Your Council Tax is £0 – finding a value for a parking space

A young man in an inexpensive suit knocks on a door in John Street.  The householder answers.

Man in suit: Good morning.  Are you concerned about the cost of your monthly bills?  Would you like to save £132 a month?
Householder: Ah, yes.  Are you from the electricity company?
Man: I’m from the City Council.  If you give me your residents’ parking permit then we will pay your Council Tax, that’s a saving of £1593 a year! Sign here and save money right away.
Householder: But where will I put my car?
Man: We have a special offer on, if you sign up now I can give you free membership of the car club and two thousand driving miles.

After listening to the Freakonomics podcast Parking is Hell I began to wonder about the price of car parking in Cambridge city centre.  The podcast describes that in some cities a significant proportion of cars are cruising for parking and not actually going anywhere.  Economists and academics have suggested that the price for parking can be adjusted to ensure there is always one or two empty spaces so there is no wasteful cruising for parking and drivers find parking more easily. A project called SF park is trying this out in San Francisco.

If you ask people what they want in a suitcase they say ‘lighter’ but even a light suitcase filled with 15kg of clothes is still hard to move. The solution was adding wheels to make the suitcase easy to move. The moral is listen to people’s problems and think laterally about solutions.

In the Kite area of Cambridge there are continual moans that there are not enough residents’ parking spaces and yet there is anecdotal evidence that many of these parked cars don’t move from one day to the next or sometimes week to week. Local politicians seem keen on providing more spaces too [Source: Market Liberal Democrats newsletter April 2013]. Although people are asking for more parking spaces I’m not sure that this is actually what they want, here’s why:

  • 30 parking spaces + 0 free spaces = unhappy resident 😦
  • 50 parking spaces + 0 free spaces = unhappy resident 😦
  • 29 parking spaces + 1 free space = happy resident 🙂

Perhaps the price for this value resource isn’t right? Perhaps some people would respond to a financial incentive to give up their permission to park so there is room for others? But what is the value of this (notional) parking space?

What is the value of this parking space?

What is the value of this parking space?

In my post on city centre parking prices we saw that residents are charged £0.11 for all day parking whereas parking in the Grafton East car park would cost £24 for the same period – quite a difference! At £24 per day a residents’ parking permit would cost over £8,000 per annum, wow! But that comparison is too simple because the car parks do not have a utilization of 100% and you might expect a discount for bulk buying a year’s parking, etc.

Cambridge City Council got a revenue of £1,574 per annum per space in the Grafton East car park and more than £2,000 per space in the Adam and Eve Street car park in 2011/12 [Source: Cambridge City Council, response to Freedom of Information request 2142].  So theoretically the City Council could change residents’ parking spaces in to on-street pay and display spaces and receive an additional income of £1,500 per annum. The Band D Council Tax for 2012/13 is £1,512. Hmm.

Would you give up your residents’ parking permit in return for paying no Council Tax?