I never realized that the best way to treat a junkie was to pay for his next score.
Northeast Ohio’s addiction to free parking and the toll it has taken upon the region have been well documented. But apparently Cleveland City Council didn’t get the memo. Back in 2008, Cleveland City Councilman Zack Reed introduced legislation that provides free meter parking for drivers in downtown Cleveland on Black Friday and the day after Christmas. Councilman Reed prominently displays the fact that he helped usher this legislation through Council on his website.
It’s worth noting that Garrett Hardin condemned this exact practice back in 1968 in “The Tragedy of the Commons”:
A simple incident that occurred a few years ago in Leominster, Massachusetts, shows how perishable the knowledge is. During the Christmas shopping season the parking meters downtown were covered with plastic bags that bore tags reading: “Do not open until after Christmas. Free parking courtesy of the mayor and city council.” In other words, facing the prospect of an increased demand for already scarce space, the city fathers reinstituted the system of the commons.
As if we needed further evidence that Cleveland’s transportation policies are stuck in reverse, our best parking strategies still haven’t caught up to the 1960s. So let’s explore why providing free street parking on Black Friday and December 26th is a terrible idea.
First, the economics of this idea make no sense. Depending on the location, parking meters charge roughly $1-1.50 per hour in downtown Cleveland. They generally carry a 2-hour maximum, meaning that shoppers will pay, at most, $2-3 to park. But people visiting Tower City Center, which houses nearly all of downtown’s retail businesses, can already park in the attached parking garage for $6.
But, smartly, Tower City ties the cost of parking to the amount that shoppers spend at its retailers. If a person spends $30, Tower City offers parking validation, which reduces the cost of parking to $2. And on Black Friday, if a person spends $100, Tower City will provide free parking and a $20 gift card. Effectively, rather than providing an incentive to people who have already spent money on retail, Councilman Reed and his colleagues are providing a parking incentive to people in the hope that they will spend money on retail. This is a terrible strategy.
I have no doubt that having to pay for parking keeps some people from coming downtown. But are people who base their shopping choices around whether or not they have to spend $2-3 to park their cars really likely to spend a lot of money on retail purchases? As Donald Shoup argued (PDF) when discussing parking fees for restaurants:
And who is likely to leave a bigger tip for the waiters in a restaurant? Drivers who are willing to pay for convenient curb parking if they can always find an open curb space? Or drivers who will come only if they can park free after circling the block a few times to find free parking?
Secondly, providing free on-street parking for retail businesses does not appear to increase actual retail purchases. When free parking is available, people who are not shopping may access it and those who are shopping will tend to remain parked for longer periods of time. Retail businesses depend upon customer turnover to increase their sales. Research from the Netherlands has demonstrated that higher prices for retail parking increases shopper turnover, which can lead to higher retail sales. Accordingly, Councilman Reed’s plan to increase retail sales may have the opposite effect.
Lastly, providing free parking creates an inequity issue for people who do not own a car. As I’ve noted before, more than one-quarter of Cleveland households lack access to a vehicle. Yet, because the cost of parking is already factored into the price of retail goods, these individuals will have to pay for the hidden cost of parking, despite the fact that they will not take advantage of it. Ohio’s transportation policies are already skewed heavily enough towards driving. The round-trip cost of taking public transportation to Tower City ($4.50 per person) is higher than the price for two hours of on-street parking. Requiring the City to pick up this tab only serves to widen the gap between drivers and non-drivers.
We’ve been told time and time again that downtown Cleveland is experiencing something of renaissance with more than $12 billion being invested in capital improvements. Residential occupancy rates have been above 95% for at least two years. The city and other organizations have spent vast sums of public and private money to attract businesses and tourists to downtown.
But let’s face it. We can either be experiencing a renaissance and revival of downtown, or we can be so desperate for one that we’re willing to pay people to park. We can’t have it both ways.