Will Seattle Suppress a Key Parking Fix?

This is a convoluted story about an 11-page memo on parking meters. It seems a trifle at first—an obscure bureaucratic kerfuffle. But it’s not. The subject of the memo is a surprisingly large opportunity for affordable housing in Cascadia, and the memo—an exercise in obstructionism—reveals much about why progress on building desperately needed homes is infuriatingly slow. It also points to a chance still available to put housing for people ahead of storage for cars.

The abridged, dry form of the story: in Cascadia’s largest metropolis last year, the Seattle City Council instructed the city’s transportation department (SDOT) to advise it on how to best create a pilot project for a “parking benefit district” (PBD) in the Capitol Hill neighborhood. (A PBD is a zone where a share of the funds from parking meters and other public parking charges pay for neighborhood improvements, chosen with neighborhood input.) The council made its request of SDOT acting on the recommendation of the 28-member citizens’ Housing Affordability and Livability Agenda (HALA) committee (on which I served). SDOT, reportedly guided by the mayor’s office, replied eight months later, at the end of June, with 11 pages of stonewalling. It responded to “How?” with “No!”

Normal institutional turf wars? Perhaps. But the story merits scrutiny, for a few reasons. First, it reveals that Seattle’s executive branch has apparently tried to put the kibosh on another HALA recommendation, notably one that had broad committee support. (The mayor has previously announced opposition to just one other of the 65 recommendations, a suggestion to allow greater flexibility of housing in single-family neighborhoods.) Second, it helps illustrate one of the institutional barriers to reversing the surge of housing prices in the Northwest’s booming cities—a hesitancy to cede control of money to neighborhoods. And finally, it highlights how essential certain minutiae of urban policy are to the larger goals of stabilizing the climate and reversing economic inequality.

But in an unintended way, too, the story and the arguments in the memo illuminate what Seattle’s mayor and city council can still do if they want to let the air out of the balloon of neighborhood opposition to much-needed homes for Seattle’s people.

Now, the whole story.

What’s a “parking benefit district,” and what does it have to do with housing affordability?

In a Parking Benefit District, neighborhoods themselves stand to benefit from increased metering and distributing parking badges. Here’s how it works. Typically, any time a city installs new parking meters or extends meter hours, the revenue goes directly to the transportation department and stays there (though in Seattle, it goes by way first of the city’s general fund). But in a PBD, while neighborhoods themselves don’t have the authority to set meter prices or hours, they do receive a share of the revenue when new meters go in, when the city extends meter hours, or when the city starts making parking badges available for a fee.

Once neighborhoods are in on the benefits of extending parking charges, they can become allies to metering, rather than hostile to it.

Then, a local advisory group, made up of community members, can advise the city on how to use this revenue for improvements in its very own backyard. Perhaps the neighborhood wants to extend or improve sidewalks. Perhaps the neighborhood values more clearly marked crosswalks near schools. With new PBD revenue, they have money to make their priorities into realities.

And once neighborhoods are in on the benefits of extending parking charges, they can become allies to metering, rather than hostile to it. This approach not only benefits the neighborhoods themselves, but also represents an often overlooked hack to the housing affordability crisis.

Notably, the diverse HALA committee endorsed a recommendation (OP.1 on page 40) to implement a PBD pilot project with near unanimity. It had 26 “yes” votes and zero “no” votes. In simple vote tallies, it won second place among all 65 recommendations. Separately, and not reported publicly, we HALA committee members rank-ordered all of our recommendations by their importance (using a form of ranked-choice voting), and a PBD pilot was our top-ranked parking reform, beating out much more sweeping recommendations.

The reason HALA ranked the Parking Benefit District pilot so highly is that parking rules bloat housing prices, and PBDs are the most promising political strategy for changing parking rules. I’ve spelled out this argument in other articles (the crux is here), but I’ll summarize.

Eliminating existing requirements currently on the books in almost every city, namely that housing builders install lots of off-street parking spaces, is a key strategy for housing affordability. Most people wouldn’t guess it, but parking requirements (or “quotas”) raise the rent—and not just by a little, but by a lot. Here’s a full rundown of how they do so, but some major ways include:

• Parking quotas raise the cost of building housing, especially inexpensive housing, and they suppress the number of apartments and houses that can fit on a lot—often by a quarter to a half.
• Parking quotas block adaptive reuse of old buildings, such as vacant warehouses, to housing.
• Parking quotas disperse housing by suppressing housing units per city block, which exacerbates sprawl and therefore distances traveled, which makes transit less practical and driving more common. And driving is expensive.

At Seattle apartment and condo buildings, the cost of parking is as much as 35 percent of monthly rent, even for residents who do not use a parking space. And this estimate does not include the way parking mandates suppress the number of apartments citywide, which leads to more price competition for each of them.

But politically, eliminating quotas is a daunting proposition. Proposals to do so fly into the teeth of neighborhood parking territoriality and typically find few backers. Indeed, perhaps neighborhoods’ principal objection to new housing is that it will fill the neighborhoods with people who will then crowd incumbent residents’ curb spaces.

The cost of parking is as much as 35% of monthly rent, even for residents who do not use a parking space.

That’s where PBDs come in. They are a brilliant work-around. They tap neighborhoods’ territorial impulses about curb parking and give it a constructive outlet. If neighbors stand to benefit from increased metering, or from charging for parking badges or stickers in neighborhoods, fewer of them will put pressure on local officials to defend or increase off-street parking quotas at new buildings. Some of them will even become a new political force in city politics: a force against parking quotas, in favor of charging curb spaces, and in favor of infill housing development—because it will fund community projects. Indeed, localizing a share of parking revenue can help to neutralize neighborhood opposition to new housing, even exclusion. When such a political force is mobilized, great leaps forward toward compact, walkable, affordable communities will be possible.

Starting with a pilot project allows cities to work out the details, because PBDs can take a variety of forms, depending on local conditions and goals. Once the pilot is working well, word of mouth will inspire other neighborhoods to clamor for their own benefit districts. So a PBD pilot is the most promising first step in changing citywide politics about parking quotas.

During the ten months of discussion at HALA, a PBD pilot rose from obscurity to become a priority of the committee—the very top-ranked parking reform. And thanks to HALA’s recommendation and city council member Tim Burgess (he’s a longtime leader on parking reform), the city council in November 2015 instructed SDOT to deliver a report that “recommends a pathway for piloting a PBD in the Capitol Hill EcoDistrict, including potential dedication of some percentage of on-street parking revenues for street, sidewalk, vehicle, and pedestrian improvements physically located within the district.”

Capitol Hill EcoDistrict, a project of the nonprofit affordable housing provider Capitol Hill Housing, has an impressive track record in innovative approaches to parking and other challenges of urban sustainability. It had enthusiastically embraced the HALA recommendation and asked the city council to choose it as the city’s partner for the PBD pilot project. EcoDistrict staff even began conversations with business leaders and neighbors in Capitol Hill about the potential pilot, testing receptivity and introducing the idea.

But all was quiet from City Hall.

SDOT says No

Finally, on June 30, SDOT sent a response memo to the city council (posted here).That’s when this story turned from hopeful to frustrating. Instead of describing the best path to creating a Parking Benefit District pilot in Capitol Hill, it argued against PBDs in Seattle generally: “We do not recommend moving forward with establishing a PBD pilot due to significant parking management, legal, policy, and fiscal equity concerns.”

These three arguments—parking management, fiscal equity, and legal concerns—are dressed up in the kind of language you might expect from parking policy supervisors, but under scrutiny, they reveal themselves as tenuous, illogical, or readily resolved.

1. Parking Management

SDOT first contends that PBDs would be “contrary to the principles City Council adopted in 2010 in helping to establish SDOT’s successful and well-regarded Performance-Based Parking Program.” Under the Performance-Based Parking Program, parking prices at meters are occasionally adjusted up or down to keep curb spaces in regular rotation, with the aim of one space per block available at any given time.

SDOT’s memo suggests that dedicating some of the additional net revenue from extending meter hours or adding meters to affected neighborhoods would disrupt performance pricing. Even though PBDs’ advisory groups of neighbors would not have authority to set parking meter rates or hours, these groups’ very existence would cause “a shift…toward the creation of decision-making processes aimed at revenue generation.” Allegedly, this shift would run the “risk of destroying…built-up community trust that we make decisions based upon data and sound policy rather than fiscal incentives.”

SDOT’s argument is doubly mistaken: It’s wrong on the policy, and it’s wrong on the politics.

On the policy: Parking Benefit Districts and performance pricing are not in competition. They are parts of the same best-practices philosophy of parking management that the nation’s foremost parking guru Donald Shoup has been promoting for years. Indeed, when City Council members Tim Burgess and Mike O’Brien first won adoption of the performance pricing program in 2010, they were pushing for PBDs, too. SDOT managed to block them then (though, with then-Mayor Mike McGinn, they were able to create a temporary work-around of putting some funds in a neighborhood grant program), and SDOT or its overseers apparently want to do so again now.

PBDs do not have any say over meter rates in the ten cities where they now operate successfully. They just get a share of the proceeds. The city council can adopt a PBD policy that retains full control over meter rates for SDOT and its data-based methodology. The Capitol Hill EcoDistrict, according to its director Joel Sisolak, has never once suggested its pilot would have a say over meter rates.

On the politics: Seattle’s performance pricing program is dramatically underdeveloped and would work much better if PBDs were around to support it. The program is a great start, but it’s still crude and blunt, gathering data infrequently—not much data—and adjusting prices just once a year. Its pricing system is imprecise across both space and time, sluggish about adjustments, and capped at too low a top price and too high a bottom price. SDOT has been slow to extend metering to additional blocks and to those hours of the day, particularly in the late evening, that cry out for it in SDOT’s own data. In fact, you can go back through five years of reports here and see that some neighborhoods have long had excessive parking congestion in the hours after metering stops (at 6 p.m. or 8 p.m., depending on the neighborhood). Capitol Hill is a prime example.

Furthermore, five years since the program’s inception, SDOT has extended metered hours past 8 p.m. exactly nowhere in the city. Similarly, SDOT has been a laggard in turning on meters on Sunday, metering additional blocks, and applying performance parking to non-metered blocks (which account for more than 95 percent of the city): the city’s 31 restricted parking zones, controlled by resident parking badges, are ripe for innovative application of the same philosophy.

The reason SDOT has been so slow to extend hours or meter additional streets is not institutional incompetence. SDOT is good at running parking on blocks with meters. Rather, it is learned timidity about provoking neighborhood opposition. Few things incite more vociferous calls to City Hall than proposals to charge for previously free curb spaces. So SDOT has been cautious and inclined to wait.

With neighborhood buy-in, though, which can come quickly by setting up PBDs, extending performance pricing could go further, faster. The Capitol Hill EcoDistrict has begun discussing the idea with some neighbors and local businesses, and when locals hear about the money staying close to home, they warm to the idea of extending metering from 8 p.m. until the wee hours—as SDOT’s data have justified for years. PBDs are no threat to performance pricing; they’re a complement. Indeed, PBDs could become a political base for a more robust, adequately funded, and comprehensive performance pricing program, more like San Francisco’s.

2. Fiscal Equity

SDOT’s second contention is that “dedicating revenue to a specific neighborhood raises significant equity concerns.” At present, most meter revenue comes from downtown and surrounding neighborhoods, including Capitol Hill. SDOT spends this money citywide, however, not just in these zones. And some neighborhoods have residents with lower average incomes than does the city center. Parking Benefit Districts might restrain SDOT from spending meter revenue from Capitol Hill, for example, on transportation enhancements in Rainier Beach, a neighborhood with fewer advantages. SDOT contends that this would reduce fiscal equity across the city.

This argument stacks misrepresentation of Parking Benefit Districts’ potential on top of a cramped interpretation of equity, making at least seven errors along the way. Like performance pricing, equity concerns integrate well with PBDs.

First, existing parking meter revenue would continue to flow to SDOT for its citywide purposes. Parking Benefit Districts would only get a portion of the additional revenue from expanded hours and new meters, plus changes in parking badge charges in residential parking zones. PBDs only take new revenue, not existing revenue. So PBDs pose no threat to SDOT’s current citywide spending priorities. In fact, PBDs in most cities that have them only get about half of the net revenue (that is, proceeds after covering the city’s costs). The city gets the other half. The city council’s instructions to SDOT further underlined this fact when it noted in its definition of PBDs that they involve the “potential dedication of some percentage of on-street parking revenues” (emphasis added).

Seattle has half a million curb spaces, but charges for usage of just 2.5 percent of them.

Second, SDOT is unlikely to get much new revenue from expanding meter hours or new meters to spend citywide any time soon. In recent years, meter expansion has been glacial in pace, so even if citywide spending were critical to advancing equity, stopping PBDs wouldn’t make an appreciable contribution.

Third, and conversely, PBDs are the only thing likely to speed revenue growth. Opposition to parking meters remains adamant in most neighborhoods. West Seattle, which SDOT mentions as a likely loser from PBDs because it has no metered parking, has no meters not because they’re unwarranted; it has no meters because West Seattleites have opposed them. But if West Seattle got to keep the money, things could be different.

The same is true in many of Seattle’s neighborhoods, especially if SDOT designed PBD systems for restricted parking zones, where it could begin auctioning parking placards and badges to residents and visitors. Indeed, if SDOT authorized PBDs and offered a 50-50 split of net revenue with their host neighborhoods, citywide parking revenue would likely grow much faster than without PBDs.

Seattle has half a million curb spaces, but charges for usage of just 2.5 percent of them. Only PBDs have the potential to raise that percentage quickly. The potential for PBDs covers the entire city, not just places that currently have meters. Rainier Beach could have its own PBD, as could Beacon Hill and Lake City, and every other neighborhood that wanted one. The particulars—and prices—would vary. Most would involve inexpensive parking badges, not thousand-dollar meters, but the concept would be the same.

Fourth, equity has many dimensions, and geography is just one of them. Disparities in income among residents of Capitol Hill, for example, are much larger than are the differences in average incomes among neighborhoods. The question for equity is not where parking revenue gets spent as much as what it gets spent on and who thereby benefits.

Fifth, even if the question of equity were mostly geographic, the city could use its share of PBD revenue to help equalize spending among neighborhoods or to concentrate investments in places with the greatest need. Ideas like this are among the many program details that SDOT might have examined and offered recommendations about in its memo.

Sixth, the Capitol Hill EcoDistrict is a project of Capitol Hill Housing, a nonprofit provider of affordable housing and social services. The EcoDistrict has been focused intently on equity all along. In its community discussions of a potential PBD, it has floated ideas such as spending the proceeds on subsidized transit passes for residents of Capitol Hill Housing’s buildings or for low-wage workers at neighborhood businesses.

Seventh, one of the best ways to advance equity would be to change who decides how revenue is spent, and localized PBDs can do that more easily than can a city agency. The EcoDistrict, for example, has talked about populating the pilot’s advisory committee with representatives of disadvantaged communities—low-income families, racial and ethnic minorities, and transportation minorities (such as people who are mobility-impaired or transit-dependent). The priorities that emerge from such a body are likely to reflect equity considerations.

3. Legal Concerns

SDOT argues that Parking Benefit Districts are legally problematic, but examination of legal restrictions on parking proceeds indicates that PBDs would be more in line with existing law than current spending practices. Parking proceeds in Washington State are legally fees, not taxes, and the body of case law that distinguishes the two implies rules for how fee revenue can be spent. In short, parking revenue must go toward purposes that are related, at least indirectly, to parking management.

This restriction forecloses many options used by PBDs in other parts of North America: tree planting, police patrols, and other neighborhood projects. The city council acknowledged as much when it wrote in its instructions to SDOT that PBD revenue might go to “street, sidewalk, vehicle, and pedestrian improvements physically located within the district.” But legal precedents around fees leave many extremely impactful spending options open, too: parking fees could fund alternatives to driving, such as transit passes, that might reduce demand for parking spaces in the first place.

[PBDs] complement performance pricing, facilitate equitable investment, and offer protection from legal challenges.

The more closely the spending relates to the source of the fee revenue, the safer it is from legal challenge. So, spending late-night Capitol Hill parking revenue on bus passes for Capitol Hill workers, who might otherwise crowd neighborhood curbs with their vehicles, is a more defensible use of funds than devoting the revenue to bridge maintenance on the other side of town. PBDs in Seattle would need to spend their funds on things that help manage parking locally, but as long as they do so, they’re actually on stronger legal ground than the city’s existing use of parking revenue.

As with performance pricing and equity, so with legalities: PBDs are a solution, not a problem. They complement performance pricing, facilitate equitable investment, and offer protection from legal challenges.

Unstated Motives?

When arguments do not add up, the deeper motives are sometimes unspoken. The main motivators of SDOT and its executive-branch overseers might conceivably be none of the arguments in the memo. For example, one might speculate that leaders fear losing control over future parking revenue.

The city council has typically awarded city general funds to SDOT in rough proportion to the meter revenue SDOT collects. SDOT has greater discretion over these funds than it does over some of its other revenue sources. As the city grows, parking demand, meter coverage, and rates may expand, too, increasing SDOT’s budget. In this way, sharing control over the incremental dollars with neighborhood advisory committees would diminish SDOT’s future power. (Or so the leaders might think. As noted above, city revenue might grow faster with PBDs if the city divides the proceeds.)

What’s next?

From this vantage, it appears the Seattle City Council would do well to send SDOT’s memo back with a big “F” on it and request it answer the original question.

Or maybe not.

Maybe the council doesn’t need a memo from SDOT. It certainly doesn’t need SDOT’s permission. It can instruct SDOT to launch a pilot, in implementation of the HALA recommendations, to which most Seattle city council members have declared allegiance. By reading between the lines of SDOT’s memo, we can even divine the key points of the ordinance, which might be drafted like this:

Seattle Department of Transportation will pilot a Parking Benefit District, launching within six months, in the Capitol Hill EcoDistrict. SDOT will:

• use its existing authority to expand meter hours later at night in the EcoDistrict, as SDOT’s performance pricing principles have long justified;
• put half of the net incremental revenue into a fund restricted to transportation improvements in the EcoDistrict;
• write into the charter of the pilot a strong equity focus in the allocation of funds;
• work with the EcoDistrict to appoint a diverse advisory committee to help SDOT steer spending decisions (it might, for example, help fund transit passes for the residents of subsidized housing in the EcoDistrict and for low-wage employees of local businesses);
• specify in the charter of the advisory committee that the committee will have no role in deciding meter rates or times; and
• conduct careful data collection and commission an annual independent evaluation, to help inform the design of a future citywide program to which other neighborhoods will be welcome to apply to create their own Parking Benefit Districts.

The recommended design for such a citywide program, including draft legislation to create it, will be contained in a report filed with the City Council by SDOT no later than one year after the launch of the pilot. Oh, and SDOT? This next report better not be like the last one. It better do what we instructed.

UPDATE, September 21, 2016: Yesterday, a Seattle City Council committee discussed SDOT’s memo, as Josh Feit of Publicola reports here. The committee took no action, but the tone of the discussion was not encouraging. The answer to “Will Seattle suppress a key parking fix?” appears for the moment to be, “yes.” Disappointing.