Street parking in DC is way too cheap

ParkingOpinionBy Joshua Peacock (Guest Contributor) August 7, 2023

A car parked over the line on a DC street by Mike Maguire licensed under Creative Commons.

Land in Washington, DC, is extremely valuable, and — duh — parking spaces take up land. The wild thing is that the District leans on taxpayers to cover the cost.

This post takes a look at just how much the District is subsidizing car storage for the 65% of DC residents who own cars and the commuters who come in every day, and considers the true cost of parking.

How much parking do we have?

The most recent totals for parking spaces come from the District Department of Transportation (DDOT)’s assessment in moveDC, the District’s multimodal long-range transportation plan. Released in December 2021, moveDC reported that DC had 150,000 Residential Parking Permit (RPP) spaces, 20,000 metered spaces and 230,000 other spaces. (When I asked DDOT what “other spaces” meant, they told me that they are “spaces that are not in the listed categories, including four-hour parking spots, school drop-off zones, residential spots that are not RPP, and unpaid, no time restricted spots.”)

Charging only token amounts for extremely valuable land creates an incentive for residents and commuters to drive their personal vehicles into the city and store them, using DC’s land in ways that make the streets less affordable, less welcoming, and more congested.

Residential permit parking and the Civil War

Because it is the single largest allocation of District government-provided parking (and often the most contentious), let’s take a look at RPP and what it costs.

With 150,000 RPP spaces around the city, and a one-year RPP parking fee of $50 for the first vehicle, DC brings in $7,500,000 in revenue every year if every spot is taken by a first-permitted car.

But is that all that can be charged? It’s hard to know what a parking space is really worth if its price is capped. Would someone be willing, for example, to pay $500 to park downtown? Would they pay the same price to park in Mt. Pleasant as they would in Benning Ridge?

A good proxy for the “real” market value of a parking space is to look at how much it costs to build one, along with what the District is charging elsewhere in the city.

Building a surface parking space in DC costs roughly $82 per square foot. Since DDOT requires curbside parking be 7’ in width and the average car is a little under 15’ long, that brings the construction costs for just a single surface space to approximately $8,600!

At the current charge of $50/year for a residential parking permit, it would take 172 years to cover the cost of constructing that space.

Put another way: for the cost of building a parking spot to be paid off in 2023, it would have to have been built before the Civil War.

Is that the only way to estimate the cost of a residential parking spot?

Any businessperson can tell you, though, that price is more than just the cost of materials and labor. When looking at the “real” price of parking, there are a few different values that we can look at, starting with how much the District is currently charging for non-RPP parking.

The 20,000 metered parking spaces in DC are some of the most valued parking spots around, and DDOT currently charges $2.30 an hour on a weekday to park in each one. If the city charged that rate ($2.30 x 24 hours x 260 weekdays a year) to park in residential spots rather than the current $50/year permit, it would come out to $14,352 per space per year, and the total revenue from all RPP spots (assuming they were all put to use) would total $2,152,800,000, – yes, that’s more than two billion dollars – (or more than $3,000 per person in DC).

Charging like a meter is a useful benchmark, but mandating a particular price still fails to assess how much people are willing to pay for parking. That, and meters are used for limited, time-constrained parking in the most in-demand spots while RPP spots are used year-round in residential neighborhoods.

You are paying more than $500 a year for other people’s parking spaces

To determine an approximate “optimal” cost, we can look at the private parking market around the city. This gives us a solid idea of how much residents are paying to store their cars, and what the city could feasibly earn for its parking spaces.

There are two different private parking cost averages around the city. First, according to WhereIPark, the average daily cost of a parking spot in DC is $19, or $6,935 each year if the car is parked every day. People who know where they need to park, however, will not need to buy by the day, so let’s consider monthly parking.

A single month of parking in DC averages around $270, or $3,240 annually, according to DCParking. While the cost varies depending on location, an average at least gives us an idea of how much the District could bring in. A lot of monthly parking spots, however, are within a covered garage, making them much more valuable than street parking. But even the current monthly outdoor lot parking costs average far more than $50/year. Using SpotHero, the average outdoor parking space is $225/month, which totals to approximately $2,700 annually!

The difference between $2,700 for private parking and $50 for a year of parking in a residential public spot is huge. That means DC taxpayers are subsidizing 150,000 RPP spaces throughout the city to the tune of up to $558 per resident (all 712,000 of us in the 2020 census), per year. This massive, invisible subsidy that taxpayers shell out to car owners so they can store their cars on public property incentivizes people to buy and use cars. Charging closer to the market rate would encourage people to get rid of cars and use other forms of transportation.

What could DC do with the money it’s not making on parking?

If the District were to actually charge that $2,700 figure for each of its 150,000 residential parking spaces, it would bring in an additional $397,500,000 in revenue. That’s a considerable amount of money that could fund a large number of social services, increase safety programs, and fully fund housing services like vouchers or rental subsidies to combat homelessness.

Here are a few examples of what $397,500,000 can do:

Where do we go from here?

The subsidy that DC taxpayers provide to car owners is only half of the question. What do we do with this information?

While it’s true that RPP holders are paying far less than the true value of the parking spots they use, a sudden increase in price would be a massive shock to car owners and produce a huge backlash – and would be a blunt response to an issue that has some nuances given disparities in transit access in different parts of the District among other factors.

One option is for the District to instead begin by recognizing that taxpayers are subsidizing parking and reward those who do not use an RPP. A household that does not meet a 1:1 adult to car ratio could get a payout of the annual individual subsidy that they would have received through parking. There is already evidence that a parking buyout works to reduce car usage, and DC already has a similar law on the books for private employers. Considering that lower-income households are less likely to own cars, this would work as a cash infusion to people who likely need the money.

Another option might be to change the RPP cost not based on the private market, but rather on the size and weight of the car. This would encourage drivers to purchase smaller, economy-sized cars and increase costs for those who decide to buy super-sized SUVs and pickups. Since RPP does not have a 1:1 parking space per car, each vehicle uses up a specific amount of space and takes it from the parking available on the side of the road. A Hyundai Accent subcompact car is only 14’ long, while an F-350 is a whopping 22’ long. Since the Accent takes up only ⅔ the space of an F-350, they should only pay ⅔ of what the F-350 would.. By charging RPP based on vehicle size rather than just whether someone is parking their first or second car, we can require drivers who need a lot of space to park to pay for it.

These are just two possible options that the District can use to more equitably distribute the real cost of parking. These are only scratching the surface.

There is never such a thing as free parking. Whether you own a car or not, your tax dollars are providing cheap and plentiful subsidized parking around the District.