Finally, parking spots at the right price

A new program in San Francisco is making sure drivers never have to circle a city block in search of a parking spot.

Torontonians take note:

San Francisco has figured out a way to ensure drivers never have to circle a city block in search of that elusive parking spot. The city simply lets parking prices increase in areas where demand is strongest and fall for lesser-used spaces, ensuring that every city block – and parking garage – always has space available for drivers. Better still, the average price paid for that parking spot has come down.

In 2011, San Francisco was the first city to implement such a program – to resounding success. Early results show the average price paid for a parking by drivers in the Californian city actually fell by one percent (to the surprise of many).

Yet the new parking policy’s most successful achievement has been to raise the price of parking in areas that were most frequented by drivers – a move that pushed cars into lesser-used spots – helping to free up spots for drivers who need them most. Occupancy rates for parking spots across San Francisco are slowly converging to the desired range of 60% to 80% in every garage and city block.

The previous one-price-fits-all model in San Francisco led to greater congestion on city’s main throughways – as drivers hunted for available spots – that slowed public transportation vehicles and contributed to the city’s smog problem. The new parking program is helping to alleviate that congestion.

The design of the program is fairly straightforward, making it an easy sell to the public. In fact, the city summed up its policy in one short sentence: “Simply stated, the primary goal…is to make it easy to find a parking space.” Prior to the program, San Francisco ensured that rates on street meters were the same all day, everyday, regardless of demand, which often led to drivers circling blocks in areas of high demand, while spots remained empty in other parts of town – sometimes as close as just a few blocks away.

Under the new program the city sets prices on a monthly basis for individual garages and city blocks. If the occupancy rate is between 80% to 100% then the hourly price is increased by 25 cents; if between 60% to 80% the hourly rate will remain the same; if between 30% to 60% the hourly rate will fall by 25 cents; and if between 0% to 30% the hourly rate will drop by 50 cents. The new program also extends or eliminates altogether many of the time restrictions previously put in place – under the assumption that long-term parkers will be incentivized to move to cheaper spots.

The program has also helped to de-politicize parking politics, ensuring that prices are set using transparent data, which is readily available to the public and computer developers so they can build innovative applications to help drivers find the cheapest spot. Demand, rather than politicians, is the new determinant in the price of parking.

While San Francisco was the first city to implement such a program, Auckland, New Zealand’s largest city, has since followed suit. In late 2012, the city’s policymakers implemented a program that largely resembles San Francisco’s.

What the dynamic parking policies do is try and overturn a top-down approach to handling parking, a method, coincidentally, that has been criticized for decades by economists that argued the one-size fits all pricing models for parking found in many cities failed to adequately allocate space. Too often prices were too low in some parts of the city and too high in others. Using the power of prices can allow policymakers to ensure that there is always an available space, yet the cost of that space for drivers will vary depending on the demand for it.

Toronto currently offers very little variation in the price for parking, which leads to a massively inefficient system where some drivers are paying too much, while others are not paying too little. Ensuring that the true price of a parking spot is presented to drivers is the first step to rectifying this problem.

Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI). You can reach Brady by email at: bradyyauch (at) 


1 thought on “Finally, parking spots at the right price

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