduce traffic fatality and serious injuries.