Privatizing the Curb for Public Benefit
Outdoor dining in Manhattan. Image source.
The curb lane is not a public good. For decades, the overwhelming majority of this space has been dedicated to free car storage. This arrangement means that busy areas often have more prospective parkers than available spaces, generating needless traffic and pollution and wasting drivers’ time as they circle the block looking for a spot. The rise of activities such as ridesharing, e-commerce deliveries, cycling and pandemic-era al fresco dining has shed new light on the untapped value found in a more flexible curb. However, using a slice of curb space one way means you cannot simultaneously use it another way. Outdoor restaurant seating cannot be a loading zone cannot be a garden cannot be parking.
Fixing the curbside requires a way to allocate this scarce real estate fairly and effectively. The solution is for governments no longer to pick and choose what this space can be, but to establish property rights and allow a balance of uses to emerge from the bottom up in a free market. Specifically, governments should auction off one-year leases to individual parcels of curb space and use property tax rebates to return the revenue to the block where it is generated.
Whoever most values curb space would place the highest bids. If curbside dining could net a restaurant an extra $20,000 a year, its owner would probably bid much higher for nearby space than a resident living upstairs who just wants to park their car. However, that resident, their neighbors and other local businesses would each receive get a portion of what the restaurateur and other curb lessors pay. The resident could in turn put some of their payout toward renting a cheaper space just off the main drag. Or, they could forgo car ownership altogether and pocket all of the money. Everyone would be free to choose how much they value curb space, and everyone would get a piece of its value.
Choice and flexibility are at the core of this approach. The decision of whether to implement this system in the first place could be made at the hyper-local level. One block might adopt curb leases while another, perhaps with very low demand for space, keeps the old first-come, first-serve parking scheme. Each block could change its preference year to year, and the entire system could be tweaked or even scrapped before a given round of auctions.
The Curb and the City
Annual auctions would allow curb uses to change in harmony with the surrounding environment. Bids would not have to be for one parking spot worth of space, so if a new grocery store needs a large loading zone, it could easily lease space in the ideal location. If the city wants to install a separated bike lane, it could buy out an entire side of a street. Moreover, a healthy subletting market would make it easy for curb uses to adapt day by day, hour by hour and minute by minute. Residents could sublet their parking spots while they’re off at work, with smartphone and web apps emerging to facilitate transactions. Firms would likely emerge to rent spaces as, say, delivery zones in the morning and hourly parking in the evening. These spaces might help UPS stop paying so much in double parking fines—$23 million last year in New York City alone. Also, in a global pandemic, restaurants could quickly sublet outdoor dining space, without waiting for a government policy. Curb uses would naturally and continuously reflect local conditions. Cities are nothing if not dynamic, and their curb lanes should be the same way.
Curb leases would not only support uses besides parking, but also rationalize parking itself. When drivers can rent parking spaces—be it by the year or by the hour—they no longer have to circle the block looking for an open spot. The price of parking would adjust naturally according to supply and demand, so there would always be space available for people willing to pay. Renting would cost drivers money but would also make their journeys times shorter and more reliable, and, since curb lease revenues would be recycled back into the local economy, both drivers and non-drivers would save money on goods other than parking.
A Bottom-Up Solution Beats Top-Down Planning
Georgetown bike lane. Image source.
Some want to see a more centralized approach to curb reform; they call on governments to implement curb management strategies that use data analysis, public engagement and experts’ input to allocate space. This slow, top-down, inherently political process will do a relatively poor job of capturing what people actually want on their block. It pits the interests behind short-term parking, long-term parking, bike sharing, etc. against each other, each group lobbying for a bigger slice of space. Whatever groups sway government decision-makers get free real estate, while everyone else loses out. This is no way to manage a valuable asset, much less a fair way to allocate publicly owned space.
In contrast, curb leases allow whoever values this space the most to get it, while paying the local community for that privilege. The property tax rebate, or “curb dividend,” for each block would be allocated per housing unit, adjusted for its typical occupancy, and as a tax rate cut for commercial properties. The rebates would benefit everyone living in or visiting an area, as property taxes discourage development, and their cost filters down into everything from groceries, to paychecks, to rents. The curb ought to be among the first things cities charge for; as Professor Donald Shoup notes, “It is unfair to have cities where parking is free for cars and housing is expensive for people.”
Residents and businesses on some blocks might prefer that some or all of the curb money goes into public improvements such as street trees or sidewalk repair, as Shoup suggests, so a curb lease system would include a mechanism that allows a block to divert funds for any public improvement with supermajority, e.g. over 75 percent, support.
For its part, the local government simply swaps some property tax revenues for revenues from curb leases, which function like a curb land value tax. Plus, the increased economic activity stemming from a more productive curb, as well as a potential sales tax on the leases, would boost its net income. There is immense uncaptured value in the curb today, and curb leases could ensure that every stakeholder gets a slice of that value.
This idea is not terribly novel. Thinkers from Henry George to Friedrich Hayek have discussed its underlying principles. Governments regularly use auctions to allocate publicly held goods, including over $200 billion worth of wireless spectrum licenses to date. Shoup has been writing on the high cost of free parking for decades. There is nothing new under the streetlight. This is simply a proposal to make private what ought to be private, on the terms that best serve the public.
About the Author
Pat Nally works in municipal budgeting, focusing on transportation. He also writes a personal blog, Rapid Transient, on innovative ideas in transit, ridesharing, and transportation finance. He lives in Brooklyn, New York. You can connect with Pat on Twitter @RapidTransient or by emailing him at rapidtransient@gmail.com.