The DC USA project in Columbia Heights will open this spring, bringing a Target and many other national chains to DC (many for their first store in DC) in 600,000 square feet of retail along with 1,300 new apartments. It will also bring traffic. There are two main ways to deal with this: provide more parking spaces, and/or use parking management techniques to encourage as many people to take Metro or the bus as possible. Certainly some people will need to drive to Target if they are buying a desk, but perhaps not if they are buying a pair of jeans.

DC has chosen to mostly go with the former strategy with a bit of the latter. The DC government spent $42 million to build a 1,000 space garage. Parkers will pay $1 per hour for the first 4 hours, with a much higher price after that to discourage people from parking there to take the Metro to work. In other words, each space cost $42,000 to build. Is that worth it? Let’s do the math.

Stanford’s cost per space for maintenance was $33 per month according to Jason Schrieber of Nelson\Nygaard. DC’s would probably be greater due to the urban nature of the garage and the greater turnover, but let’s assume it’s $33/mo, which is $396/year. Continuing to use Scheieber’s Stanford numbers, assume a 40-year lifespan on the garage before substantial capital repairs are needed, which means the $42,000 initial cost comes out to $1,050 per year. Finally, DC probably issued bonds to pay for this garage, so they are paying interest. The latest info I could find online suggests that DC bonds most recently have a 4.75% coupon, so borrowing $42,000 will cost DC $1,995 per year in interest. All together, each parking space is costing the taxpayers of DC $3,441 per year, or $3.4 million per year all together.

This garage is worthwhile from a pure economic standpoint if it brings in $3,441 per year per space in revenue. Let’s assume that on the weekends (about 100 days in the year), the garage is 100% full for 10 hours per day. That’s $1,000 per year in revenue. That means that on each weekday, each space would need to be occupied for 9.21 hours. I doubt it; the garage might be half full for most of the day, maybe more in the evenings. So let’s say that each space only pulls in 5 hours of revenue per day. Then each space would earn $2325 per year, for a loss of $1116. In other words, the DC government is subsidizing this garage to the tune of about $11 million per year.

DC will get tax revenue, of course. According to the Development Corporation of Columbia Heights, the project was estimated to bring in $12 million per year in tax revenue. That would pay for the garage, but it’s not the only cost—there will be more street cleaning needed, more transit service, and so on. Of course, there will also be more jobs, and perhaps an improvement in the standard of living for people, as well as an increase in property values (though that creates an affordable housing problem). I’m also not sure if the $12 million figure includes these longer-term economic growth factors.

But this is all getting to be pretty intricate and unless you are an economist or an economic development consultant your eyes may be glazing over. Back to parking: whether you argue it’s good or bad, we are subsidizing parking in this development. Councilmember Graham claimed that the stores would not have located here without the garage. If true, perhaps the subsidy is helpful. Perhaps the garage will be very full most of the time and rates will go up, bringing in more parking revenue.

Or, perhaps the existence of this huge garage will draw people to drive who would not have needed to drive, who could have carried their shopping home on the Metro, in which case we are just encouraging driving at the expense of transit, reducing demand and making it harder to add transit service in the future. Without a lot more complex analysis, it’s hard to answer this question for sure.

David Alpert is Founder and President of Greater Greater Washington and Executive Director of DC Sustainable Transportation (DCST). He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He lives with his wife and two children in Dupont Circle. Unless otherwise noted, opinions in his GGWash posts are his and not the official views of GGWash or DCST.