|Toronto Parking Economics|
I just read an article that makes me question the value of the Toronto Parking Authority.
An article in the Toronto Star tells us that, in North America, Toronto ranks 20th, and 10th, for the cost of daily and monthly parking, respectively.
Here's a quote from the article:
[Maurice Anderson, president of the Toronto Parking Authority] said Toronto's monthly rates are so expensive because his agency, a department within the City of Toronto, offers very few monthly passes for sale, leaving that market to private operators.
However, Toronto's daily rate is relatively low, he said, because the parking authority -- the city's largest provider of parking spots, with 160 municipal lots containing about 20,000 spaces -- tries to keep short-term rates low "to make it affordable for someone to come down and shop for two or three hours."
The way I read this, I take it that the TPA is subsidizing parking rates in order to help businesses downtown. But, I don't know if they're acheiving their goal. Consider this:
- The article makes the point that there is a crunch on parking downtown, and that open-to-the-public parking is being reduced by construction on vacant lots
- The cost of building new parking (supposedly $45,000 per space) isn't enough to justify building more
- By subsidizing parking, the TPA is lowering the going price for parking spaces
- Simple economics tells us that if the price of parking was higher, there would probably be a greater supply. I.e., more spaces on the market
- Therefore, the net effect of the TPA's policy, is to reduce the number of parking spaces downtown, and therefore the number of cars parked downtown on any given day. This would seem more likely to hurt businesses than to help them.
It seems to me that if the TPA raised its rates, there'd be more parking downtown and more people downtown. At the same time, the City of Toronto would be making more money from their real estate assets. Sounds win-win to me. Did I miss anything?