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San Francisco‚??s Experimental Market-Based Parking Pricing Program

City officials pursue urban congestion relief

Harris Kenny
April 12, 2011

San Francisco is on the verge of implementing an innovative experimental market-based parking pricing program. The program, SFpark, has been in development by the San Francisco Municipal Transportation Agency (SFMTA)  for over four years and is set to launch in eight pilot areas on April 21, as reported by San Francisco Chronicle.

Through SFpark, SFMTA seeks to reduce urban congestion by using a market-based parking pricing system to ensure at least one parking spot is available on each street (in participating pilot areas) at all times. The agency estimates that driver circling (driving in circles waiting for available parking space) causes one third of San Francisco’s urban congestion. For a quick summary of the program, see the following promotional video:

SFpark Overview from SFpark on Vimeo.

In order to achieve effective market-based parking prices, SFMTA had to install three specific technological infrastructure improvements:

Beyond technology infrastructure improvements, SFMTA notably decided to extend parking meter time limits, the agency explains:

The SFpark pilot will emphasize the use of demand-responsive pricing to achieve parking availability goals, so short time limits may not be necessary or desirable. Easing time limit restrictions makes parking more convenient for drivers, but it does not mean that everyone will park longer. Extended time limits simply allow some people to park longer if they want to.

With the technology infrastructure in place, SFMTA is able to move forward in implementing the pricing system. Parking space prices will change no more frequently than once a month and by increments of no more than 50 cents up or down. Further, all SFpark meters will display current hourly rates and hours of enforcement. SFpark is specifically seeking availability of around 20%, so if parking is over capacity in an area then meter prices will rise; similarly if parking is under capacity in an area then meter prices will fall. The current meter price range is between 25 cents and 6 dollars an hour, though this is subject to change during special events such as sporting events, concerts, etc.

It is unclear what impact SFpark will have on SFMTA’s overall revenue. The agency anticipates the program will marginally raise parking meter revenue, however, they also expect decreased parking ticket revenue. Further, assuming higher parking prices cause drivers to consider public transportation, SFMTA will generate revenue through increased public transportation ridership. Nathaniel Ford, SFMTA executive director, told San Francisco Chronicle, “This isn’t about pricing to raise revenue. This is about getting drivers off the street quicker.”

SFpark appears to be very promising, however there are several issues that may limit the experimental program’s success in reducing San Francisco’s urban congestion. By only using eight pilot areas, SFMTA is taking a gradual approach that excludes most destinations within the city, meaning many drivers’ behavior will not be impacted. It is also difficult to know what impact private parking garages may have in reducing the program’s efficacy, since private parking garage prices do not seem to be included in SFpark’s Data Feed. And lastly, SFMTA has severely restricted its ability to raise or lower prices in a dynamic way, meaning it will take a significant amount of time to equilibrate parking prices with demand.

San Francisco isn’t the only city exploring alternative approaches to urban parking. Several cities have taken another approach by implementing long-term concession public-private partnership (PPP) agreements whereby the city transfers management of city-owned parking capacity to a private operator. Cities like Chicago and Indianapolis have benefitted from this long-term concession PPP approach, and are leveraging private capital and expertise to revamp urban parking and generate additional revenue to support other important public services. (For more, see my colleague Leonard Gilroy’s work on this topic here, here, here, here and here.)

Reason Foundation has long discussed the ramifications of congestion through the Galvin Mobility Project, and by reducing congestion the following benefits would be realized:

It will take several years before the impact of alternative urban parking approaches is realized. In the meantime, visit Reason Foundation’s Transportation Blog and Galvin Mobility Project for the latest research on urban congestion, ground transportation and individual mobility.

Harris Kenny is a policy analyst at Reason Foundation

Harris Kenny is Policy Analyst

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