Monday, August 17, 2009

Public policy and parking discipline in our cities

Debates in India about urban transport policies tends to be confined to the hardware dimension of mass transit systems, road widenings and fly-overs, ignoring the equally important and complementary transport management issues like multi-modal integration, parking fees, road use restrictions (congestion fees, etc), vehicle licensing norms and fees and so on.

The exponentially growing private vehicle foot print and stagnant road space has pushed traffic congestion to the forefront of our urban challenges. In this context, this graphic (from Economist) draws attention to the skewed incentives on private vehicle use in Indian cities, compared to cities elsewhere. If Mumbai is to compete with Shanghai, it should also pay attention to the fact that parking charges are ten times larger in Shanghai.



I had blogged earlier about the parking problems in Indian cities, the widespread habit of unauthorized road-side parking, and suggested a market-based solution to this problem. Most often, parking violations and irregular parking on road margins are seen as a law enforcement failure.

The low parking fees in Indian cities is a reflection of three factors (which I can think of)
1. The lower opportunity cost of parking space. Given the spectacular increases in land values in Indian cities during the last real estate boom, it may be reasonable to presume that the opportunity cost of land values in places like Bombay is large enough to be not left vacant. However, though land values have risen sharply, the costs (market transaction costs) associated with development of vacant lands continue to remain high for various reasons.

2. The poor enforcement of parking regulations. The enforcement failures exist at both sides - conformity with parking space regulations when buildings are constructed and action against unauthorised parking. Besides, creating the obvious problems associated with illegal parking, weak enforcement bids down the market price of the few commercial parking spaces available in the city and dis-incentivizes the development of commercial parking lots. In other words, instead of promoting them, poor enforcement acts as a prohibitively large tax on the few existing parking lots.

3. A culture that still tends to see parking a public good and not a commercial service to be purchased from the market. This is a major contributor to the wide-spread parking violation that characterizes our cities. This has also come in the way of a take-off in the commercial development of parking spaces.

As can be seen from the aforementioned lines of analysis, the market for parking spaces remains entrapped in a self-fulfilling negative spiral, which is true of most of the civic challenges faced by us. On the one hand, a culture of free parking and poor enforcement of parking regulations discourages commercial development of parking spaces; while on the other hand, the absence of adequate parking spaces leaves vehicle users with no option but to park their vehicles at any available vacant spot. And exacerbating the problems are the sheer numbers (per capita land space) of vehicles congregating into specific commercial locations at peak times.

Any effort to forcibly break the deadlock by strict implementation of parking regulations (as has been tried in many cities by committed local administrators or authorities), is bound to come up against strong and activist public opposition (which in turn is anticipated and voiced by the political representatives). Admittedly, as aforementioned, the lack of parking spaces complicates the enforcement challenge, and it takes considerable time for commercial parking spaces to develop even when the commercial environment turns friendly and positive. In the circumstances, even under the most optimistic of conditions, it takes a long time (many years and even decades) for parking discipline to emerge in our civic consciousnes.

Note that the aforementioned analysis is simplified by leaving aside factors like absence of good public transit facilities which in turn encourages commuters to prefer their private vehicles.

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