The High Cost of Free Parking

After writing this I was asked how much money is in the Parking In-Lieu fund. The answer is $172,713 as of 6/30/2019 (I doubt it’s changed much since then). That represents only about 17 parking spaces at the current fee rate.

The San Mateo Daily Journal ran an article today (2/1/2020) about a proposed increase in the fee charged businesses who need to provide parking but opt not to build it themselves. The staff proposal will be reviewed by the Planning Commission before it, or something sparked by the Commission’s discussion, comes before the Council.

The article raises a number of interesting issues.

Not all retail businesses coming to San Carlos need to provide parking for their customers. We allow small businesses — I believe those occupying less than 1,500 square feet of floor space — to rely on the general pool of public parking that the community allows. This includes not only on-street parking but also the public parking lots, such as the one at Wheeler Plaza.

All other retail businesses must provide parking for customers. That generally has to be on-site but some property owners have rights to count some number of parking spaces in the Wheeler Garage as meeting the requirement (that’s the result of financial contributions made long-ago by the relevant property owners).

However, the city does allow businesses to make a cash payment to the city, which can only be used to create public parking, instead of actually building the spaces themselves.

At first glance that seems bizarre. The city has never built new parking spaces with the in-lieu fees in parallel with the arrival of each new business. For one thing that would be horribly inefficient and expensive. Even if spaces are eventually built there would be a period of time when motorists would be forced to compete for an inadequate number of parking spaces. Why would the community create such a situation?

The primary reason is that the community may be concerned that requiring each business to build its own parking spaces might cause businesses to not want to be in San Carlos. Which could have a negative impact on the overall community quality of life if it resulted in a deserted or unattractive downtown. The balance being managed here is maintaining or enhancing the downtown experience against creating or aggravating motorist (and pedestrian) frustration.

But there’s a bigger problem lurking behind the in-lieu fees which complicates managing that balance. If you don’t charge a fee great enough to build new parking spaces so far as I can see one of three things has to happen:

  • The additional needed parking never gets built because there isn’t enough money to do so and motorist frustration lasts forever, getting worse as more retail businesses come to town.
  • The city dips into its general funds — the money that pays for virtually all city services other than sewers — to augment the in-lieu fees so you have enough money to build the needed parking . This involves reducing the quality of life somewhere else — less well-maintained parks, poorer service at city hall, weaker law or fire protection, etc. — in order to provide parking and reduce motorist frustration.
  • The voters approve a special tax to supplement the in-lieu fees so the needed parking can be built.

Note that there are three important assumptions limiting us to those three options:

  • Retail businesses, of all kinds, continue to grow in San Carlos. If enough older businesses close sufficient parking capacity could be freed up to cover the demand created by new businesses coming to town. Despite the pressure some kinds of retail are under from the web I think continued growth is still the way to bet.
  • Motorized vehicles continue to be the predominant way in which people visit our downtown. Despite the growing use of alternative modes of transportation (e.g., walking, biking) I think that’s a safe bet, at least for the next decade.
  • The cost of creating parking doesn’t drop significantly in the future. I think that’s a reasonable bet, too.

Historically San Carlos has followed the first option and not created new parking. Other than the expansion of the Wheeler Garage — which added about 50 or 60 new spaces to what the old Wheeler lot provided — I don’t recall the city building new public parking since I moved here in 1997 (if you know of some examples please let me know).

And remember: the Wheeler parking expansion only happened because the community sold the old parking lot to a developer at a nominal price in exchange for granting the developer the right to construct the Wheeler condo/retail complex and a commitment that they create those 50 or 60 new spaces. The additional parking cost us, just not in cash.

My concern with staff’s recommendation to increase the in-lieu fee, but not to what it actually costs to create new parking, is that it’s just going to make a deteriorating situation worse. I don’t want a dead downtown. But I don’t want an insanely frustrating one for motorists and pedestrians, either. I think the staff proposal pushes an already-somewhat-out-of-balance situation even more off-kilter.

There is no such thing as free parking; someone always pays for it. If it’s not the driver pulling into the space it’s the business he or she is visiting or the community that wants a healthy and vibrant downtown for its residents. The challenge is to figure out how to allocate the cost of providing parking in a way that best serves the community’s interests.

5 thoughts on “The High Cost of Free Parking”

  1. If the city has been collecting restricted use in-lieu fees for years but never built additional parking, what is the current balance of the parking in-lieu fund? I’d love to see a multi-story parking structure just off of Laurel like the Marshall St Parking Garage in downtown Redwood City or the multiple parking structures along Bryant St. adjacent to the Castro corridor in Mountain View. Maybe along the El Camino between Olive and Cherry behind Union Bank, The Reading Bug and Pranzi?

    1. No new parking garages and no metered parking. Please. We just opened up a parking garage at Wheeler Plaza. Is that what we want to become, a city of concrete high-rises to store vehicles? San Carlos has a lot more charm than Redwood City or San Mateo with their metered parking and their big ugly garages.

  2. Mark Olbert

    That’s a great question, Tom, and one I should’ve researched earlier.

    Turns out the Parking In-Lieu fund only has $172,713 in it as of 6/30/2019. Which, I’m sorry to say, isn’t enough to build much of any kind of parking structure. So any such would have to involve commitment of general reserves or some kind of tax-financed bond measure.

  3. Jason Gische

    Is there a particular reason that parking in downtown continues to be free? Redwood City and San Mateo both have thriving downtowns (both much bigger than San Carlos) and they both have metered parking. It doesn’t seem to be hurting businesses in those cities. Perhaps keep the distant lots (like the one near the train tracks south of downtown) free to drive cost-conscious people to use those locations more. You could use the proceeds from metered parking to pay for the construction of a garage like mentioned in the earlier comment.

  4. Mark Olbert

    Hi Jason,

    The community expectation, which goes back many years if not decades, is that parking should be free to the driver. Council members occasionally joke, privately, about how a good way to get recalled is to propose anything akin to parking meters :).

    Expectations are subject to change, of course. But this one is so deep-rooted I suspect the Council would wait to see an organized, broadly-supported community-based effort urging the change before it would be willing to take it up. That’s just my opinion, though. As always I encourage you to reach out to Council members directly about this.

    The other issue to consider is that charging for parking shifts the balance to people willing to pay for parking. I’m not raising that as a social justice issue although conceptually it is that, too. The current San Carlos model requires people to share the parking capacity — in terms of both spaces >>and<< time -- regardless of their ability or willingness to pay. I suspect there would be some community resistance to charging for parking on this front, too. But it'd be unlikely to undermine the viability of a downtown, as your examples of other cities show. Thanx for taking the time to share your idea.

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