Raising the question of “how are we going to fund the CBD Rail Tunnel?” got me thinking about whether there could be some other ways of raising more money for transport projects. In particular, ways in which the future Super City council could raise money to pay its share of the project (which I am guessing would be construction of the stations). One potentially useful way of raising funds for transport projects could be a Parking Tax/Levy like the one operated in Sydney.
Basically, the way it works is that in order to raise money for transportation projects while also discouraging people from driving to areas easily accessible by public transportation, the New South Wales government charges the owner of properties containing off-street parking a certain amount each year – like an additional rate I suppose. For Sydney’s scheme (there’s also one in Perth), this is detailed further below:
Todd Littman, from the Victoria Transport Policy Institute, has done quite a bit of analysis of different types of parking levies, and how they can be made most effective. In the paragraph below, he outlines clearly what the benefits of applying a parking levy are likely to be:
I think it makes a huge amount of sense to tax parking in this manner. If you think about it, in a place like the CBD a parking space is quite valuable – with spaces worth up to $50,000 in Auckland for example. So a developer might choose, instead of building apartments, offices and retail spaces, which add vibrancy and significant economic benefits to a CBD, to instead build a parking building. And then, once all this additional parking is available we end up with more people driving, more congestion in our city centres, more pollution and our investment in public transportation being undermined. The developer gets all the benefits of a profitable development, while the city is left to pick up the bill for all the adverse effects generated by encouraging all those vehicles into the city centre. It would seem logical to put in place a financial mechanism to counteract the current situation.
Interestingly, Littman’s analysis shows that ‘all Parking Levies are not created equal’. In particular, there’s a clear distinction to be made between taxing parking transactions, and taxing the parking spaces themselves. When parking transactions are taxed, that means that where you currently pay for parking, your cost might be lumped with an extra $5 as a tax. So instead of paying $13 a day for your earlybird parking, you end up paying $18. In theory this is supposed to discourage people from driving into the city, but the problem is that it has the effect of making workers more likely to demand free spaces from their employers – or in other words, making parking spaces a more valued commodity. Littman goes into this a bit further:
So that’s probably not the path for us to go down. The last thing we really want to be encouraging is higher parking subsidies and more sprawl.
The other option, which is known as a “Per Space Levy”, is basically what Sydney does, as I outlined above. Rather than having only ‘priced parking’ taxed, we see all parking spaces (with some exceptions) being taxed. This discourages the provision of any type of parking within the area you designate (most likely the CBD). It might also make more ‘unpriced parking’ (such as that offered by employers to employees as part of their salary package) into ‘priced parking’, which would remove hidden subsidies for car drivers and result in greater efficiencies. Littman briefly describes how this scheme has been implemented in Sydney and Perth:
The difference in Sydney’s prices between what Littman states and what the NSW website states (outlined earlier in this post) is because Sydney have recently dramatically increased their parking levies.
Overall, Littman has some suggestions about what would be “best practice” ways in which to implement a parking tax/levy:
Now to me it would seem as though implementing a parking levy that can raise money to help pay for critical transportation improvements, helps reduce hidden subsidies that encourage people to drive (such as the provision of a parking space as part of one’s salary package), reduces the number of parking spaces in the city centre and therefore the number of cars that will drive to it and discourages situations where our prime waterfront real estate is getting turned into parking buildings must be a good thing. Of course I can see a couple of potential issues:
- Aucklanders seem to hate to pay for parking. A proposal by the city council to extend the paid hours of parking from 6pm to 10pm was met with massive resistance, and eventually had to be quietly dropped – even though its benefits were pretty obvious (to stop people who owned apartments from hogging all the parking spaces).
- It might hurt the CBD and encourage businesses to locate elsewhere.
I think that the key to overcoming these problems would be to closely link the parking levy with the introduction of a hugely significant improvement to public transportation – such as the CBD Rail Tunnel. I would think that the transport benefits to the CBD of that project would far outweigh the fact that companies will need to either pay a bit more to retain their off-street parking spaces, or get rid of them. And in terms of public acceptance, if people saw what an amazing piece of rail infrastructure they were getting, then I think they would come around to it pretty quickly.
Overall, I think the benefits of a levy outweigh the costs quite considerably. At the moment Auckland’s CBD suffers terribly from there being far too many cars trying to squeeze their way into it, out of it and through it. A levy that can discourage people from driving to the city, while also raising funds for critical projects like the CBD Rail Tunnel surely has to be a good thing.
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Funny thing about the Sydney PSL was that it was introduced while there was a Coalition (ie tory Liberal/National parties) administration in NSW so there’s hope for us yet. Auckland’s multi-storey (and ground level) car parks are one of the city’s urban design disgraces and, I suspect, will be the one of the reasons why schemes such as the Fort Street shared space proposal will, ultimately, fail: just look at the number of multi-storey car parks that now define the streetscape.
Council could set an example by demolishing and redeveloping its own parking buildings into apartments or offices.
+1 to that suggestion.
The ACC has 5 parking garages in the CBD, all but the one under Aotea Square should be redeveloped under a CCO similar to Sea and City and minimum parking requirements banished..!
Cant say I agree, not with the state of public transport at the moment anyway. The money has to come from somewhere I know but I would view this policy as a penalty due to no fault of my own. It’s unreasonable to suggest motorists pay more for parking because AK/NZ leaders failed to get their act together sooner, they’ve only had a decade or two.
It should certainly start being applied to new stock coming online. It is ridiculous that Cooper and Co can build a 5 level carparking building on the waterfront, undermining Britomrt next door and yet making the money for themselves. Council needs to start regulating these spaces. Indeed whilst ACC’s garages make them a lot of money and I’d prefer they had it rather than a private company, a better start to demolishing them would be to funnel all revenue from these garages into PT. The council also needs to look at banning any new parking spaces. Some cities in Switzerland have rules that any new parking spaces built have to be balanced by the removal of spaces elsewhere. Interestingly these cities are the only cities in Switzerand that continually see growth in PT use compared with stagnated growth in areas with no such planning rules.
Of course you would not slap on a $2000 levy per space immediately. I would start it off really low, and perhaps firstly applying to new stock only. However, the plan would be that over time the levy would increase (perhaps by 5% a year). A steadily growing source of income could help Auckland Transport pay back its CBD rail stations loan.
And if this scheme was linked with the CBD rail tunnel then PT would have been dramatically improved.
Not that I live in Auckland of course, but to apply such a tax to surburban malls could also long term be a possibility. The popularity of such is driven at least in part by their free parking.
Outside the CBD I think we could achieve a lot by simply not forcing people to provide so much parking (ie. get rid of minimum parking requirements). It’s fairly likely that the amount of parking required would decrease quite significantly by simply letting developers decide how much parking to provide.
By having minimum parking requirements we are putting across the message that “the more parking the better”, which is simply wrong.