Parking Permit Fees: Cost vs. Price by Casey Jones, CAPP

I recently had the opportunity to sit in on a parking advisory committee meeting at a major university. This committee, like most parking advisory groups at universities, is made up students, faculty, and staff, and is charged with making recommendations about parking and transportation to the vice president overseeing the parking department. I’ve observed three of their meetings this year and they seem reasonable enough—well-intended and pretty eager to make things better for their campus and themselves

The main topic this past meeting was next year’s permit fee increase. I was helping with the second agenda item so I got to sit back and observe the group’s discussion. My host, who oversees parking, warned me ahead of time that things would get heated as he had prepared two proposals: one that raised the parking permit rates by six percent, and the second by zero. The first, he argued, was needed to create new cash flow for debt service on the next garage they need to build (and the committee wholeheartedly supports), and the second if the garage is not built. I’m sure by now you can guess where the conversation was headed.

The committee wants the garage but doesn’t want want permit fees to go up to get it. Instead, the discussion focused on the how much salaries and tuition would increase in the coming year and that permit prices shouldn’t go up more than the anticipated increase in salaries. It’s certainly true that the fee for any good or service should not be beyond what the market will allow, but tying price to wages ignores the cost of providing that good or service.

At this point in the meeting, I raised my hand. I asked the group if they knew how much it costs to provide for the development, operation, and maintenance of their parking facilities on a per-space basis and attempted to make the point that this figure should be the starting point of any discussion about permit rates. When I was finished, all I saw were blank faces—so much so that I wondered if what I’d said was in English or some foreign language. I was politely thanked for my expertise and then the committee unanimously voted to raise permit rates no more than next year’s expected salary increase.

I can’t say how much groundwork the parking director did prior to this meeting, but I’m guessing that the committee would have been more equipped to make a sound decision based on the right things if they’d been educated along the way about the true costs of providing for parking on their campus. For now, I’m hoping everyone there gets a big raise.

2 thoughts on “Parking Permit Fees: Cost vs. Price by Casey Jones, CAPP

  1. Good informative article. It is very important to do your ‘homework’ before presenting any proposal. Knowing the cost of development and operations is key to the conversation.

  2. Very relevant article Casey. We used a similar strategy a few months ago with our Board of Directors to have a new visitor parking lot approved. We provided data on the cost of parking down to a parking stall, then we provided the permit rate (and how short the rate was in respect to cost) and the revenue provided by daily & visitor parkers and the level of subsidy these short-term parkers provide to meet our development & operating costs. There was no objection and our request for a new visitor lot was approved.

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