Best planning and implementation toolbox


Purpose of Tool:
Parking “pricing” is a concept that establishes the real costs of providing parking and passes that price onto the user – most

Parking rates are posted outside a garage in New York City.
often a single-occupancy vehicle driver - which often encourages the use of available public transportation. In some situations, usually in urban centers or at institutional facilities, visitors who drive must pay a fee for the “privilege” of parking (ie. entrance into a parking lot or garage, quarters into a street meter, etc). In most situations, however, motorists have come to expect free unlimited parking. Even in situations where drivers must pay to park, they are not often paying the full price for the provision of that parking spot. By restructuring the cost of parking to better capture the true costs of driving and parking, consumers may be “pushed” by the market to find an alternative to single-occupancy vehicle trips, resulting in reduced traffic and congestion. Parking pricing can be implemented as a transportation demand management strategy to discourage driving and reduce congestion, as a parking management strategy to reduce parking demand in a particular location, to cover the cost of parking facility construction and maintenance, or to raise revenue for another municipal purpose. Research indicates that drivers park for free for 99 percent of the automobile trips made in the U.S.1 Parking pricing seeks to reassign some of the high cost of parking to the direct parking beneficiary: the motorist.

Benefits of Using Tool:
Parking pricing is designed to assign the true cost of a parking space to the motorist. By instituting a parking pricing program in a specific area, the following benefits for a community or region at large can be observed:

Parking rates at J&R Music Store in New York City; parking is free with an in-store purchase of $100 or more.

  • Encourages the use of alternate transit modes for non-essential car trips, such as biking or walking,
  • Reduces car trips, which lessens traffic congestion and decreases the generation of pollutants such as smog, CO2 and other green house gas (GHG) emissions, and
  • Raises funds from parking fees that can be used to pay for transit, street or neighborhood improvements.

    Steps Involved to Use Tool:
    Parking pricing programs can be implemented by local governments or individual businesses as part of a parking management strategy. Considerations for use include the following:
  • Parking pricing should be addressed in the context of an up-to-date area-wide parking management plan, which coordinates parking supply, rate structure, collection and enforcement.
  • Minimum parking requirements for new and existing developments should be reevaluated, so as to not “over-supply” parking.
  • The most convenient on-street parking spaces in commercial areas should encourage drivers to park for limited amounts of time by setting higher parking fees.
  • To address congestion in areas with viable quality transit options, rates for parking should be set higher during peak periods of demand. Studies indicate that up to 74 percent of urban traffic congestion is caused by vehicles ‘cruising’ for on-street parking, and motorists spend an average of 3.5 to 13.9 minutes finding a curb parking space.2

    Special Requirements to Use Tool:
    A variety of targeted marketing efforts and incentives can increase the public’s knowledge of transit alternatives and incentives for their use, such as supplying commuter benefits for transit and offering employee parking cash-out programs. Such marketing efforts and the availability of incentives should reduce driver opposition to priced parking programs. To increase revenues, parking prices should be determined based on when and where parking is demanded, rather than raising rates across the board at existing priced facilities. This implementation method is considered to more efficient and equitable and usually raises more total revenue.3 Additionally, parking prices should be set to equal or exceed local transit fares. For example, daily parking rates should be set greater than or equal to a roundtrip transit fare, and monthly rates at least equal to a monthly transit pass. This way a direct cost comparison is possible for single-occupancy drivers that may wish to switch to transit.

    Specials Resources Needed to Use Tool:
    Typically, parking pricing programs are run by a department of a local municipal government, but many of the goals of partner or supporting organizations - such as developers, businesses, transit agencies, and community groups - are met through the program. Greater collaboration between these entities can be achieved through the adoption of supportive policies, such as reduced minimum parking requirements, expanded transit alternatives, and equitable distribution of collected parking revenue, will assist in successfully implementing effective parking pricing in most areas.

    Communities / Agencies that Have Used Tool:
    In July of 2005 the City of Austin, Texas approved the Parking Benefit District Pilot Program to address neighborhood concerns of spillover parking. Spillover parking occurs in residential neighborhoods near areas with a limited parking supply, such as retail corridors, educational facilities and park-and-ride centers. To manage the spillover in the West Campus District, parking meters were installed on all the available on-street parking, with demand-sensitive pay stations on the periphery of the neighborhood. The parking fees collected in the West Campus District (the balance of the meter revenue less City expenses for maintenance and enforcement), are applied towards improvements in the neighborhood that promote walking, cycling and transit use - such as sidewalks, curb ramps, and bicycle lanes. To ensure that the District was started in a neighborhood supportive of the program, interested neighborhoods in Austin had to apply for participation in this popular parking pricing program.4

    Austin City Connection - Neighborhood Planning & Zoning Department
    P.O. Box 1088
    Austin, TX 78767
    Phone: (512) 974-2856

    Metrics to Use to Monitor Tool Effectiveness:
    Parking pricing research suggests that parking pricing programs can effectively decrease the number of single-occupancy vehicle trips. It has been observed that 42 percent of commuters drive when the driver pays for parking, as opposed to the 67 percent that drive when the employer pays for parking.5 It has also been demonstrated that with the introduction of parking pricing (independent of the employer), the choice of transport changes dramatically. In Downtown Los Angeles, it was observed that when parking was provided for free, 70 percent of commuters drove and 15 percent of commuters took transit and 15 percent carpooled. However, when parking prices increased to $5 per day, the transportation modes chosen by commuters changed: the percent of solo drivers decreased to 45 percent, and the use of other modes such as carpooling (18 percent) and transit (37 percent) increased.6

    The left panel shows a typical commercial block in the Westwood neighborhood of Los Angeles where curb parking is under-priced and all the curb spaces are occupied. The block has eight curb spaces on each side, the average cruising time to find a curb space is 3.3 minutes, and two cruisers are circling the block. In contrast, the right panel shows what happens if a city charges the lowest price that will produce a few vacant spaces. Drivers have no reason to cruise because they can always find a vacant curb space near their destination, search time is zero, and cruising cars do not add to traffic congestion.

    Donald Shoup, Cruising for Parking, Access, Number 30, Spring 2007, page 19. Online:

    List of Resources to Obtain Additional Info:
    See the following sources for more information:
  • Donald Shoup, Cruising for Parking, Access, Number 30, Spring 2007 Online:
  • Donald Shoup, The High Cost of Free Parking, APA Planners Press, 2005. PDF of summary presentation online:
  • Victoria Transport Policy Institute, Parking Pricing, Online Travel Demand Management (TDM) Encyclopedia. Online:


    1 Donald Shoup, The High Cost of Free Parking, Presentation to Yale University, Online:

    2 Donald Shoup, Cruising for Parking, Access, Number 30, Spring 2007, page 17. Online:
    3 Victoria Transport Policy Institute, Online TDM Encyclopedia, online:

    4 Austin City Connection, Parking Benefit District, online:

    5 Shoup, online:

    6 Shoup, online: