A Proposal to Adopt Economic Approach to Allocate Parking Spaces - Report Example

Mr. /Mrs. /Ms Vice-president for Parking space Allocation of Arizona Arizona Dear Mr. /Mrs. /Ms Enclosed is a proposal whose aim is to solve the university’s parking space policy. The parking proposal will show the inherent problems that the current parking policy has and will suggest possible ways to solve these problems. This parking proposal will assume an Economic approach as an amicable way of solving parking space problems. The Economic principle dictates that parking spaces with lots of vacant positions charge high prices. Parking spaces with few positions charge low prices. Thus, the approach will seek to balance demand and supply and, as a result, eliminate parking shortages. The benefits of this proposal include maximum and efficient use of available parking space. The university, therefore, need not spend huge amounts constructing new parking spaces but maximize the current parking space. Allocation of parking spaces will be equitable thus promoting fairness and equity in the university. Researches in parking systems reveal that this proposal is feasible and workable. This parking space policy has been a success in other cities, in the world therefore; it is a practical approach to solving parking in this university. It is my sincere wish that this proposal will be worthy of implementation in the university. Sincerely, Surname, First name Name: Professor: Course: Date: A Proposal to Adopt Economic Approach to allocate Parking Spaces Submitted by Surname, First name (Student) Problem The parking space available at the University of Arizona is inadequate. The high number of student enrollment in the university has worsened the situation. Parking in the university has become a great challenge. There are different permits currently available in the University for parking. The parking spaces have signs that show the permit required to park there. The permit will also indicate the number of hours valid for the permit (UOA, 2011). However, despite these efforts many still miss a slot to park their vehicles. Parking space privileges are also common in University setting. People who occupy senior positions in the University have their parking spaces reserved. The reserved parking slots are oft the best parking spaces available in the institution. Since parking permits pricing systems lack the basis of demand and supply, shortages of spaces result. Worse still, possession of a permit does not guarantee one that he/she will find a parking space. Failure to secure a parking Lot often causes frustrations, which is detrimental to the university credibility. Use of Economics in setting prices of parking permits will eliminate parking shortages that result from unmatched demand and supply. Proposed Solution This research proposal will establish an efficient parking system that will minimize parking space shortages and maximize the available parking space. The underlying principle in this proposal is Economics, where prices of several parking spaces are in according to demand and supply. The main problem of the existing parking system is that some parking spaces are more attractive hence highly competitive. The implication of this is that parking spaces that are located far away are underutilized. An efficient parking pricing system will charge high prices in major locations in order to decongest such parking places. Application of this Economics approach will eliminate shortage of parking spaces resulting from unmatched demand and supply. Justification Parking is a major component of Transport demand management. There are two main approaches to parking in Universities, the political and economic approach. Rules and regulations are the basis of the political approach. The economic view in the other hand relies on market prices (Ison & Rye, 2012). An interview with one of the chancellors, the chancellor stated that parking is one of the most serious problems that students face. UCLA University’s chancellor in an interview stated that “the institution had the most abundant parking space in the state except for two other universities; Ohio state and Texas A & M”. The mind-boggling question was how is it that parking is a problem given the abundant parking space. The parking problems in campus root from improper pricing and not scarcity of space (Ison & Rye, 2012). Universities champion for equality both socially and economically. However, some of their policies contradict this equality policy. For instance, UCLA has 175 different parking permits. The classification of these permits stems from an individual’s status in the university. The major classifications are according to; faculty members, staff members, administrators, donors and students. Donors are further classified according to the amount of donations. Parking privileges are cumulative implying that those who park in reserved areas can as well park in spaces designed for those with low ranks (Ison & Rye, 2012). A political approach to parking is the genesis of campus parking problems. Failure to observe demand and supply has led to shortages of parking spaces in Universities. The university maintains a waiting list that comprises of students who are unfortunate and fail to secure a parking permit. The university then interprets the students as the un-met demand (Ison & Rye, 2012). Construction of new parking facilities to meet this “demand” is infeasible economically. The price of a parking permit is much lower than the cost of a recently built parking space. The permit price constitutes only a small percentage of marginal cost of parking. Operational and capital costs of new parking areas are high while permit prices are low. Therefore, new parking spaces will have longer payback periods. Payback period is the time in years when a project recovers its capital expenditures from cash in-flows it generates. In 2005, the vice-chancellor for general services at UCLA said “a new parking space will approximately have a payback period of 30 years”. Thus, setting up new construction facilities is not a cost effective solution to parking space problems (Ison & Rye, 2012). Parking is never free; one has to pay for them either directly or indirectly. Mispricing, especially underpricing, leads to a high demand of parking spaces. The overall result of underpricing is increased traffic congestion and shortage of parking spaces. There are myriad benefits that result from charging users parking fees directly. Increased revenues from convenient parking slots reduced number of spaces required to meet demand, and traffic decongestion is some of the key benefits. This pricing system would also encourage people who park for long durations to use less convenient spaces (Todd, 2011). Professionals recommend direct pricing of parking spaces. Increased land and urbanization cost and traffic congestion back this pricing system. Price parking also leads to the development of the area. It is, however, important to note that unpriced parking can also be successful. The structure of park prices areas should be in such a way to achieve the set objectives. The objectives may be financing park facilities, generate revenues or to manage transport demand (Todd, 2011). Experts recommend park pricing in areas where traffic congestion is a common occurrence. The prices should be set at 85-90% of parking occupation. According to Shoup, “responsive pricing is park pricing based on occupancy rates”. Proper communication through brochures, maps and signs should help motorists locate parking spaces and give their prices. Motorists will have the option to either choose a convenient place at a high price or a distant parking area but at a cheap price (Todd, 2011). Parking, trivial as it is, is a major problem among campus students. In 1983, a study revealed that 70% of students claimed parking to be a more serious problem than mathematical skills (Ison & Rye, 2012). The political approach to parking uses the point system to allocate parking space to students. The determining factor in the allocation of parking spaces in this method is the distance between a student’s home and campus. The point system has many limitations, cheating being the major one. Ideally, the point system allocates more points to students who live far from campus. These students from distant places get parking spaces easily than those who live the university. However, many students provide false information regarding their areas of residence (Ison & Rye, 2012). The point system encourages students to give false information. All parking slots on campus have the same price regardless of convenience of the parking space. Students, therefore, falsify their information in order to get a convenient parking slot. Cheating to obtain high points is rampant in universities. A student once said that while, in campus, he learned that to get good grades he had to work hard but to get parking space, he had to cheat, cheat and cheat (Ison & Rye, 2012). Institution of price parking will go a long way in overcoming point system limitations. It is ironical that campus or Universities experience parking problems. One would expect intellectuals in these organizations innovatively solve the parking problems in the institution. It is, however, unfortunate that most universities use point and average pricing systems of parking. Recent research in fields of economics, urban planning and political science seem to make no difference on parking policies (Ison & Rye, 2012).Thus, there is an irrepressible need to roll out performance-based pricing system in allocating parking spaces, in Universities. The Washington University state uses a zone parking price system. A zone parking price system uses three main criteria in setting park prices; quality, proximity and demand. The concept of zonal pricing system can be applied. Prices would thus vary in a manner to balance market supply in various locations. Variable prices can balance demand against fixed supply of spaces. The above economics principle is the Goldilockss principle (Ison & Rye, 2012). Under the Goldilockss principle, prices will be too high if there are many vacant spaces and low if there are few vacant spaces. The right price will occur when there are few vacant prices everywhere. At such a time, motorists will easily locate an available place to park their vehicles. The primary goal of this pricing system should be to create little vacancies in all parking areas. Engineers recommend that the vacant spaces have a threshold of 15% at all times. This threshold level would help eliminate the time spent by drivers searching for available space to park. Cushioning vacancies everywhere is particularly important for university students and lecturers who are time-sensitive (Ison & Rye, 2012,). Occupancy rate in parks needs periodical evaluation to assess whether prices produce the desired rate of occupation in parks. Price adjustment in parks with surplus or shortages will restore normalcy. New electronic meters will monitor the occupancy rates, adjust prices when necessary and update all meters on the campus via wireless connection. Adjustments on price will secure some vacancies during peak hours and auto-fill spaces that otherwise would be vacant in off-peak hours (Ison & Rye, 2012). Park pricing creates inequalities; some people may argue. The current parking mechanism prices all parking slots the same price. Park pricing will thus face opposition because of the different prices charged in various parking areas. However, park pricing will prove to be worthy in terms of maximizing parking facilities and minimizing shortages of parking spaces. The Goldilockss pricing system will also encourage students to share vehicles and thus share parking costs and by so doing they will alleviate the parking problem (Todd, 2011). The Goldilockss system of park pricing is not without obstacles. Given abundant supply of parking facilities, it seems impractical to price parking to reduce demand. The University should seek alternatives such as leasing and renting of unused parking facilities. Park pricing, can be costly offsetting huge amounts of revenue. Latest electronic meters will overcome this challenge as they cover large areas, as opposed to older meters. The new meters will also reduce administration costs (Todd, 2011). Works Cited Stephen, Ison, and Rye Tom. “The Implementation and Effectiveness of Transport Demand Management Measures: An International Perspective.” Ashgate Publishing Ltd, 2012. Todd, Litman. “Parking Pricing Implementation Guidelines”. N. p., 2011. UOA. “Motor Vehicle Parking & Traffic Regulations”. Arizona: N. p., 2011. Read More