Thursday, January 10, 2013

Hidden Costs

I was shopping the other day, and a transportation and land-use question popped into my head.

I was at one of the big box stores when I told the cashier that I had my own bags and wouldn't want more plastic bags. She scanned a code that gave a five cent discount per bag. The premise, from the store's perspective, is those who use their own bags are saving the company bags, and therefore aren't charged the amount of the bags.

In turning this around to transportation policy, what happens to transit users who don't use their parking lot? The store either owns the lot and pays for construction, maintenance and taxes, or leases the property from an entity that pays for for construction, maintenance and taxes and that cost is included in the lease. Either way, that cost isn't going to be a sunk cost to the store. That is passed on in the price and is paid for by consumers. That's okay if you actually use that service.

But in the case above, my wife and family took the train there. Yet we still paid for the parking space.

Cars are virtually the only thing that gets a pass. There are so many hidden costs such as this. Some economists have pegged the hidden cost/subsidy of a gallon of gas at 6-10 dollars. City taxes are derived primarily from property and sales taxes, regardless of whether the payee uses or owns a car. Free parking, as I briefly describe above is paid by any customer. Increasingly, the federal gas tax is coming up short on highway funding, so the general fund is being tapped. In fact, as highways become more expensive, regional planning agencies are getting creative in getting the money.

This is also why I am a fan of tolling roads. It shifts the cost from hidden into the open. There has to be a lot of changes at so many levels to shift this. I think the start has to be from ubiquitous city zoning codes with their origins in the 1950's to be abolished in favor of a market-based strategy pioneered by Donald Shoup. I think that alone will solve much of the negatives associated with auto-centric land-use and development.

1 comment:

Ken Duble said...

I've uploaded your post onto my neighborhood's Facebook site as well as my own. If you aren't my Friend yet, we'll see if we can make that happen.