Montana Department of Transportation

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Montana Transportation and Land Use

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Development Exactions and Incentives - Density Awards and Bonuses

Financing Tools - Financing Districts - Parking Benefit Districts

What is a Parking Benefit District?

The establishment of "parking benefit districts" can serve as a financing tool to support improvements in downtown areas while also addressing traffic congestion and parking constraints. Within a parking benefit district, public parking spaces (both on and off-street) are charged an hourly rate designed to keep approximately 15 percent of parking spaces vacant. Funds collected from parking charges are poured directly into improvements that make the district more attractive, such as sidewalks, landscaping, and other amenities or aesthetic improvements. In addition, traffic congestion in the district may be reduced by as much as 30 percent because downtown shoppers and employees will no longer need to circle block-after-block in search of vacant parking spaces. New parking meter technologies have improved customer convenience (customers can pay remotely by credit card or cell phone), increased pricing flexibility (rates can be changed in real-time based on location, time of day, day of week, or level of occupancy), reduced streetscape clutter, and reduced operating costs.

Who can implement it?

Local governments are typically the implementing agency. A proposal for a parking benefit district can be initiated by community groups such as a downtown merchant's association or an urban neighborhood whose streets fill up daily with spillover parking from downtown employees and shoppers.

What are the keys to success and potential pitfalls?

Education and Involvement of Local Businesses: Local businesses may initially resist the idea of parking benefit districts if they think that free on-street parking is essential for them to compete with suburban shopping centers. Addressing these concerns involves a two-part discussion. First, downtown businesses must understand and promote the unique qualities that make their location a more pleasant and attractive place for strolling, shopping, and dining than shopping malls surrounded by a sea of asphalt. Second, they should be closely involved in developing plans for the use of the funds generated by the parking meters, all of which are dedicated solely toward improving the attractiveness and accessibility of their district.

Planning, Administration, and Documenting Use of Revenues: A Parking Benefit District requires staff support from local financing, planning, public works, and/or economic development agencies. Once in place, the revenue collection process should be fairly easy, but it is important for the locality to allocate some staff resources to make sure the community knows how the funds are being used.

Where has this strategy been applied?

Examples in Montana

  • To date it does not appear that any Parking Benefit Districts have been established in the state of Montana.

Examples outside of Montana

  • The City of Austin, Texas, established a Parking Benefit District in July 2005 in an area known as "West Campus." The need for such a district was generated by residents concern about "spillover" parking from nearby commercial and educational establishments. The revenue from the parking meters in the district are used for constructing streetscape improvements, such as improved sidewalks, crosswalks, transit shelters, bike lanes, curb ramps, and street trees, which help to improve the pedestrian environment as the residential density of West Campus increases. Residents receive permits for themselves and their guests that exempt them from having to pay for parking in the District.
  • Since 1993, the City of Pasadena, California, has used funds from parking meters to revitalize the historic "Old Pasadena" district. One of the initial reasons for the meters was to increase turnover and control occupancy of parking spaces, but the program has yielded many more benefits by providing a dedicated funding source that turned the business community around. Parking revenue has been used to purchase street furniture, street trees, and historic lighting fixtures, and improving sidewalk maintenance. Installing the parking meters was not politically palatable until the City agreed to invest the parking revenue back into Old Pasadena.
  • Washington, D.C., established a pilot parking district program in 2008 to encourage walking, biking, and transit use, increase retail parking availability and turnover, reduce congestion, and reduce the impact of neighborhood spillover parking. While 20 percent of the revenue will go to the DDOT's general fund, the remainder can be used for pedestrian, bicycle, and transit infrastructure improvements.

How can I get started?

  • Early outreach to businesses and neighbors is an essential first step to establish Parking Benefit Districts. Businesses in particular will need to be convinced of the benefits of charging for parking, both in terms of the higher turnover and increased parking availability for their customers, and in the ability to reinvest parking revenues to improve the local area. The boundaries, pricing level, and other parking policies must be considered and a new or amended parking ordinance will be needed to implement Parking Districts. While it may be politically preferable to start small in terms of district size and pricing, care must be taken to ensure that the continued presence of convenient free parking near a proposed district does not undermine the long-term viability of the District. Once the first Parking District is implemented, staff will be responsible for managing the operations and allocating revenues towards the desired improvement projects.

Where can I get more information?