Should Parking Be Free in Muscatine?

(Note: this is a popular lesson plan that I posted in 2008; you can find it here).

Students find that lunch is cheaper if they buy the “meal” instead of the entrée. So students add a half pint of milk and a side to their tray. When most are finished eating, there’s still food left on their trays. So by the end of the lunch time, you’ll see students drawing in ketchup, throwing fries, pushing a straw through an uneaten hamburger, and pouring chocolate milk out on the table. The food is excellent. Why do students waste it? Because the food is free and it is over consumed. In other words, after the food satisfies the student’s hunger, the food finds alternate uses to bring satisfaction such as being used in a food fight or modern art.

Whenever something is given away free, there’s a tendency for it to be over consumed.

What would happen if parking becomes free in the downtown area? It’ll be over consumed. The free parking will provide alternate uses and exert a cost on others.
If parking becomes free in the downtown, you’ll find that patrons will park longer than before. You will find that you can’t find a place to park downtown. You’ll find the downtown more congested. You’ll find that there will be unintended consequences exerted on people who are neither a buyer nor seller parking in downtown. Let me elaborate.

Say you want to go to the grocery store to buy a week’s worth of food. How do you find a parking place? I’ve noticed that most people try to park as close to the entrance as possible. This has many advantages. You can get into and out of the store quicker. You have to carry you groceries less distance which might be beneficial if you buy ice cream in August. I have also noticed that parking near the entrance of the store is harder to find and the traffic is heavier around the front door. What I observe is people first looking for a parking place near the door then they circle around the parking lot to looking for the next closest place to park. Sometimes, parking is the hardest part of shopping. Some people will give up and come back later. Parking around the front entrance of the store is free. Yet these coveted places are the first ones taken.

Why would free parking in the downtown be any different?

Dr. David Hakes, professor of economics at the University of Northern Iowa, “Waiting for a parking place increases as the price of parking goes down. The true cost of parking isn’t measured in the price. It’s the driving around looking for one and the walking to the place of business.”

Griffin Hahn, a future student at the University of Florida says, “The parking is free at the university. A license to park is really a license to hunt for a place to park. That’s why most students ride bikes to class or take the bus.”

I think free parking will, pardon the pun, “drive” people away from the downtown because they will not be able to find a place to park and the parking spots they find will be too far away. In the Undercover Economist, Tim Harford explains that most city dwellers would not walk 1,500 feet to save about 50 cents on an item.

Instead of free parking, I propose a parking plan that makes parking very expensive during the peak business hours and relatively cheap or free when businesses are closed. My plan would call for parking meters to be installed that accept a card that automatically debits the amount of the parking fee to the penny for the time used. Thus, if Maggie wants to rent a tux at K and D Clothiers Maggie can park in front of the store, swipe her card in the meter, run into K & D. If the transaction takes 5 minutes, Maggie gets charged ten cents. Under the current method, Maggie would put 25 cents into the meter and linger in the store until the meter expires.

The city council should put peak pricing into effect in the downtown. Peak pricing will provide parking places to those who value them the most at the time they need them without imposing huge transaction costs. And when I come home from work, I won’t park in ACE Hardware parking lot and take a space away from a paying customer.