vvEPA
United States
Environmental Protection
Agency
Air and Radiation
EPA420-S-98-OC9
July 1998
Office of Mobile Sources
TRAQ Technical Overview
Transportation Air Quality Center
Transportation Control Measures:
Parking Pricing
EPA's main strategy for addressing the contributions of motor vehicles
to our air quality problems has been to cut the tailpipe emissions for
every mile a vehicle travels. Air quality can at#§&eJmpraKed by
changing the way motor vehicles are used—reducing total vehicle miles
traveled at the critical times and places, and reducing the use of highly
polluting operating modes. These alternative approaches, usually
termed Transportation Control Measures (TCMs), have an important
role as both mandatory and optional elements of state plans for
attaining the air quality goals specified in the Clean Air Act. TCMs
encompass a wide variety of goals and methods, from incentives for
increasing vehicle occupancy to shifts in the timing of commuting trips.
This document is one of a series that provides overviews of individual
TCM types, discussing their advantages, disadvantages, and the issues
involved in their implementation.
5U
i Printed on Recycled Paper
-------
-" fr
-
Contents
O Background
© Costs and Benefits
©Implementation
O Equity Issues
© Examples
•»• Imposing or increasing fees and surcharges for SOVs or
long-term parkers in public parking facilities
w> Giving price preferences to car- and vanpoolers
*»• Taxing providers of parking
*» Imposing parking pricing through regional regulations
w- Tying funding (especially state government) allocations for road improvements to
requirements of local trip reduction plans incorporating parking pricing and other
demand management strategies
Private developers, employers, and transportation management associations also can play
a role in pricing. These entities may take one of the following strategies:
<•>• Removing, reducing or cashing out employer provided parking subsidies
**• Reserving "early bird" or monthly discounts favoring long-term commuter
parking
** Imposing parking pricing and discount parking for carpoolers where free parking
prevails, or where carpoolers enjoy no price breaks (with or without government
regulation)
*»• Developing parking regulations and pricing for commercial and retail mixed-use
areas
*»• Managing and enforcing parking
1. Background
Systems of parking pricing have been in existence for years, as a means of influencing
parking supply and demand. The use of parking pricing as a transportation control measure
developed during the 1970s and 1980s, as the trend in transportation planning and development
shifted toward low-capital, short-term improvements.
-------
Parking Pricing
Page 2
Parking pricing developed as a
transportation control measure
in the 1970s and 1980s.
Prominent early studies of the results of parking
pricing programs were conducted in San Francisco in
1974 and Seattle in 1978. The City of San Francisco
increased rates at public and commercial facilities
through a 25 percent tax and found large variation in
the decline of vehicles parked at the facilities. The
number of cars parked declined at seven facilities, but increased at six others. Overall, the
number of parked cars declined about two percent, but it is not known what proportion of parkers
turned to transit, carpooling, or other alternatives to auto use.
The City of Seattle reduced parking charges for carpools at two Seattle parking facilities
downtown. Rates were reduced from $25 to $5 per month at one facility and were eliminated at
another. Twenty-five percent of the participants in the program were previously SOV drivers,
suggesting considerable reductions in the number of trips. However, some participants were
previously transit users (45 percent) and carpoolers (29 percent), suggesting the importance of
monitoring the effects of pricing programs on all modes of travel.
2. Costs and Benefits
Parking pricing programs affect air quality
primarily by reducing automobile trips and VMT. The
commuter market is generally targeted. Because many
harmful pollutants are generated in the morning hours
from stationary sources, reducing the impacts of mobile
sources in this period is advantageous. Reducing
commuter trips not only reduces emissions associated with VMT, but those associated with cold
starts," when commuters set out in the morning and "hot soaks," when vehicles are parked at
work'and continue to produce evaporative emissions even after the engines are turned off.
These benefits may be partially offset, however, by changes in commuter behavior.
Commuters who shift from driving to transit, for example, may make additional off-peak
automobile trips for errands they previously performed while driving home from work.
Additional short trips may be made by family members with access to a vehicle left at home. If
one worker in a'household is sharing a ride with someone else, the other family commuter may
have to make more circuitous trips before and after work for child care, shopping, and other
errands Efforts to combat traffic congestion may also be hindered if incentives target the
morning period, when pollution is created, rather than the afternoon peak period, when traffic
congestion is often worse.
An additional benefit of limiting parking space may result from the potential higher
economic use of land that would otherwise be used for parking. However, an unintended
-------
Parking Pricing __ Page 3
consequence is that drivers may circle an area frequently in search of parking, which could lead
to increased congestion and emissions. Also, vehicles could be drawn to fringe, retail-only, or
residential parking, which may be undesirable for residents and require further enforcement and
signage needs.
3. implementation
The effectiveness of parking pricing in reducing SOV driving and increasing the use of
alternative modes of travel depends on three variables:
W- The current pricing levels
^ Changes in the price level
»•»• The attractiveness of travel and parking alternatives
Three variables outside of the parking charge itself are important to the effect of pricing:
>»• The proportion of commuters whose employers pay for parking
w- The availability of transit and other alternatives to SOV driving
^ The availability of uncontrolled parking supplies (e.g., neighborhood streets,
vacant lots, utility and train rights-of-way) to which commuters may be diverted
under pricing strategies
Generally, pricing can be expected to be most effective in shifting commuters to
alternative modes, where these variables align favorably with price increases. • For exarrole, price
increases will have a greater effect where employers pay little if any of employee parkh ; costs,
compared to where employers subsidize most or all of these costs. The proportion of commuters
with employers paying for all or part of parking is over 50 percent in some areas. Likewise, price
increases will shift more commuters to transit or ridesharing, where these services and
opportunities are best, all else being equal. Finally, the availability of alternative, free, or
unregulated parking will tend to reduce the proportion of SOV drivers switching to alternative
modes in the face of price increases.
Because parking pricing can be implemented by both the public and private sectors, a
significant investment of government resources is not necessary in every case. If the program is
to be instituted by the public sector, however, the ownership of the actual parking facilities must
also be taken into account. In a downtown or suburban setting, where the public sector controls a
considerable amount of parking, pricing policies may be effective in reducing both local and
regional trip making. However, in localities where private parking dominates, changes in public
-------
Parking Pricing ...-•'• Page 4
parking pricing may reduce local trips to and from public facilities, but have little effect on the
locality taken as a whole. In such settings, parking policies must address the commercial and
private sector.
Historically, one of the greatest state/local incentive/subsidy issues concerns the taxation
of commute benefits. Employer-provided free parking has not been considered taxable income
for the employee, whereas most subsidies for commute alternatives were. However, provisions
in the Taxpayer Relief Act of 1997 and the Transportation Equity Act for the 21st Century h.ive
changed this interpretation. The law now allows employers to provide commute benefits wth
pre-tax dollars. The cost of these benefits is not taxed as income. Tax exemption for commute
benefits is allowed up to the following limits for 1998:
*»• $ 170 per month for parking at or near the work site
<+• $65 per month for public transit passes or vanpool services for work commute
transportation
Limits for 1999 are:
fc* $ 175 per month of parking at or near the work site
*• $ 100 per month for public transit passes or vanpool services for work c rjnute
transportation
Limits are adjusted annually for inflation thereafter.
Another important consideration is the proportion of through traffic and the importance of
reducing it. In urban downtowns, through trips make up anywhere from 30 to 60 percent of auto
trips, though the percent is 15 to 30 percent for downtown areas taken as a whole. For localities
aiming to reduce both local and through trips, pricing strategies will have to be coordinated
across jurisdictions.
The best candidate localities for pricing strategies
are those where some amount of parking pricing already is
in place. It is generally difficult to impose prices where
public or private parking is free. Public strategies, such as
raising rates at public parking facilities for SOV drivers,
providing discounts for carpoolers, and graduating rates by
peak versus off-peak travel, or long- versus short-term
parking, are most applicable where the following
conditions exist:
It fedtffjcult to impose *
parfaiBg prices IB areas •
where alternative public or
private parking is free.
-------
Parking Pricing Page 5
>•»• The public supply makes up a substantial proportion of the total parking supply.
>•»• There are few opportunities for spillover parking (into retail or neighborhood
areas with no pricing or parking regulation).
^ Transit into the priced zone has some capacity or will be improved.
Parking alternatives are also necessary for implementation feasibility. Important actions
to consider include increases in:
**• Transit and carpool services
fc* Preferential parking for residents of nearby neighborhoods
^*- Set-aside or validated parking for shoppers
^- Preferential parking by location and rate for carpools
*»• Enforcement
4. Equity Issues
Most parking pricing programs target commuter home-to-work trips. Commuters must
therefore ansorb the majority of the program costs. The benefits, however, are spread across a
broader spectrum of the population. Additionally, if pricing programs are implemented by the
private sector, equity questions exist in the levels of parking fees charged. Because employers
are often reluctant to take away a benefit currently offered to their employees, the burden of
parking fees -nay be shifted to new employees.
5. Summary of Recent Examples
There are many cases of declines in SOV driving resulting from employers imposing
parking pricing or removing parking subsidies, whether alone or in combination with alternative
mode programs. Examples span suburban, urban, and downtown areas. However, several of the
cases suggest pricing not only influences ^
SOV driving, but also the location of ~~
commuter parking. In some cases,
pricing has shifted transit users to
carpooling. Another important
consideration is that substantial price
changes are required to bring reductions
in SOV driving.
One firm in Seattle; wbicll charges employees
$180 per month for parking maintained an
SOV modal spit, orapsrcent^ compared to
"f. * * ? •£$> Jt »"fc_j * W»*_ * *•£ f-
an area rate <
-------
Parking Pricing , ; Page 6
For example, Johnson & Higgins, a brokerage firm located in downtown Seattle, charges
$180 per month for parking. The firm maintains an SOV modal split of 23 percent, compared to
an area rate of 43 percent. The success of the program is credited to the high parking fee.
Another Seattle employer, the Puget Sound Blood Center, charges $50 per month for
employee parking, significantly less than Johnson & Higgins, but the parking supply is so tight
that there is a seven-year waiting list. As a result, the Center's SOV modal split is 34 percent,
just over half the area SOV rate of 59 percent. Neither of these two examples estimated the
emissions impacts of their pricing programs.
6. Sources
[1] U.S. Department of Transportation. Parking Supply Management Document. Obtained from
the U.S. DOT/FT A Internet Web Site (www.fta.dot.gov).
[2] "Reducing Greenhouse Gas Emissions Througjnthe TransaSpttit Partners Program: Recent
Trends and Case Studies." Prepared for U.S. EPA Office of Paly,'Harming, and Evaluation
(September 22, 1995).
7. On-line Resources
The Environmental Protection Agency's Office of Mo&flb Sources has established the
TCM Program Information Directory to provide commuters; the transportation industry, state and
local governments, and the public with information about JTCM programs that are now operating
across the country. This document and additional information on other TCMs and TCM
programs implemented nationwide can be found at:
http://www.epa.gov/omswww/transp/traqtcms.htm
The EPA's Market Incentives Resource Center (MIRC) Directory of Air Quality
Economic Incentive Programs is an on-line resource which features a compilation of market
incentive program (e.g., transportation pricing, vehicle buy-back, trading programs, etc.)
summaries from around the United States. The MIRC Directory is posted as a link from the
Office of Mobile Sources' home page at:
http://www.epa.gov/OMSWWW/transp/traqmkti.htm
-------
------- |