Minneapolis city parking: Let’s run it like a business


When the price of gasoline spikes due to worldwide fluctuations in supply and demand, few people call it extortion, and certainly no conservatives. It’s just the way markets work to distribute scarce goods peacefully and efficiently.

But when governments try to harness market forces to optimize delivery of public services, practically everyone complains, especially conservatives who generally want the public sector to operate “more like a business.” This contradiction is strikingly evident in the municipal provision of parking spaces.

In lefty-loosy San Francisco, cries of “money grab” erupted last year when The City installed 7,000 new parking meters designed to adjust hourly rates based on demand. This is a market-based pricing strategy shown to decrease street congestion and wasted time and fuel from motorists cruising for unoccupied curb spaces. It works similarly to the priced high-occupancy toll (HOT) lanes on Twin Cities freeways that smooth traffic flows in both the managed and regular lanes.

What happened in the City by the Bay? In the year and a half since the new meters were installed, their average hourly rates dropped about 5 percent. Some even offered lower prices than The City’s 22,000 older meters. What’s more, the new meters’ multiple payment options helped slash parking citations by more than half. Most of the lost fine revenue was made up with more money from meters, but it still left a $1.1 million hole in the parking agency’s $830 million budget.

Minnesota’s biggest city, Minneapolis, operates 27,000 paid parking spaces in ramps, lots and curbside with a total asset value of $162.3 million. The city runs a persistent net loss on these assets, which boast a total current value of $158 million. But both revenues and spending are trending down and projected to keep going that way.

The city has replaced most of its 7,000 parking meters with new ones that have increased revenue while reducing costs and vehicle impounding, according to its 2013 budget. But the city projects a deficit in its parking fund within a few years.

In response, the city projects an off-street parking rate increase for 2013 of no more than 0.05 percent. That’s 1 cent on a $20 parking charge, hardly a price signal likely to change anybody’s behavior or do much to shore up the parking fund. Cities shouldn’t subsidize the private benefit of parking private vehicles. Operating parking like a business promises the best results for public budgets and economic vitality.