Will parking rates skyrocket if the City successfully leases its publicly owned garages and lots over to a private operator? Several members of the Pittsburgh intelligentsia seem to be convinced this is the case. Officials of the Downtown Partnership feel that there will be an "impact on the affordability of parking Downtown" and this will make "the City even less attractive to developers, shoppers, businesses, etc." The Mayor even played prognosticator back last January when he first announced his idea to lease the garages in order to fund pensions: he noted that "I’ve got to protect pensioners. I’ve got to protect City taxpayers. And of course I’d like to protect parkers too, but not at the expense of City taxpayers and pensioners". And therein lies a clear indicator of the City’s real problem, i.e., shift blame and cost to someone who cannot vote you out of office.
The implication seems to be that putting parking in private hands with the market determining rates that operators are simply going to gouge people who park.
But the big problem in Pittsburgh is that there is a mismatch between the supply of parking and the demand for it. This mismatch existed as far back as 2002 when we studied Downtown parking. And what has been happening to parking demand and supply in recent years? The building of three new sports venues, convention center, residential, retail, cultural and new office buildings over the last decade or so has increased parking demand in Downtown and near-Downtown with relatively few new parking spaces being provided. This desire to have people come into the City has forced existing firms to ration the spaces to an increasing number of users by employing the basic market tool-pricing.
The other big problem is the parking tax, a tax that further jacks up the price of parking in the City. The true irony here is that the civic leaders who are now expressing concern about the price of parking in Downtown Pittsburgh did nothing to push City officials to lower the tax dramatically over the last few years, especially since the state legislation in 2004 that mandated a lowering of the parking tax from 50% to 37.5% merely spelled out the maximum rate the tax could be set.
The same City officials who realized the inelastic nature of parking demand and boosted the tax to 50 % in order to increase City revenues substantially now rail against operators who dare to be motivated by profits and a reasonable return on investment. How hypocritical. How typically Pittsburgh.
