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Parking spaces as something which are rented, the smallest unit of land commonly used; analogy to Henry George's land tax. "Between 5 and 8 percent of urban land is devoted to curb parking."

(Edit for math error below)

Quoting George directly: "The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common uses."

Or Adam Smith: "Ground-rents are a still more proper subject of taxation than the rent of houses. A tax upon ground-rents would not raise the rents of hosues. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist and exacts the greatest rent which can be got for the use of his ground."

Milton Friedman: "In my opinion the least bad tax is the property tax on the unimproved value of land."

Richard Arnott and Joseph Stiglitz apparently showed "that under certain assumptions, total land rent in a city will equal the total expenditure on municipal public goods, to perhaps land rent really can finance local government." "Henry George Theorem"

Curb parking is as close as you can get to a common rent on unimproved land; parking lots are a close second. By contrast off-street parking requirements act like a tax on buildings. So cities with free or cheap curb + off-street minima are failing to collect land tax and imposing excessive property tax.

This gives me an idea: one way of estimating the value of raw land in a neighborhood might be the market-clearing price of curbside parking in it. High turnover and uniform nature means easy pricing, and it's easy to collect too, vs. assessing lots and worries about the impact of raised taxes. Curb parking is like a spot market in rental land.

Montgomery County in Maryland imposes an extra 0.28% on property tax, to finance public parking facilities; sites that meet the country parking requirements are exempt. The base tax rate is 0.741%, so the parking surtax is 27% of the total property tax, or raises the base rate by 38%. New and converting businesses prefer to pay the surtax than provide their own parking, telling us they find the parking requirement more onerous than higher taxes. Shoup then reminds us of Oakland introducing a one space per dwelling unit requirement, that reduced density and land values by about 33%.

And property taxes at least provide revenue; free parking skews transportation choices and adds to congestion and pollution.

Shoup argues curb parking matches Smith's four maxims for good taxation: fairness, transparency, convenience, and efficiency.

The average meter in Pasadena yields $1700 a year. Median owner-occupied housing property tax in the US was $1200, and many houses have two curb spaces in front; parking revenue might trump current property tax revenue. A curb space is about 160 square feet, so $1800/year ($5/day) would mean a land rent of $1.25/square foot, and be worth $36,000 per space at 5%, or $225/square foot, if sold.

[Edit: the text says $1.25, but by the math that's an error; $1800/160 = $11.25 per square foot per year land rent. $1800/0.05 OTOH does give $36,000 per space and $225/sqft.

Where I live, many meters could easily make $5 per *hour*.]

Manhattan parking spaces were selling for $40,000-80,000 in 2001, plus $100/month fees. Some Boston spaces on Beacon Hill sold for as high as $167,000, plus $163/month condo fee and $811/year tax. At 5% that's $30/day, yet Boston charges nothing for a curbside residential permit. Also there were 3933 resident permits for 983 curbside spaces... A Knightsbridge London space sold for $177,000 in 2000.

If nothing else, these numbers show that cities are walking away from large amounts of money by not charging market rates for curbside parking. Never mind efficiency, you'd think revenue greed would bring keen interest to this...

A parking lane is 8 feet wide; if the property lot goes back 160 feet from the curb, parking is 5% of the land. If the lot is 100 feet deep, parking is 8% of the land. A couple other estimates match that range.

Curbside parking should raise more revenue that parking lots -- besides being more convenient, it uses less space, 160 square feet compared to 330.
$1800/year means $90 per linear foot of parking space. Over a whole block, accounting for non-parking space, there might be $60 per linear foot, per year. That'd be a lot of money for maintenance and beautification. In LA, replacing sidewalk costs $10-20 per square foot, so one year could pay for a 6 foot wide sidewalk.

US cities in 1997 collected $1.43 per capita in net parking revenues.

Parking benefit districts could make voters think like landlords instead of like tenants.

He goes into a tangent on congestion tolls, economically rational yet politically difficult, as drivers see a cost and no one sees a clear benefit. By analogy to benefit districts, he suggests giving congestion revenue to the cities that roads pass through, recruiting them as lobbies. He also describes a shocking difference in per capita income between cities with freeways ($20,100) and those without ($35,000). Full range is from $8900 to $111,000. Rich cities resist having freeways go through them, so the scheme would compensate poorer areas for the freeways inflicted on them.

Parking meters in London are controlled by boroughs, not the Greater London Authority, and thus rates are unusually high, up to 4 pounds an hour in 2004. Westminster collects more in parking than in property taxes.

He suggests that sharing broadcast spectrum or grazing lands revenue with states would create new constituencies for better pricing, as legislators could take credit for "bringing money home". "Efficiency requires a special interest."

Parking increment finance. Cities sometimes give local agencies the increase in property tax revenue that comes from improvements. Similarly, cities reluctant to give up existing parking revenue might give benefit districts additional parking revenue, rather than reallocating what's already collected. City doesn't lose, while local interests know they'll get the new charges.

There's a section on how shifting private consumption to public improvements can have a huge increase in local jobs and wages, as consumption is often spent on imports, while sidewalk repair needs local labor. Part of the consumption reduced would be for cars and oil, which together were 26% of 2001 imports.

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Damien Sullivan

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