Parking and its impact on local economy

In this month's guest article we are taking a closer look at “Parking and its impact on local economy” in an article written by Prof. Tom Rye from Lund University in Sweden.

Parking has a key influence over how people travel.  For example, 85% of commuters who drive into central London in the morning rush hour have a free parking space provided by their employer.  The implementation of a controlled parking zone in districts 5-9 in Vienna led to a 25% reduction in people driving to the area (COST342 Report on Parking, 2006).  But if cities try to manage traffic levels through pricing or reducing parking spaces, politicians are often afraid that this will drive away trade and investment.  The purpose of this short article is to ask how realistic their concerns are.

First of all, parking is rarely the key issue that influences people’s choice of where to go.  For work, we choose the best job that suits us and pays a reasonable wage.  For leisure and shopping, the range and quality of shops and other facilities at the destination is the key deciding factor – including the environment offered, particularly for shopping.  So for example Nottingham in England is a more successful retail centre than its nearest competitors, Derby and Leicester, even though it is more expensive to park in Nottingham.  The reason for this is that Nottingham offers a wider range of shops and, arguably, a more pleasant city centre shopping environment, with a large pedestrianized area.  The removal and management of on-street parking is of course a key part of creating a better pedestrian and therefore shopping environment.

Secondly, in the very small number studies that have been carried out, it has not been possible to establish a link between parking provision or price and the success of a shopping centre.  More parking at a cheaper price does not mean a successful shopping centre; and centres with higher prices and a more restricted supply can still do well.  This is illustrated with the data from the UK carried out in a study by Rye (for the City of Edinburgh Council, 2005) – a lower number on the vertical axis of the graph means more parking and it is clear that there is no relationship between this and the success of a shopping centre.  Mingardo (2011) found a similar pattern in 42 shopping centres in the Netherlands.

It has also been shown in many studies that shopkeepers routinely and massively overestimate the importance of parking for their trade.  A survey (Mingardo G., Parking, mobility and retail: an uneasy relationship, Polis Annual Conference, November 2011) undertaken in a main shopping street, Meent, in Rotterdam shows that 56.8% of the shopkeepers believed that over 50% of the visitors arrived by car; while in actual fact only 21.5% arrived by cars and provided only 23.8% of the turnover.  This is also seen in the graphic below, from CIVITAS I in Graz, Austria, reproduced by Sustrans in the UK.

A final key issue is that all parking has a cost, even if there is no charge for drivers to use it.  Building new parking structures in shopping centres can easily cost 20,000E per space, even in the less well-off parts of Europe – and close to 100,000E per space for underground parking in the Netherlands.  Therefore, if drivers do not pay for it, then everyone does, either through higher general rents (and therefore prices) for shops in a shopping centre, or perhaps through higher local taxes, where a municipality has subsidized a new car park.  This is money that could have generated higher benefits if it were spent elsewhere.

The available evidence therefore casts much doubt on the assumption that more parking means more business.  Perhaps the best way to convince your local shopkeepers of this is to persuade them to carry out their own survey of how people travel to their shops.  In the meantime, if you need more information on these topics, contact tom.rye@tft.lth.se