Public Comment

I have a PhD in economics from the University of Chicago (received it at a time when the department was under the control of Milton Friedman). I didn’t enjoy my time at Chicago, but I did come away with an appreciation for prices, markets, and individual behavior in relation to them as well as an understanding of how to evaluate policies in terms of costs and benefits. I taught economics and environmental policy at Cal for 25 years and I’m very familiar with the strengths and weaknesses of cost benefit analysis. The cost benefit framework is helpful in identifying key questions that need to be addressed if we are to make rational use of our resources. Some costs and some benefits are hard to quantify, but in the case of this proposed paid parking project, most of these impacts can at least be identified, if not fully quantified. Unfortunately, the city did not conduct such an analysis, so it is not surprising it is getting so much pushback from the neighborhood. Had it conducted such an analysis, I’m convinced it wouldn’t have pursued this pilot project in this setting. 

The current parking system is built on free parking for anyone who doesn’t remain more than 2 hours. For residents with an A sticker, parking costs about $60 per year. In theory, free parking for non-residents can be extended indefinitely, if the individual is willing to move his/her car every two hours. In theory, when two hours is up, you must find a new location somewhere else in the neighborhood to avoid getting a costly ticket. The intention behind the two-hour limit originated in our neighborhood’s frustration with Alta Bates’ employees who, prior to the residential parking program, monopolized our streets, forcing many of us to park blocks away from our homes. Our neighborhood proposed the very first residential preferential parking system (hence the A designation on our stickers) in the early 1980s. Since then, residential parking has been extended throughout the city. If you hate it or love it, you can thank our neighborhood and its efforts to protect itself from the hospital. 

The two-hour limit didn’t initially stop many of these employees from moving their cars a few feet (or wiping off the chalk from their tires) every two hours. We’d see troupes of employees in their scrubs as they wiped and moved cars a few feet every two years. Subsequently, the neighborhood convinced Alta Bates to subsidize a sophisticated parking enforcement system, now familiar to all, in which license numbers are tracked by roving patrol cars. It’s no longer a matter of wiping off chalk. One really must move the car to a new location to avoid a ticket. To its credit, the hospital created a series of off-site parking areas and a shuttle system to encourage their employees to stay out of the neighborhood. Still, some continue to play the two-hour shuffle with this system, but parking has become more available for residents and a kind of uneasy truce with the hospital prevails. 

Employees of local stores who drive to work also take advantage of free two-hour parking. They also play the two-hour shuffle to keep from getting tickets, though this means taking time away from the job at least three times a day, which may not please the boss, but it is free. The two-hour shuffle is the justification the city has used to initiate the proposed pay for parking pilot program. It argues that starting up a cold car causes significant amounts of greenhouse gas, and by allowing individuals to legally park for longer periods by paying a parking fee, these cold starts will be minimized, and greenhouse gas emissions will be reduced. 

If this system of paid parking is implemented, the cost of parking to everyone who doesn’t have an A permit will rise. If there are other nearby areas that don’t impose this parking fee, then some of the people parking here may move away, but I assume most will stay and pay. That means the cost of coming to our neighborhood will rise for shoppers as well as local employees. How many are put off by the higher costs is obviously a matter of contention. For some, the proposed low cost of parking for up to 4 hours for a dollar an hour will be a welcome improvement over their current situation. This is particularly true for Alta Bates employees who now drive to satellite lots and take a shuttle to the hospital rather than doing the two-hour shuffle and risking parking fines. For these people, the safety of being able to park legally, at a modest cost, will be an inducement to park on our streets rather than in the far-off lots. Maybe others who now take public transportation will switch to a car, which is certainly more convenient. Moreover, with a little effort, employees could lower the proposed $14 fee for an 8 hour stay, by paying $4 for four hours and then moving and paying $4 for another 4 hours. (I suppose it might be possible to thwart this behavior by restricting an individual car to one pass a day, but that too could have unwanted side effects). In short, this program will open the gates for many new cars parking in our neighborhood. We’ll be back to the conditions of the 1970s. 

Commuters are another potential group that might find paid parking in the neighborhood a bargain compared to parking fees elsewhere who would be more than happy to pay $14 for the certainty of not getting a ticket. These could be commuters who now park at much higher cost in various parking lots around the south side of downtown Berkeley. It’s less than a mile to campus from here. It only takes 20 minutes to walk. It wouldn’t take many individuals parking on our streets to have a dramatic impact on our parking capacity. The same goes for all the people who now park while they visit doctors’ offices. Many already take advantage of our free two hour parking, but many others park in the various parking structures which have much higher rates that those being proposed in the pilot program. Again, it doesn’t take many individuals deciding to park and pay during their doctor’s visit or visit to see patients at Alta Bates to negatively impact our parking capacity. And finally, what about football traffic which now stays out of the neighborhood and pays very high prices to park closer to the stadium? They already fill up Claremont canyon, which has free parking. They would certainly find a fee of $4 for four hours a grand bargain. 

Employees at many of the College Ave establishments, the intended beneficiaries of this pilot parking program, who have been parking for free and doing the two-hour shuffle, will, assuming they pay for 4 hours twice a day, experience a reduction in their weekly wages by the new cost of parking (assuming the merchants don’t reimburse them). If they are making $15/hr, and they have to pay a minimum of $8 per day (or as high as $14 if they opt for the full 8 hour rate) for parking, their effective income will be reduced by between 7% and 12% depending on whether they pay $8 or $14 per day. If employers reimburse for parking, they will experience, in turn, an increase in the costs of doing business here. This could be a significant additional cost if they have several employees, and they would likely try to get the added costs back from their employees by lowering future wage increases. I wonder if the owners of these businesses who have supported the pilot program have really thought through the sequence that might well make it harder for them to find employees or increase their business costs. A targeted program of travel subsidies to offset public transportation costs of getting to work, or parking permits to specific employees who have no other option but to drive to work, would benefit these businesses considerably more than the paid parking program. 

From the perspective of the overall parking capacity in the neighborhood, the increased cost to employees of local businesses might discourage some from driving their cars to work. It probably won’t increase the number of cars trying the park by these employees. I don’t see these employees as the kind of threat posed by Alta Bates employees. They are already parking here, and we have adequate capacity to absorb them. 

For other people who park in the neighborhood, particularly shoppers, most don’t need more than 2 hours, so increasing the cost, even by a modest amount, won’t be welcomed, though I don’t think it will drive many shoppers away. The only groups that might benefit are theater goers and possibly some who have three martini lunches extending over two hours. They would likely prefer the certainty of knowing they won’t get a ticket for overstaying the two-hour limit. 

The people who will be most disadvantaged by this program include the tradespeople who work on our houses, the carpenters, electricians, plumbers who now park for free. The housecleaners, gardeners, caregivers and babysitters will now have to pay as well. While the costs of the new parking fees will be low for those with short stays, the $14 fee for 8 hours will significantly increase the cost to construction crews and anyone else parking here for the day. These new costs will get built into the hourly rates we pay our helpers, so even if they actually pay the fees outright, the people living in the neighborhood will end up paying for these new parking fees. All of us have occasional visitors drop in for short or longer visits and these visits will now be subject to the new parking fees as well. 

I have no idea how much additional cost to local residents we are talking about, but I would guess that spread out over a year, including every household, we are talking hundreds of thousands of dollars. I’m sure the city could make this calculation; perhaps it has. 

In sum, it is virtually impossible to structure paid parking to solve the problem of employees of College Avenue doing the two-hour shuffle without also encouraging many others to take advantage of the program, while at the same time imposing uncompensated costs on those who live here. I suppose the city could try and exclude Alta Bates employees from using paid parking, but that would require a byzantine effort to track each employee and his/her license plates and instructing the computer system to lock them out. This would probably constitute an illegal invasion of privacy and would be prohibitively expensive. Thus, the implementation of paid residential parking will result in significant reductions in parking space availability for residents, for everyone serving the residences, and for shoppers and employees of local business. Did the business owners who supported this program consider that shoppers and employees may well be discouraged because they won’t be able to find parking at all, paid or unpaid? 

“Induced” parking could probably be discouraged if the city is willing to impose dramatically higher parking fees, making it too expensive to park legally in the neighborhood for extended periods in comparison to existing options. But much higher fees would discourage shoppers and hurt all the other groups I mentioned above. The costs to residents would thus also dramatically increase. The employees now doing the two-hour shuffle couldn’t afford to park at all, which would make finding employees much harder for local businesses. 

Economists frame policy decisions around costs and benefits. The discussion above is about costs (I didn’t even mention the costs of implementing the program, which involves installing parking kiosks, new signage, greater enforcement, none of which are cheap). The framers of the pilot project have not discussed these costs or even acknowledged them. My discussion is mainly in theoretic terms – looking at incentives and behavior. It would be possible to quantify these various impacts, had a true benefit cost analysis been conducted. I don’t have the resources to undertake such an analysis, but from my general analysis, there appear to be no real benefits to those living here, or to the employees of local businesses, or to the businesses themselves. 

The only real beneficiaries would be those induced to park here by lower parking costs. The city doesn’t want to acknowledge this induced effect because it undermines the rationale it offers for the program in the first place – namely that there would be significant reductions in greenhouse gas emissions resulting from fewer cold starts as the “two-hour” shuffle is eliminated by paid extended parking options. Induced parking means greater demand, and many more drivers circulating through the neighborhood looking for fewer available spaces. The additional circulation will certainly increase, not decrease greenhouse gas emissions. There is no logical reason to think that greenhouse emissions will be lower with paid parking. The city pretends there will be no induced additional parking, thus it hasn’t even tried to quantify this likely outcome.  

Forgetting the induced parking impact, and accepting at face value the city’s claim that paid parking will eliminate the two-hour shuffle and a significant number of “cold starts”, is there any evidence in the city’s analysis of the program that suggests this reduction will be significant enough to even be measurable? And, even if there were shown to be measurable reductions, does this justify the program imposing significant costs on the neighborhood. That is, are the supposed benefits even remotely commensurate with the costs. I think the city hasn’t even tried to answer this question. 

The federal government pays farmers $40 per ton of carbon they sequester in their soil though various conservation techniques – that is, the government believes that the social value of a ton of carbon is $40. Most serious environmentalists would argue social cost of a ton of carbon is much higher. Does anyone seriously think that eliminating a few cold starts would generate reductions in carbon dioxide totaling in the tons? If the pilot program costs several hundred thousand dollars to implement and maintain, and individuals living in the area experience significant additional expenses from parking fees, then for this program to have benefits greater than costs, the reduction in emissions would have to total in the thousands of tons. When we also consider that the program could actually increase emissions from the impact of induced additional parking and the subsequent struggle for parking spaces, it boggles the mind that anyone could imagine that paid parking will help the climate crisis, let alone be cost effective. 

I’m a strong environmentalist and believe that climate change represents a catastrophic threat to our existence. But when it comes to reducing greenhouse gas emissions, we must be smart and create effective incentives. Paying employees not to drive to work, for example, would eliminate the issue of the two-hour shuffle. I’m certain there are many other choices that could achieve the desired reduction in greenhouse gas without imposing unwanted costs of this magnitude. 

There is one clear beneficiary of this program. I have no idea how many hundreds of thousands of dollars will be generated in parking fees, but it will be much larger than the costs of expanding parking enforcement (if they even do expand parking enforcement). So, Berkeley stands to gain a substantial new source of revenue. This doesn’t seem to be explained in the justification for the program, but in the interests of transparency, I would assume someone in the City’s administration has made calculations they should be willing to share with the neighborhood. Is any of this added revenue going to be used to offset the negative costs this program will impose on the residents of the neighborhood? I don’t think so, but it would be nice to know, and should be part of the consideration of the overall impact of the program, its full costs and benefits. 

Is this a case of the camel getting its nose under the tent? Is the city simply setting out to make all residential parking a new source of revenue? The Resident parking permits already generates revenue, but maybe the city sees an opportunity to increase revenue using the new technologies for paid parking fee collection and enforcement. If we can’t convince the city to abandon this pilot program, I would modestly suggest it should compensate residents who will lose the ability to park near their homes and who will in one way or another pay for the additional costs of those who visit them or work for them. Make it an annual payment of $500 per residence. Obviously, the city would object, but such a demand would force the city to acknowledge the damage it going to inflict on us. 

In sum, we don’t have a congestion problem; we don’t need congestion pricing to solve an issue that involves employees of local businesses that haven’t been willing to invest in additional employee parking. The simple solution is to ask the businesses to provide incentives for employees not to drive to work, or to require that they provide permits for those who have no other choice but to drive. What would happen if Walmart or Macy’s decided to ask all the homeowners living around their stores to give up their parking spaces for the sake of the employees and customers? No one would find that reasonable. Why should Berkeley be different?