Wednesday, July 11, 2007

When parking becomes economic policy …

[Hometown Week, continued …]

  How much (and when) should the public pay for parking?  In my old hometown, Silver Spring, Maryland, the local county government has just decided to back down from a plan to raise and extend parking fees at government lots in the newly "revitalized" suburban downtown.  Both drivers and local residents, many of whom have received direct or indirect government subsides in recent years, opposed the increases.  Some government officials advocated higher parking charges in order to raise revenue and discourage long-term parking in valuable spots.   

Silverspringellsworth   What's the right answer?  The free market would set fees based on supply and demand - and evidence of private parking fees, even in suburban areas such as Silver Spring, is that it does not come cheap.  Environmental economists might applaud high parking rates as an appropriate way to force drivers to "internalize" the many public costs of driving and parking (including pollution and taking up public land).  But when government controls the rates, different issues come into play, including the natural public desire for a "freebie" and the government's desire to shift around economic development.  In Silver Spring, business owners argued vocally that it made little sense for the government to at the same time subsidize the economic redevelopment of the once "declining" old suburb downtown, but then to discourage patronization of the new development with high parking rates.  As it now stands, the county government imposes a variety of parking charges in different spots among the inner suburbs.  If I were a small business owner in a neighboring suburb, I might complain about a further subsidy to my competitors in Silver Spring through free parking.

   It seems to me that government should start with the notion of a uniform fee structure across its jurisdiction, with uniform higher fees at high-demand times.  To try to foster development through changing parking fees strikes me as an odd and likely ineffective form of economic policy …

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