Demand-Based Street Parking Coming

The City of Milwaukee is poised to drastically change its metered parking policy in a move that will net the revenue-constrained city at least $2 million annually. It should also lead to cheaper parking in low-demand areas, and higher rates for in-demand spaces — and make it a little easier to find a parking space.

The Common Council has already approved new meters and the city has begun installing them. Now, the Department of Public Works, which administers the city’s 7,076 metered spaces, is recommending a three-tier change to the city’s approach to metered parking.

The first step is to increase the three hourly base rates from $0.50, $1.00 and $1.50 to $0.75, $1.25 and $2.00. That change alone will net the city $1.9 million annually based on 2016 data says a DPW report.

The rate increase will be coupled with a subtle change the will extend the amount of time the standard metered rates are enforced. DPW Parking Services Manager Thomas Woznick told the Common Council’s Public Safety and Health Committee that the city will expand the Monday-through-Friday window of 8 a.m to 6 p.m. by three hours, enforcing the meters until 9:00 p.m.

The final tier in the plan, and the one that could produce the greatest public benefit, is to implement “demand-responsive pricing,” which Woznick described to the committee as a way to properly price meters during large events, like Milwaukee Bucks games at the Fiserv Forum. The city intends to increase parking rates during periods of high demand on metered spaces within a five-minute walk of the attraction. Under the proposal, rates would be capped at $5 per hour. The ordinance allows for flat rates during events to range from $5 to $50.

But while “demand-responsive pricing” could simply be interpreted as a way to collect more money from drivers, the strategy as described by DPW and a national parking expert should actually result in some drivers paying less for parking.

What is the right price for parking? UCLA professor Donald Shoup has written the seminal book on the matter. In the “High Cost of Free Parking” Shoup explains that street parking should be ideally priced to create an 85 percent occupancy rate, otherwise, a tragedy of the commons occurs, with people circling the block endlessly creating congestion and businesses losing customers because of perceived difficulties in getting to them.

At the 85 percent rate, at least one available space could be found on every block and the scarce resource, road space, would be maximizing revenue that could then be invested in the community. Shoup suggests that rates can vary by time of day, day of the week and block by block. When there are too many cars, the price goes up, when too few, the price goes down to as low as zero.

The practice has been adopted most prominently in San Francisco, which uses an 80 percent standard and adjusts prices on a per-block basis. Prices can change up to three times a day. Additionally, cities like New York, Los Angeles, Seattle and Washington D.C. have instituted some portion of Shoup’s methodology.

Milwaukee is now poised to join the fray. The new meters will allow the city to collect what it describes as “real-time data” and adjust the parking prices.

A report produced by DPW details the proposed dynamic rates.

• When average occupancy is between 80‐100 percent, the hourly rate will be increased by $0.25
• When average occupancy is between 60‐80 percent, the hourly rate will not be changed
• When average occupancy is between 30‐60 percent, the hourly rate will be lowered by $0.25
• When average occupancy is less than 30 percent, the hourly rate may be further reduced by $0.25  increments or lifted entirely

These figures can be adjusted over time. The report states: “Adjustment of rates would be designated at a frequency, such as quarterly, semi‐annual and/or event basis to help achieve the target occupancy rate of 60‐80% within a defined area and/or price range.” The ordinance does not specify an interval.

The city collects approximately $5 million in meter revenue annually.

The department’s proposal received unanimous approval from the Public Safety and Health Committee Thursday morning. It will next go before the full Common Council.

Why Parking Revenue Matters for Milwaukee

Beyond making it easier to find a place to park, the increased revenue also solves another looming issue for the city.

The Hop, Milwaukee’s soon-to-launch streetcar system, is planned to use parking revenues to help fund its operations. The increased revenues to the fund will not only pay for the streetcar and the $3.5 million cost of the new meters, but will also allow the city to continue to use the $47 million parking fund to support other city operations.

The 2018 budget includes the city transferring $17.1 million of parking-related revenues to the general fund, a practice that dates back decades and is now critical for the revenue-constrained city.

Revenue comes not just from meters and city-owned garages and lots, but towing ($4 million), permits ($4.6 million) and citations ($16 million). Operations and maintenance are budgeted at $27.2 million for 2018.

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