Impact of Market-Rate Residential Parking Permit Fees on Low-Income Households
On-street parking is a poorly-managed public asset. In dense neighborhoods, this results in difficult space searches, neighborhood conflict, and opposition to housing development. Market-rate residential parking permit systems are a logical solution because they manage demand. However, these programs are regressive for low-income residents who buy a permit because the permit fee is a larger percentage of their income than for higher-income groups. This paper reports on a simulation of the burden of a market-based fee on households of different income classes using three low-income neighborhoods in Los Angeles, California. Data from the American Community Survey, Consumer Expenditure Survey, and primary parking counts are the model inputs. The outputs are measures of the increase in a household’s annual transportation expenditure, by income class, after a market-rate permit fee is implemented. The results show that market-rate programs are indeed regressive for households that purchase a permit. But because many low-income households do not have a car, do not park on-street, or pursue alternative options to buying a permit, the magnitude of the effect of income class is not as large as is often assumed. The study concludes that the regressive effect of a market-rate residential parking benefit district should not be an impediment to implementing such a scheme because low-income permit purchasers can be subsidized with permit revenue from higher-income drivers in the district, resources from higher-income parking districts, or both. Additionally, revenues can be used to support transportation modes that particularly benefit all low-income residents.