Managing on-street parking for local benefit; the case for Parking Benefit Districts
Parking is often the centre of debate in our cities, particularly on-street car parks, who gets to use them and how we manage them. Recent controversy has focused on new infill housing developments, which often provide fewer off-street car parks or none at all, which can lead to increased pressure on the street1. This comes on the back of councils, at the direction of central government through the National Policy Statement on Urban Development2, removing Minimum Parking Requirements of new homes to provide off-street car parks.
So, why remove Minimum Parking Requirements? It is critical for housing affordability and supply
Ultimately, car parks cost money and place a high cost on new housing supply, contributing to lower supply and affordability issues. In simple terms, a car park takes up land and has a construction cost.
Let’s play this out in two completed developments in Te Atatū Peninsula in Auckland. One development provided zero car parks and the other provided one car park per unit.
The Auckland Council 2021 property valuations found land in the area was ~$2142 per m2. The minimum car park area is 12.5m2 (excluding driveway access), making the land required for a car park ~$26,785 alone. Access, between the 8 car parks, requires another ~120m2 or $257,040 of land. Splitting this between the 8 car parks brings the total land cost of each car park to $58,915, and that is before the cost of construction.
So, in the development with 0 car parks, purchasers were able to save ~$60,000 on the car park. It also enabled an additional two homes to be built on the same land area, which could be expected to provide some efficiencies of scale and potentially reduce build costs further.
In several recent apartment developments in Auckland, car parks have been “unbundled” from units when buying off the plan. This means buyers had a choice on whether they want a car park, and can see the price of the car park, separate from the apartment. The cost of these car parks has ranged in cost from $40,000 to $60,000 off the plans in most suburban apartment developments.
This reduces the barrier for first home buyers or means someone could spend the equivalent on a larger home or better furnishings. Fundamentally though, this is about enabling choice. Individuals should be able to buy or rent homes without paying for parking or indeed, being able to choose how they pay.
Managing the effects
The issue with this, as we opened with, is the flow-on effect to on-street parking supply, when some residents inevitably end up parking on the street. Existing residents might be accustomed to being able to park on the street easily, even if they have space to park on their property. Busy on-street parking can also create issues for vehicles being able to move along a street, which is particularly an issue with emergency vehicles.
It’s important to recognise, that streets are public spaces, and no one should have a right to use the space over another person. So, how can we manage it better, to ensure parking for those who need it, while for local benefit?
At the start of this article, we discussed the cost of off-street parking to purchase a home. This cost also exists for those renting homes. By pricing on-street parking, we can encourage people to consider how they want to pay for parking, either purchasing or renting a home with off-street parking or paying for on-street. This can reduce demand, improving the availability of car parking for those who need it.
Parking Benefit Districts
Okay, but who wants to pay for something they currently use for free? Well, this is where Parking Benefit Districts come in.
A Parking Benefit District is where revenue from on-street parking is ‘ringfenced’ to the local area, so people see the money invested in their local area. Part of the opposition to paid parking is that no one knows where revenue from paid parking goes, they don’t see any benefits from it (even if it does improve car park availability), so they often view it as a ‘revenue gathering scheme’.
This concept is excellently explained by Donald Shoup in his 2023 paper Parking Benefit Districts3, though he originally detailed this in The High Cost of Free Parking4.
"Charging for curb parking and spending the revenue on general public services produces pain for curb parkers and no obvious gain for anyone else. Spending the revenue to improve public services on the metered streets will turn the pain for curb parkers into gains for businesses in a commercial district or people in a residential neighborhood."
This could work in different ways in different contexts, noting that the revenue is likely to be limited in most circumstances, and therefore will not be able to fund large capital projects.
In suburban residential areas, where intensification is occurring, revenue could be used to fund new street trees, increase investment in local road and footpath maintenance, safe crossings at parks and schools, playgrounds or improved public transport infrastructure like bus shelters. Whatever it is, by giving the community a say on how the money is spent in their neighbourhood, support can grow for charging for on-street car parks.
In Town Centres and higher-density, mixed-use areas, the ringfenced revenue could be expected to be higher, based on higher demand for parking in these areas. Again, engagement with residents and businesses is critical to deciding how revenue is spent. However, in busy areas, it has the potential to help bridge funding gaps on street upgrades and community infrastructure.
For this (and all parking management) to work, councils need to be able to undertake enforcement and fines should at least cover the cost of enforcement, or the system falls over. It’s positive to see changes coming on this front to bring penalties and towage fees in line with recent inflation5.
Parking is often contentious. However, like all challenges associated with urban intensification, with the right approach and engagement with the community, it can also be an opportunity to help create better functioning and more liveable towns and cities.
Ovenden, K. and M. McKelvie (2024). Life in medium density housing in Tāmaki Makaurau / Auckland. Auckland Council technical report, TR2024/6
Ministry for the Environment (2022). National Policy Statement on Urban Development 2020 – Updated May 2022. https://environment.govt.nz/publications/national-policy-statement-on-urban-development-2020-updated-may-2022/
Shoup, D. (2023). Parking Benefit Districts. Journal of Planning Education and Research, 0(0). https://doi.org/10.1177/0739456X221141317
Shoup, D. (2005). High Cost of Free Parking (1st ed.). Routledge. https://doi.org/10.4324/9781351179539
Brown, S and Upston, L (2024). Government to update parking penalties. https://www.beehive.govt.nz/release/government-update-parking-penalties
This is an interesting piece, particularly re making costs and benefits visible and not preferencing owners over renters. I think there’s also the question of commercial off street parking. In Sydney there is a CBD parking space levy (Parramatta and Chatswood also) used to fund pedestrian and cycling work. In Aotearoa it might also make land banking less lucrative.