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Business Officer Magazine

Put On Your Parking Brake

Efforts to green transportation at colleges and universities must start with recognizing the total emissions and full costs associated with current parking systems.

By Karla Hignite

The financial need to cut costs and the environmental need to cut carbon come together in university parking and transit, says Patrick Siegman, a principal with transportation planning firm Nelson\Nygaard Consulting Associates, San Francisco.

The history of parking is such that historical practices at many college and university campuses—and the conventional zoning codes in most cities and towns—are geared toward producing places to which everyone drives. “We have created a parking culture where we expect large lots at every destination to accommodate as many people who potentially want to drive, while simultaneously establishing an expectation that the price of that parking should be virtually free,” says Siegman.

While independent colleges and universities sometimes get trapped by having to provide sufficient spaces to meet the minimum parking requirements in local zoning and permitting codes, public institutions are usually exempt from these rules, says Siegman. Even for independent institutions, local authorities often are willing to waive or lower these requirements for campuses with a solid plan to reduce auto commuting and parking demand. That's because nearby neighborhoods then benefit from reduced traffic impacts. One key to these plans is to implement effective measures, such as residential parking permit systems, to keep campus affiliates from filling up the curb parking on nearby neighborhood streets.

Other significant challenges loom for public and independent institutions alike as they look for ways to reduce their parking footprints. Chief among them is the fact that the total emissions and full costs associated with their current parking systems must be factored in.

Total Emissions and Full Costs

When considering your institution's inventory of greenhouse gas emissions, one important question to ask is: Have you included the building, operation, and maintenance of the campuswide parking system in your calculation of emissions assigned to commuting? Notes Siegman, “For instance, most institutions purchase electricity to light their parking lots, to run the elevators in their parking structures, and to operate the sump pumps to keep groundwater out of their subterranean garages. However, quite commonly, those emissions are inexplicably considered unrelated to the parked cars that make the parking facilities necessary.”

From a financial standpoint, says Siegman, most institutions likewise don't charge parking fees that actually cover the full cost of building, operating, and maintaining the campus parking system—let alone provide any surplus that could be used to help cover the cost of other transit programs. “In our experience,” he says, “the cost of building, operating, and maintaining a paved parking space is at least $360 per year, and often higher.” If you don't charge sufficient parking fees, explains Siegman, you have to ask: “Where did the money come from to build the campus parking lots?” and “Where does money come from currently to cover the substantial ongoing costs of lighting, sweeping, repaving, and patrolling the lots?” The costs of issuing permits and enforcing campus parking regulations must also be considered.

In all likelihood, other campus funding sources have been—and probably continue to be—involved in funding the campus parking system, argues Siegman. “This is a pretty typical situation, where all kinds of cross-subsidies occur, leaving people confused about the real cost of parking and the actual dollars required to create and sustain a parking system.”

A good case in point is the often “invisible” subsidy of the many acres of land that institutions provide in the way of surface lots to drive-alone commuters, explains Siegman. “Interestingly, once campuses get into this situation, where they have historically provided valuable land free of charge to anyone who brings a car to campus, this often becomes seen as an entitlement, and universities then adopt policies that require any building placed on the land to pay a 'replacement parking fee,' which is then used to offset the cost of parking structures.” Since these policies rarely are well known, it's generally not recognized that, while some share of parking fee revenue may go to help support transit programs, large subsidies—of either free land or dollars from other campus funds, or both—often support the parking system, explains Siegman.

What some also don't realize is that a parking structure—often built to replace surface lots—can easily cost 10 times as much or more per parking space than a surface lot, says Siegman. He suggests that before sinking tens of millions of dollars into a parking structure, do the math.

Average, Marginal, and Life-Cycle Costs

Siegman advises to first distinguish between average and marginal costs for parking. To determine average cost, tally the expenses associated with all parking and then divide that sum by the number of parking spaces on campus. The marginal cost is the expense required to add one more parking space. “Those are often two very different costs,” says Siegman.

The next step is to determine the life-cycle cost of adding spaces to your parking inventory. The cost calculation for a new parking structure is not dissimilar to figuring out the cost of a mortgage on a house, says Siegman. Consider the following example:

A structure that creates 1,000 spaces at a total cost of $35 million translates into roughly $35,000 per parking space. If the university issues bonds to pay for the debt, assuming a 35-year loan at a 6 percent long-term interest rate, you would arrive at an annual debt service of roughly $2,400 per space per year. That would come to $9 per space per workday. What is still missing from this figure is any associated operational costs to maintain elevators, electricity, lighting and sweeping, security, and parking gates and enforcement officers, notes Siegman. Let's say that adds another $500 per space per year. The total now rings up to something like $11 per space per workday.

“The basic message here is that any alternative transit option you can offer that costs less than this daily parking cost will save your institution money,” says Siegman. The reason it is so important to figure out the life-cycle costs to build and operate a parking structure is so you can fairly compare the costs of all transportation options, says Siegman. “When institution leaders do these comparisons, they often begin to understand how incredibly cost-effective alternative transit programs are compared to continuing to subsidize campus parking.”

Also, new parking projects typically require very high capital costs upfront and then routine operating costs for the next 30 or 40 years until it is time to rebuild. By contrast, alternative transit programs tend to have few upfront costs but sometimes substantial ongoing operating costs, as is the case for providing a monthly city bus pass, for instance, notes Siegman. “One great thing about alternative transit programs is that you can test them out at a relatively low cost. Then if they don't work, you can eliminate them or rework them to make them more effective,” argues Siegman. “However, once you sink a large share of capital into a parking structure, you are stuck paying for it for the next 30 or 40 years.”

Drive Down Demand

Siegman asserts that if more colleges and universities adopted a policy that parking had to be built and operated by private entrepreneurs and would receive no subsidy from the institution, there would be a near moratorium on the construction of new parking structures on higher education campuses. The real cost of that parking would dramatically reduce demand, says Siegman. “Especially as institutions face the prospect of new limits on greenhouse gas emissions, you have to ask whether making a 30- or 40-year investment in the least sustainable transportation mode makes good fiscal or environmental sense,” he adds. “In addition to estimating emissions related to commuter driving miles, what sometimes gets left out of the equation is the carbon impact from building and operating parking lots and structures in the first place.”

Obviously the need to retain some parking on higher education campuses won't go away, but there are some pricing strategies that can be employed to drive down demand for those spaces, notes Siegman. For example:

  • Give every employee a set dollar amount as a transit benefit. This moves away from providing a transportation subsidy only for those who drive and makes the benefit available to everyone. “No one is penalized, and it encourages behaviors like carpooling and taking mass transit,” says Siegman. “And for employees who walk or bike to work, that's money in their pockets.”
  • Consider selling daily or hourly parking permits instead of monthly or annual passes. “Some institutions price annual permits at a much lower daily average cost than the price of their daily permits, and that creates a system that encourages people to drive as much as they can, since after a certain number of days, they aren't paying any additional cost,” notes Siegman. Institutions that have gated lots with access cards can set it up so that employees start with a preloaded transit allowance that gets deducted for every day they use the facility.

“The good news is that when you structure parking in a way that encourages greater use of alternative transportation options, you can make significant and rapid changes that reduce your overall parking demand,” says Siegman. “The least expensive parking to provide may be paying employees to leave their cars at home.”

KARLA HIGNITE, Kaiserslautern, Germany, is a contributing editor for Business Officer.

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