August 19, 2017


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Meddling with parking will hurt the downtown

Hey there, time traveller!
This article was published 13/10/2010 (2501 days ago), so information in it may no longer be current.

We have now heard from both leading mayoral candidates about their views on downtown surface parking lots. Unsurprisingly, they both recognize that Winnipeg has a large number of them; Mayor Sam Katz even took time to count them -- 140.

Where the two differ is what, if anything, to do about them.

Challenger Judy Wasylycia-Leis thinks the city, through its arm's-length, -- and therefore off the balance sheet -- parking agency, should build mixed-use buildings attached to multi-level parking structures.

The revenue from the parking would then pay for "social and arts spaces" in those buildings.

The mayor suggests that a graduated tax incentive to surface lot owners who build on their land would help reduce the number of lots in the downtown.

A corollary of his theory is that safety and aesthetics would improve with the appearance of new buildings.

His theory is at least plausible. Wasylycia-Leis may have her heart in line with her philosophy, but her short-sighted economics don't work.

Building more multi-level parking downtown isn't necessarily a good thing.

Wasylycia-Leis promises to freeze expansion of surface parking lots, unaware, it would seem, that a policy prohibiting the demolition of existing buildings to create surface parking has been in force for a long time.

There is nothing in Wasylycia-Leis's ideas that shows an understanding of how the parking industry works. They are fine-sounding, ill-researched, pompous pronouncements of how interfering with the marketplace could help downtown.

The city should not be in the business of building parking structures, period. Parking is a commodity with a particularly inelastic nature. It is driven by demand and rarely responds to price adjustment, except when there is oversupply.

To build multi-level parking is very expensive -- about $40,000 per stall. Recovering the debt, insurance, maintenance and taxes on each stall requires almost $300 per month, before profit. That calculation assumes a 30-year mortgage and proper maintenance.

Today's downtown parking rates run as high as $250 per month for enclosed, heated, 24-hour stalls. Unheated open-deck stalls run between $100 and $150 per month depending on location.

Surface stalls run between $65 and $120 depending on location.

Building several new multi-level structures, while eliminating cheaper surface stalls, will drive the cost up as the market responds to demand and supply.

Since parking is relatively inelastic, those who need the spots will pay whatever the market requires, at least in the short term.

Adding significant cost to locating downtown, however, will inevitably drive users away. New office space is already being built predominantly outside of the centre core, largely because of parking costs.

Judy's plan may seem like a good method to create new low-cost social and arts space by paying for it from parking revenues, but over the long term it will drive business away from downtown, which will diminish parking revenues and leave those socially attractive spaces underfunded.

With one new parking garage already built and two others planned, Winnipeg is approaching an oversupply of parking downtown. When that comes, convenience and cost will determine where parkers choose to rent.

Winnipeg has yet to see the effect of full-price parking, and when it does, downtown will suffer.

The proposal to put the Winnipeg Parking Authority in direct competition with the private sector will needlessly interfere with the marketplace.

If the city's track record of maintaining parking structures is factored, the so-called investment looks even more foolish. Just look at the Civic Centre Parkade or what wasn't done to maintain the Winnipeg Square structure.

It just is not as simple as Wasylylcia-Leis believes.

Katz's plan to give property tax breaks as an incentive to redevelop surface lots doesn't offer much to a surface lot owner until revenues start to diminish. Combined with housing capital cost incentives and simplified zoning requirements, however, it may help the marketplace decide that new construction makes sense.

That would benefit downtown.

Surface parking lots exist due to a demand for them and the coinciding obsolescence of the buildings they replaced. They are neither attractive, nor good contributors to vibrant streetscapes. But, they serve a purpose in providing competitive services to those working downtown.

When a plan to replace them includes cogent economic strategy and sound business principles, I will be the first to endorse it.


Hart Mallin is an owner of numerous properties in the downtown, including surface parking lots. A longtime advocate for downtown renewal, he was founder of the Portage Avenue Property Association.


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