Parking Taxes

The recent article written by Brent Bellamy in the Winnipeg Free Press last week (http://www.winnipegfreepress.com/business/blot-on-downtown-landscape-92651214.html)--Blot on downtown landscape: Parking lots are asphalt deserts that create pedestrian dead zones--is wonderful. Our city needs more people like Bellamy to speak up about the vision of our downtown and ideas on how to get there.

Winnipeg does have its unfair share of empty lots and it destroys the urban fabric of our downtown. Getting rid of the surface parking lots and densifing the downtown with stronger mix of reasons for people to visit, work, live and play is the key to continued revitalization.

This is well known, yet troubling in how this is the most difficult to achieve and sustain, even though it is the most sustainable development and is a solution to city's drowning in carbon and congestion.

And the debate as to whether the carrot approach (incentives to deal with market challenges) or the stick (increasing parking lot taxes), or both, is one worth exploring.

There are some economic truths regarding the challenge in developing downtown surface lots, which are important to understand. Primarily it's difficult for developers to turn a profit because of the high costs of acquisition and construction required, and for those that are able to, returns are very low. This is one reason why surface parking lots continue sitting there generating an easy stream of cash for the owners.

The carrot would be that taxes could play a role in encouraging developers to build mixed-use developments, the right type of urban projects, which would generate a lot more taxes, than a parking lot tax policy ever could. Helping landowners develop their surface lots with developments that enhance the city and provide those cool places to live and work and play. The result is known and real. You will start to see this with the arrival of the new provincial / city TIF program especially with the timely release of a downtown parking strategy, eagerly being awaited as a means to coordinate the combined needs of many land users in downtown in slowing down the addition of new surface parking lots and at the expense of historical buildings that still have value.

My greatest fear in using the stick is the unknown, because raising taxes on surface parking lots will not address the fundamental market issues.

Some owners will simply pass this cost along to the parkers. An extra $30-$40 per monthly parker, or $0.50 to per hour, is not much in this city where there is no traffic congestion, using transit takes longer to get to work than using a vehicle, and where parking rates are cheap to begin with.

Increasing surface parking rates could have negative impacts; it will make building commercial buildings outside of downtown even more attractive. To counter this a parking tax policy would need to be applied citywide, or it will hurt downtown. Surface parking lots are scars on our urban landscape in general.

Other owners will simply reduce expenditures like maintenance and renewal of equipment, cleanliness, and safety patrols, making these ugly lots uglier and unsafe.

And for the owners that will no longer be able to afford holding the surface lots, they will sell to larger owners who have deeper pockets, and who are willing to wait much longer until money can be made to develop. Most owners of parking lots are speculators, and this will never change.

There are many surface lots in our downtown, so it will take decades to for them to be absorbed into the general market, under the right development conditions. So even if this policy were put into place tomorrow, the law of market supply / demand still exists, making parking more expensive and even unsafe for the long-term. This last fact is what we need to be very careful about.

People will abandon their cars not when parking lots become too expensive. They will just go somewhere else to park. The public will only abandon their cars for an incredible place to work, live and visit and for a great transit system. But it will take time for our downtown to develop as this place, and with much more conviction to quality, well-designed and pedestrian-friendly developments.

The slow but gradual approach of eliminating one surface parking lot at a time as quick as market absorption permits should be the push. Combined with a 20-year rapid transit plan showing how our future transportation needs will be achieved, and then forcing surface parking lot owners to beautify, improve and make safe lots in the interim, should be mandatory.