Adjusting the price of parking based on demand has many benefits, a Chinatown study shows

As on-street parking becomes more coveted, cities are looking for ways to better manage those spaces. In January 2019, the District Department of Transportation (DDOT) published a final report from its year-long Penn Quarter/Chinatown Parking Pricing Pilot program. The results indicate that pricing parking according to demand can be successfully used not only to manage supply, but also to reduce congestion, improve safety, and encourage people to use other forms of transportation.

What is pricing, and how does it work for parking?

In the transportation and city planning world, “pricing” is the process by which an entity sets a price for a certain activity, in this case parking, with the goal of better managing the activity or regulating its impacts. Usually the local government sets the price, but a private property owner or business, a residential co-op or homeowners association, a Business Improvement District, or someone else might also do it.

Parking is ideally suited to pricing: there are a limited number of parking spaces, and high demand reduces the likelihood someone willingly leaves their parking space. Low vehicle turnover may not seem particularly bad, but no available parking leads to more driving and emissions when people circle the block looking for spaces. It also leads to illegal behaviors like double parking, parking on the sidewalk, or blocking fire hydrants, which can be dangerous for other road users.

Proper pricing makes parking for longer periods of time more expensive, which in turn makes it more likely that people leave the space more quickly. While some drivers may resent having to pay to park, the other people driving around looking for a parking space, as well as business owners waiting for their next customer, prefer regular turnover.

The goal for pricing parking is to set the price at a point where there will always be at least one available spot on each block. Cost is an effective lever to manage an activity, as drivers can easily make their own judgement about the value of parking in an area for a given amount of time.

The challenge is to find the right price. If parking is too inexpensive it doesn’t address the issue, and people will remain parked longer than necessary. If it is too expensive, there are fears that drivers may not visit an area at all. Unfortunately, the demand for parking is fluid. Locations, times of day, and days of the week all influence that demand, which in turn influences how much people value parking.

DDOT’s Park DC Penn Quarter/Chinatown pilot

In an effort to address some of the negative impacts associated with underpriced parking, DDOT set out a pilot study to use demand-based pricing for on-street parking spaces in the Penn Quarter/Chinatown neighborhoods. Demand-based pricing means the cost of the space will change, based on the demand that exists at that time.

The key goals of the project were to:

1. Reduce time to find an available parking space
2. Reduce congestion and pollution, improve safety, and encourage use of other modes
3. Develop parking management solutions through a cost-effective asset-lite approach

DDOT’s pilot project used a variety of technologies, include parking sensors, different types of cameras, manual counts, and payment and citation data to study the demand for parking within the study area between 3rd and 11th streets NW and E and H streets NW.

Between October 2016 and November 2017, DDOT changed the price for on-street parking based on how high the demand was for each of the blocks in the study area. People trying to park could see the different prices in the ParkDC mobile app.

A higher demand resulted in a higher per-hour price for a parking spot, and lower demand resulted in a lower per-hour price. DDOT changed the prices every three months following the same approach. The base price for parking for every block in the study area was $2.30/hr, by the end of the study the prices ranged from $1/hr to $5.50/hr.

In addition to changing the price of the parking space by location, the prices were also changed for different times of day, meaning parking mid-day during the week costs more than parking early on the weekend. The study also extended the length of time a vehicle could be parked in areas in less demand, which encouraged more use in those areas.

What effect did pricing have in Penn Quarter/Chinatown?

The pricing pilot achieved its goals! Parking availability increased on high-demand blocks, and underutilized areas were used more often. People reported that the time spent looking for parking in the study area dropped from 18 to 12 minutes. Finding parking became easier because it became easier to know the price of parking in different locations. DDOT indicated in the study that better signage would make this even more effective.

The pilot also resulted in less illegal double parking and less congestion caused by people circling for parking. Importantly, the study indicated that the changes to parking prices did not negatively impact nearby businesses, suggesting that fears of higher parking prices hurting local businesses may be exaggerated. Lastly, DDOT was able to use a variety of technologies to monitor parking demand, so it doesn't have to purchase costly individual sensors for every parking space to make this method work.

In short, this study shows that demand-based pricing for on-street parking is an effective tool to better manage parking and improve surface transportation. DDOT plans to continue to use the demand-based pricing for the pilot area, and incrementally expand it to other parts of the city. It also plans to establish consistent time limits and pricing periods District-wide.