Saturday, March 17, 2012

The People's Republic of San Francisco Discovers Supply and Demand Pricing...

...for parking meters.

NYT reports:
San Francisco is trying to shorten the hunt [for a parking space] with an ambitious experiment that aims to make sure that there is always at least one empty parking spot available on every block that has meters. The program, which uses new technology and the law of supply and demand, raises the price of parking on the city’s most crowded blocks and lowers it on its emptiest blocks. While the new prices are still being phased in — the most expensive spots have risen to $4.50 an hour, but could reach $6 — preliminary data suggests that the change may be having a positive effect in some areas.

Change can already be seen on a stretch of Drumm Street downtown near the Embarcadero and the popular restaurants at the Ferry Building. Last summer it was nearly impossible to find spots there. But after the city gradually raised the price of parking to $4.50 an hour from $3.50, high-tech sensors embedded in the street showed that spots were available a little more often — leaving a welcome space the other day for the silver Toyota Corolla driven by Victor Chew, a salesman for a commercial dishwasher company who frequently parks in the area.

“There are more spots available now,” said Mr. Chew, 48. “Now I don’t have to walk half a mile.”
Of course, SF does have a mental block when it comes to supply and demand pricing and the housing market. Rent controls (and other rent regulations) have created a huge shortage of apartments and a major lack of apartment upkeep in many sectors of SF. Parts of the city look like a war zone, and it is in fact a sort of war, a war on free markets.

Mark Perry reports:
The Bay Citizen -- "In San Francisco, one of the toughest places in the country to find a place to live, more than 31,000 housing units — one of every 12 — now sit vacant, according to recently released census data. That’s the highest vacancy rate in the region, and a 70 percent increase from a decade ago."
The reason? The city's pro-tenant, outdated rent control laws that make it difficult to raise rents or evict a tenant.   
"Increasingly, small-time landlords are just giving up, like one who has left two large apartments on the second and third floors of her building vacant for more than a decade, after a series of tenant difficulties. It’s just not worth the bother, or the risk, of being legally tied to a tenant for decades.  
“Vacancy rates are going up because owners have decided to take their units off the market,” said Ross Mirkarimi, a progressive member of the Board of Supervisors. He attributes that response to “peaking frustrations in dealing with the range of laws that protect tenants in San Francisco that make it difficult for small property owners to thrive.”


  1. This reminds me of a personal anecdote: As a Catholic school kid in Morristown, NJ, local citizens had issues that our private school used public school busing (our parish was poor; many are now defunct). My father organized other parents to march on town hall and argue that parents who chose private school still had to pay the taxes for public schools. Simple, right? We won that very small battle in the war against statist control freaks.

  2. While I think it's great that they are going to market price their parking meters, I seriously doubt that they will let private companies open up parking structures so as to increase the supply of parking that is so obviously lacking given the exorbitant prices. Given what I know about San Francisco zoning laws and anti-auto ways, there is no way that will happen. The only reason San Francisco is doing this is to raise government revenues while continuing to punish drivers for not being "green." This proposal is nothing but a price hike if supply is exogenous-ly limited by fiat.

  3. SF has the highest apartment vacancy in any metro area, because the rental laws are so fucked up.

    They will never truly understand supply and demand.


  4. Economics law are always the same.

    Mark Perry's report is just what H. Hazlitt wrote in Chapter XVIII of Economics in One Lesson, sixty years ago.