Tuesday, July 1, 2014


Australian cities have some of the highest carparking costs in the world. Why? Can anything be done about it? And what might happen if it gets any worse?

It’s hard to fathom but the cost of parking a car for a day or even a couple of hours can apparently cost you more in an Australian CBD than downtown Manhattan, or London, or Paris. The latter are  global centres of commerce, with populations that dwarf that of Australian cities. New York City’s 8.4 million residents are the almost the equivalent of our three major capitals - combined. Ditto London, with its 8.4 million residents or Paris with 10.5 million residents.

Manhattan Island alone has 1.6 million residents, plus it adds another 1.6 million commuters, every day, swelling daily to over 3 million people. By comparison, the City of Sydney (the CBD plus surrounds) is roughly equivalent in area to Manhattan Island but home to only around 190,000 residents and a daily influx of workers and students of around 450,000. Yet it can cost more to park in Sydney, or even smaller cousin Brisbane (under 200,000 employees in the inner city), than Manhattan. 


On the supply side, there has been a history of anti-car planning culture in many Australian cities for some time. Sydney was the first to impose a parking tax on CBD car spaces, in a bid to force up the price of parking and divert people to public transport. It forced up the price alright, with a number of subsequent increases in the tax over the years (the tax is now around $2000 per car space), but it made no real impact on public transit. 

Here’s an example of the thinking from then NSW Transport Minister David Campbell back in 2009: 

"The parking space levy is all about encouraging people to leave their car at home, and take public transport," he said. 

In the same story, it took someone from the Nature Conservation Council (the irony is delicious) to point out the bleeding obvious:

“I don't think it will have too much of an impact on congestion… Any increase in parking levies probably isn't going to make too much of a difference to the people who can afford it right now, what it will make a difference with I suppose is the people who really don't have any other options and are currently driving in."

Incredibly - and idiotically - the South Australian Government is trying the same thing with Adelaide, where a $750 per annum parking tax takes effect this July. You’d think they’d be desperate to bring any economic life they could find into Adelaide, but evidently if that economy arrives in a car, they don’t want it. Great place Adelaide. All it needs is an economy to go with it.

The punitive policy stance on CBD parking visits itself in other forms too. Restrictions on building new CBD parking spaces has had the effect of limiting supply as the cities grew. New multi-deck parking stations could alleviate the supply-side problem, and there seem to be enough sites suited to them in most cities, but the policy stance doesn’t support them. New commercial towers are also limited in terms of the numbers of additional basement spaces they can deliver into the pool, in a bid to limit the supply of additional parking. 

This public policy view is connected to deeply held faith (and the operative word is ‘faith’ because there’s little evidence to support the view) that by pricing or policing private vehicles out of Australian CBDs, the same people would be forced to use public transport, and we’d all be better for it. “We just need to get the cars out of the city” is the sort of view you’ll hear often on talk back radio (particularly the ABC; sorry Aunty but your listeners have been drinking way too much Kool-Aid). 

The problem is simple: if you take the cars out of the city, you’ll take the people too. And then the businesses will follow. 

Bear in mind is that parking is not just about commuters. CBDs and inner cities are places for business to interact with other businesses, and with government. They also interact with customers, clients and suppliers. They have restaurants and retail shops that rely not just on the CBD worker but also visitors to the CBD, for the retail dollar. Many of these people invariably rely on the private vehicle to get there. Casual parking costs – at up to $55 for a couple of hours – have long passed the point where they’re a deterrent: they’re a real disincentive to visit the CBD for casual business meetings. Permanent parkers with paid company spaces won’t notice this. But they may begin to wonder at the number of meeting requests for out-of-centre meetings, where the parking cost isn’t ten times the cost of the coffee. 

If the intent is to ‘punish’ the private vehicle in the belief that this will encourage higher rates of public transit patronage, the irony is that the consequence could see more businesses relocate to outside city centres, where parking regimes are more favourable and occupancy costs lower. If that happens, the numbers of office workers for whom train and bus services are a convenient option will actually fall – because public transport options in non-central locations are notoriously difficult to service and often require mode or route changes for a single trip. 

Centralised employment is what works for public transport so it ought to be in the interests of public transport advocates to support more CBD employment and more widely available parking (both in supply and pricing) than to argue for punitive agenda-based policy positions which may deter businesses from city centres. In short, if you succeed in chasing cars out of the inner city, you may also chase business out and end up with more private vehicle transit for work journeys than if they had stayed in the CBD.

The reality too is that public transport will only go so far. In Australian cities, the highest patronage of public transport by CBD workers is by people who live close to the city in the first place. Travel beyond a 5 klm or 10 klm ring and the mode share by public transport drops quickly to below 10% (see here for an excellent analysis). 

The reason is that – contrary to popular opinion – only around 10% to 15% of metro wide jobs are in the CBD and inner city. If you have a CBD job, you tend to earn more, and will want to live closer to your work. Ironically, this makes you also more likely to take advantage of very generous taxpayer subsidies for your train or bus fare to work, than the suburban worker who gets no such subsidy for commuting by private car to their lower paid job in a suburban location. And because most employment is distributed throughout suburban locations of our metropolitan areas, these are always going to be more suited to private vehicles than public transport. 

To get our public transport usage up to even half the rate of somewhere like New York – where 55% of commuters use public transport - we would need to see employment concentration in our CBDs quadruple to 40% of metro wide jobs while suburban employment didn’t grow at all. 

Hardly even a remote possibility. 

On the demand side, we seem to have a capacity to pay when it comes to parking that is allowing operators to charge what they do. However expensive the spaces may be, they do seem consistently full. Arguably, for many there is little choice. There is also little competition, with only a couple of operators seemingly controlling the market. But it is fair to question whether the exorbitant rates now being charged – especially for short term parking – won’t in time begin to change behaviour. If that behaviour begins to lead an exodus of activity to non-central locations, prices should fall as demand weakens. But that may create other, larger problems as suggested above.

So how should we deal with congestion and parking policy and public transport? 

There is no easy answer here but I’d suggest that reliance on proven failures like parking taxes or similar pricing policies in the Australian context is not a good option. It might be helpful instead to get a solid grasp on all the factors driving the high cost of parking – including oligopoly pricing by a small handful of operators. 

We also need to understand clearly the benefits of city parking before treating it like a disease and trying to eradicate it, or the patient will suffer. And we also need to be very clear on what alternatives exist and the genuine likelihood and extent to which public transport can replace the private vehicle, given our urban scale and the nature of our urban economies.