Free Parking

From [RiotACT]( I found this [web page calling for action on parking](

>The purpose of this website is to channel our frustration with the parking situation into change. Let’s stop whinging to our co-workers and tell someone who has to care – the Government. What we propose is not unreasonable, but the recommendations are designed to fix an unreasonable system.

Specifically, the site mentions or complains about:

>Excessive and unfair fines

>Limits and No Parking zones

>It’s not “just $70”.

The first big problem I have with the site is that it talks about a set of recommendations they want to make to Government, without ever showing these anywhere. I’m not keen on signing a petition without any details of what I’m signing.

But, more broadly, what’s the problem here, and how will the things they seem to be proposing help?

The main complaint is about lack of parking. Now most non-economists probably think this is just a supply issue. But economic tells us that there are two halves to every market: supply *and* demand. If there aren’t enough spaces to park in, then that’s a result of supply being greater than demand.

The simplest answer is to build more carparks, but there are a couple of arguments against that. Firstly, it’s not always easy to build the carpark near where people want to go. Think about the CBD of any city: where would you put the extra car parks? Cars take up a lot of space, especially the 4WD behemoths. Secondly (and reluctantly), maybe it’s not the greatest idea in the world to encourage more people to drive everywhere. There are congestion and environmental arguments in favour of rationing car parking.

If increasing supply isn’t the answer, then you can address demand. The simplest way to reduce demand for parking is to charge more for it. Anyone from Sydney or Melbourne knows how cheap Canberra parking is, even in Civic.

Fair Parking Canberra notes the government *is* building more sites, but calls for a few things. Firstly, different fines depending on how long you’ve overstayed your parking. Secondly, change some existing no parking zones and one hour zones into four hour zones (presumably so you can go move your car at lunchtime…). And thirdly, lower prices for parking and parking fines.

So what will these do?

What about making some one hour spaces into four hour spaces? (I’m going to ignore the stupid idea of getting rid of no parking areas. Those lines are normally drawn with regard to public safety or access) Think about a one hour space. In a normal day, 8 cars can park there. Change it to a four hour space, and only 2 can. Even if you argue that the majority of people are looking for 8 hours worth, so long as there are substantial numbers of people who don’t you’ve just reduced the supply of parking. Good for people who get there early, terrible for everyone else. Bad, bad idea.

What about changing the fines? A little bit of law and economics will come in handy here. Say you park illegally, how much do you expect to pay?

>E(F) = p * F

WHere p is the probability of being caught, and F is the fine. In order to ensure people follow the law, we need to make:

E(F) > L

Where L is the price of legal parking. The fine is $70, and the probability of being caught appears to be around 1 in 7 (based on the experience of people around work who accidentally stay in a 2-hour space too long). So the expected fine is about $10. Probably enough to discourage people from parking illegally.

But if we lower the fine, then more people are going to park illegally. We’ve effectively reduced the ‘price’ of overstaying in a parking spot. Which means that the supply of available parking is going to shrink.

And what about charging based on how long you’ve overstayed? Well, firstly you can’t do that for any of the free car spots, because you never know how long you’ve been there. The way the parking inspectors work, they often can’t tell if you’ve overstayed one minute, or four hours. So this only works for pay-and-display car parks (as pay-on-exit obviously doesn’t apply). It’s not a terrible idea in that context, but the extra complexity (both legal and administrative) would make it hard to implement.

‘Fixing’ parking isn’t hard. Charge more for it. People won’t like it, especially those who would prefer to always park for free (the subtext I read into the Fair Parking site). But it will fix the problem.

By way of disclaimer, I should note that my workplace has free parking. And I hate it! It’s impossible to get a park after around 9:30am, which makes it very hard to sleep in, or to run out for an errand during the day. I really wish that we could introduce pay parking, because it would reduce the demand.