How Parking Fees Affect the Vacancy Rate of Curb Parking?

5.2 How Parking Fees Affect the Vacancy Rate of Curb Parking?

To observe the spatial distribution of the quantity demanded of curb parking, we plot the number of cars parked on curb spaces by five levels of quantile in Figure 5.7. Those traffic zones with the highest level of quantiles are concentrated in Neihu, Nangang, and Songshan districts. These areas happened to score the lowest level of peak-time parking occupancy as well (see Figure 5.8). As we have defined previously, low parking occupancy at peak time signifies an inefficient use of land. Those traffic zones in Neihu, Nangang, and Songshan districts, thus, exhibits the most severe waste of land.

Knowing that parking fees do affect the quantity demanded of curb parking, but do such fees also affect the parking occupancy and are able to improve the land use efficiency in these areas? This section probes into the effectiveness of on-street parking fees in reducing the parking vacancy. We change the dependent variable of the linear regression model to the vacancy rate of curb spaces because empty curb spaces are an inefficient use of land. A higher vacancy rate signifies the severity of inefficiency.

Table 5.4 shows the result of the revised regression model using the ordinal least square method. On the one hand, most estimated signs of parameters are in line with our expectation. For the total quantity supplied of parking, every extra parking space increases the vacancy rate by 0.004 percent significantly (see column 2). Meanwhile, one additional illegally-parked car reduces the vacancy rate by 0.076 percent. This result supports our previous inference that the illegal parking complements the demand which curb parking could not satisfy. The number of illegally-parked vehicles denotes

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Figure 5.7 Spatial Distribution of the Quantity Demanded of Curb Parking

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Figure 5.8 Spatial Distribution of Curb Parking Occupancy

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On the other hand, curb parking fees, however, has no significant impact on vacancy rate. We surmise that such insignificance is due to the inelastic demand for curb parking.

The log-linear regression model in the third column indicates that a percentage change in parking price reduces merely 0.3 percent of the number of cars parked on curb spaces.

The vacancy rate for on-street parking is insensitive to the change in parking fees.

Hence, for a monopolistic government, adjusting parking fees may work to increase the curb parking demand and maximize the parking revenue, but it can never work to optimize the land use efficiency.

In the first model, we though learned that the total quantity supplied of parking has a positive relationship with the vacancy rate of curb spaces, we fail to know whether this correlation arises from the on-street or off-street parking. Therefore, the fourth column presents a new regression model which replaces the total quantity supplied of parking by the quantity supplied of on-street parking and off-street parking separately.

Nevertheless, only the quantity supplied of on-street parking has significant impact on parking vacancy. One additional curb space provided increases the vacancy rate by 0.0487 percent. This outcome suggests that urban planners should reexamine the parking planning because a moderate reduction of on-street parking supply is how the government can cure the inefficient use of land radically.

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Table 5.4 Models of Vacancy Rate and the Price Elasticity of Curb Parking

Variable Vacancy Rate log(D_CURB) Vacancy Rate

(1) (2) (3)

P_RATE 0.000490 0.00111

(0.60) (1.38)

log(P_RATE) -0.297*

(-2.11)

S_ALL 0.0000410*** 0.000256***

(3.82) (4.95)

S_CURB 0.000487***

(4.78)

S_OFF 0.0000207

(1.66)

D_Illegal -0.000766* 0.0106*** -0.00105**

(-2.27) (7.23) (-3.29)

t statistics in parentheses: * p<0.05, ** p<0.01, *** p<0.001

* S_CURB: The quantity supplied of on-street parking

* S_OFF: The quantity supplied of off-street parking

* log(D_CURB): The logarithmic form of quantity demanded of on-street parking

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As we have mentioned at the beginning of chapter four, there is still a gap of 4,462 empty curb spaces to achieve the goal of putting every land into use. However, it is bizarre that the on-street parking demand is 2.31 times¹⁶ the parking supply at the same time. If the empty curb spaces are neither a problem of oversupply nor insufficient demand, what is the fundamental cause for such a gap?

In this chapter, we attempt to find out the answer from the price mechanism in two phases: the effect of curb parking fees in changing the quantity demanded of curb spaces and then the impact of which on decreasing the vacancy rate. In Taipei, there are two extremes of the parking situation on the street. We offer two strategies below and reason about how to iron out these extreme in the following paragraph.

1. Review the parking planning thoroughly and reduce the quantity supplied of curb spaces in moderation

2. Employ a more dynamic parking fee which reflects the drivers’ demand to reduce illegal parking

The first extreme is the overcrowding of forever empty curb spaces. This phenomenon exhibits in the newly developed districts such as Nangang and Neihu districts commonly. The majority of constructions in these areas are equipped with their off-street parking. The quantity demanded of curb spaces is far less than which of the number supplied. On-street parking rests as a waste of the land. For such extreme, we

16 Table 4.4 reports that the quantity demanded of on-street parking is 2.31 times (156,263 ÷ 67,677) more than the current quantity supplied.

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suggest the first strategy to reduce curb spaces provided in these districts. Dynamic pricing is inapplicable here as they may work to help the government maximize the profit but not improve the land use efficiency.

On the contrary, the second type of extreme is the overcrowding of illegal parking. We observe this traffic chaos widely in the old residential neighborhoods such as Datong district. Most of the old buildings in these areas lack attached parking garages. Thus, on-street parking is always fully-packed as residents have no other places to park cars.

In this situation, the inefficient use of land is not about holding empty curb spaces but is presented in the form of cruising and illegal parking. The greatest urgency at present is to create reasonable use of the land instead of sticking to the full occupancy rate. We, hence, propose the second strategy to price curb spaces dynamically. By performance parking-prices, urban planners may eliminate illegally-parked cars and then return the road for conveyance. In this way, the land achieves its efficient use by asserting the functional purposes.

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Curb parking is never a neglected topic in the transportation research, but rarely did we think of curb parking from a land use perspective. In the literature review, we point out that on-street parking is a monopolistic good and its parking revenue is a type of Marxian monopoly rent due to the exclusive use of land. We also argue that curb parking is a land use issue as it takes up a tremendous amount of land. A plausible solution proposed by Shoup is to charge the performance prices on curb parking.

This research attempts to lay out the land use problem of curb parking. We implement a descriptive study in chapter three and empirical analysis in chapter four and five to look for potential solutions. We discover four important results as follows.

1. Curb parking is an issue of land use efficiency

In chapter three, we set out a standard to analyze the land use efficiency of curb parking.

Because the parking peak is the time when the on-street parking reaches the highest occupancy rate, we employ the full parking occupancy at peak time as a measurement of land use efficiency. If parking occupancy is low at that point of time, a significant number of curb spaces remain vacant at all times. This phenomenon indicates an inefficient use and a waste of land.

2. Current curb parking in Taipei represents an inefficient use of land Putting land into curb parking is inefficient in that enormous amount of land remain vacant at all hours and it is an unwise investment, financially speaking. In years 2016