A Tax on Parking Spots?

Cody Hoesly

As Steve Duin recently reported, several former Portland City Council members have signed a letter asking the Portland Development Commission to consider taxing parking spaces.  This is an idea I support.  Here are some thoughts on how such a plan could be implemented.

First, we should encourage people to use public transportation (or bikes or feet) instead of their cars.  A tax on the parking spaces required for cars would make driving more expensive, and therefore provide a useful incentive not to drive.  That brings the benefits of cleaner air and environment, a better quality of life, etc.

Second, recognizing that there will always be cars no matter how many people use public or self-powered transportation, we should be sure to allow for sufficient parking.  But we should do so in a manner that limits the footprint of parking spaces so that there is still plenty of room for business, housing, and parks.  That is why I propose a progressive tax on parking spaces based on their footprint.  A street-level parking space would be taxed more highly while the upper- or lower-floor spaces in a parking garage would be taxed more lightly.  This will encourage the building of multi-story parking garages.

Third, the law should apply statewide, not just in Portland.  A Wal-Mart, for instance, would have an incentive to build a parking garage near public transportation lines instead of a gigantic concrete parking lot in the middle of nowhere.  Even rural towns should have an incentive to build vibrant downtowns.

Fourth, this proposal would boost Oregon's economy.  At Bridgeport Village, for instance, the existence of a parking garage creates more space for businesses to locate near peoples' cars.  With more businesses in a concentrated area, people will do more shopping, then they will be more likely to stick around for a coffee, a browse through the bookstore, a movie, or dinner.  This is better for business than the situation at, for instance, Argyle Square in Wilsonville, which has vast stretches of parking lot between stores, restaurants, and other businesses.

Finally, the money collected could be dedicated to building more public transportation, improving existing streets, etc.  This would make Oregon more accessible, improving our economy and quality of life even further.

Comments

  • Nigel (unverified)
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    Why don't you just outlaw cars in the city centre, like the City of London does?

    Be done with them straight up.

    Taxing parking spaces, eh. Next you'll be suggesting taxing petrol and some such nonsense.

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    Be careful lauding the parking at Bridgeport. It's a freaking NIGHTMARE most days. Employees can't even park anywhere on the lot; they must take a shuttle bus from a satellite lot. !!!

    The centralized plazas are very nice and do encourage mall-like browsing--but Bridgeport is succeeding decidedly despite the parking situation, not because of it.

  • ws (unverified)
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    Duin's article was fascinating by way of revealing the object behind the idea of taxing parking spaces; not so much to reduce space wasted to park cars, but to make Greg Goodman's parking lot empire less productive, so he might be more inclined to sell off some of his lots on 2nd Av for development.

    Taxing parking spaces sounds o.k.. Above groud parking structures should't be given a break though. They're really more wasteful than surface lots. Underground parking is where a break from parking space taxes, if they came to be, might encourage developers to build more underground.

    Bridgeport Village...what an expendable novelty. Not a village at all. You can't live there. It's addicted to cars. Forget the parking space tax. Limit their maximum parking capacity. Encourage them to underwrite mass transit development and in the interim, shuttle patrons from various points in their neighborhoods to eliminate car trips.

  • peter (unverified)
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    actually, they both make good points.

    the height restrictions (75', i believe, along the willamette) probably ought to be relaxed a bit. at the cost of land downtown, i have trouble seeing new construction at that scale being economically feasible.

    a parking space tax is probably not politically viable, especially when you start complicating things by making exceptions for underground, and above ground spaces. what your goal really is here is to make underdeveloped lots more rare. empty lots in urban downtowns are almost always used for parking spaces, because it's a great way to pay your property tax while speculating on rising land values (especially when property tax increases are limited by law). a better approach would be to levy a site value tax on the unimproved land value of a piece of real estate. better yet would be to offset that tax by reducing rates on the capital portion of the property (revenue neutral, of course).

    basically, this would be a dual rate property tax, with a higher percentage on the land than the building. that might require some tweaking of state law, though.

  • Jimbo (unverified)
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    Good Lord, what won't the Socialists in Salem think of to tax next?

    Why not try living within the means of an efficient, conservative state budget?

  • Steve Bucknum (unverified)
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    Here we go again. Portland has a problem, so let's solve it for the entire State.

    Taxing parking spaces? Put that to a Statewide vote, and you do not have a snowballs chance -

    However, if it is a valid solution to the problems you have in Portland - anything that limits traffic and your horrible pollution problem that results from auto traffic has to be considered a good thing - then do it. But do it in Portland. Leave the rest of us alone until you propose to solve a problem we have.

    Cody, we don't have a Wal-mart in this 3,000 square mile County (thank the powers above), and we don't have "major transportation lines". We are over 100 miles from the nearest Interstate freeway, we don't have light rail, and that little mini-bus that comes through Prineville twice daily hardly counts as a bus line.

    While your idea has merit - in Portland - please think before you write a little more.

  • lin qiao (unverified)
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    I think we need to get Nigel from London onto Prineville's transit and parking problems, as he obviously has pertinent experience, but let's warn him not to use terms like "petrol" with the folks in eastern Oregon :-)

  • Anonymous (unverified)
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    "Why don't you just outlaw cars in the city centre, like the City of London does?"

    Just to be correct: I used to fly to London all the time. Cars are not outlawed in the city centre. They pay a fee to drive in the city centre. I do not know how successful this has been.

    Cars are, however, not permitted in the center of Amsterdam. Vehicles park outside the city center and either walk, bicycle or take public transit into the center of the city.

    I am neutral to the idea of taxing parking. Personally, I think that parking downtown is already stressful enough and I haven't owned a car in 15 years. I think that taxing parking would not discourage those with big SUVs from parking downtown whatsoever and would harm those with smarter, smaller, more eco friendly cars who should be more welcome.

    I think that there should be incentives given to those that choose to use mass transit (like the fareless zone), as well as a tax credit for those that buy fuel efficent cars. While the FEDs have a one time tax credit for buying a hybrid car, this is just that.... ONE TIME.

    Just my take.

  • Chris McMullen (unverified)
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    "Bridgeport Village...what an expendable novelty."

    Feh. A novelty built without subsidy, employs many and is wildly successful. It's pretty sad you find find fault in pragmatic retail development and personal freedom, ws.

    Oooh, those evil capitalists just burn you up, I bet.

  • TR (unverified)
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    Start with making legislators pay for their own parking, from their own pockets and not from their daily legislative expense stipend. Then tax bicycle racks, bicycle lockers and bicycle parking too, along with a hefty priced bicycle license, registration and tax so bicyclists pay their fair share for bicycle infrastructure instead of the costs being pilfered from and relying on drivers to pay the bicyclists way. Next increase mass transit fares so the ridership pays for the full costs of the highly taxpayer subsidized service.

    Adding a new tax on parking spaces is nothing more than a socially engineered anti-business proposal. How many legislators have the expertise of a CEO and understand the needs individual and unique businesses? Landowners already pay property taxes on their property. The tax code should NOT be used for social engineering purposes. People vote with their choice of mobility. This proposal will only raise the costs of goods and services for everybody and congest neighborhood streets with more parked cars. When I registered as a Democrat, it was the party of the working people. The leftist wing of today has become the party of socialist dictatorship, full of trolls that want to appropriate freedoms and exercise control over lifestyle choices of the people.

    Additionally, I just wonder how many of the wealthy trolls that attended Governor K’s $100.00 per plate/pay for access inaugural ball actually arrived by transit or bike. It is as if the party well-to-do simply want lower income people and the declining middle class off the roads to give themselves more room for their luxury motoring pleasures.(Like Ted's state owned big Lincoln)

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    Aren't we kind of getting ahead of ourselves here?

    We still have zoning regulations that force developers and businesses to build parking spaces. Doesn't it make more sense to start with reducing those requirements before we start taxing something we are forcing people to build?

    In my neighborhood we have a HAP property right next to a light rail station. It was originally planned to have a nice play area/structure in the middle that could be seen from most apartments so the kids could play where their folks could keep an eye on them. The play structure got sacrificed because they couldn't provide the parking spaces the zoning requires economically enough except by paving over almost all the available space. Most of those parking spaces are empty most of the time.

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    The developers could have asked for a waiver to save the play area/structure. We have four story condo/mixed use buildings popping up all over SE with NO parking requirements. And even the requirement for a loading zone seems to be getting rubber-stamped out of existence.

  • Steve (unverified)
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    "a progressive tax on parking spaces"

    Uh, where is there free parking downtown. I think every space is metered already.

    You realize when all of the bus mall and rail tracks get laid down downtown will be impassable for cars anyways. Then we can abaondon downtown to the homeless and goverment employees.

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    Bridgeport Village... A novelty built without subsidy

    Seriously, are you merely pretending to be ignorant - or actually ignorant?

    For starters, the city, county and state made "significant roadway improvements." From the City of Tualatin's website:

    Significant roadway improvements will be made to Bridgeport Rd (Boones Ferry Rd to 72nd Ave), Lower Boones Ferry Rd (Hazelfern Rd to 72nd Ave), and the Lower Boones Ferry Rd and I-5 ramps. 72nd Ave will also be relocated approximately 150 ft. to the west. The Village Inn will be relocated to the NE corner of the 72nd Ave/Lower Boones Ferry Rd/Bridgeport Rd intersection.

    Even our right-wing pal Rob Kremer acknowledges all that:

    When it was in the planning stages, all the naysayers said that adding 800,000 square feet of retail space in that area would create a crisis in an already troubled intersection. So they upgraded the intersections and roads around the center. The improvements were very well thought out.
  • ws (unverified)
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    What's the present official reason supporting the 75' height limit? Maybe it's there for a good reason. I can just imagine people turning their noses up at Goodman when he started buying up all those surface parking lots way back when, except he's been looking pretty smart for quite a while now, and some people are bitter. He's got a good, smart business thing going. Is it fair for him to be coerced by a parking space tax to offer up his lots for development, mostly because a few irked neighboring property owners dont't feel like they're making as much money from their property as they believe they would be if spiffy new buildings were their neighbors instead of parking lots?

    Underground parking spaces shouldn't be taxed at all. In terms of parking, nothing except the complete absence of space devoted to parking frees up land for development more. Surface parking lots might be seen by some as mostly a low-buck way to position for land speculation, but from the practical standpoint of transitional use, they make far more sense than an above ground structure. Nothing to knock down once you decide to put up a quality building.

    Why didn't Bridgeport build underground parking instead of surface and a parking structure? Because both of the latter cost less. Now if there were a pretty strong tax on parking structure parking spaces, that might have been an incentive to drum up the capital to build underground. Sure below grade is more expensive, but how much? In the long run, it would easily have paid off if the village is as popular as some probably have found it to be. (note; bridgeport might not have been able to build underground parking because of the brownfield situation, but otherwise...)

  • Lee (unverified)
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    There is already a tax on parking spaces. It is called "property tax".I won't list all the other subsidary taxes and fees paid for each parking space.

  • Jerry (unverified)
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    Kari: Where in your quote has Tualatin paid for the road improvements for Bridgeport? If my memory is correct, a major portion of road costs were paid by the developer. Where is your indignant outrage that SoWhat transportation projects are not even funded? Where is your outrage that most of the hopefully future funding for the SoWhat transportation projects are from taxpayer's pockets, and hardly any from the developers? At least Bridgeport was mostly a private project without scamming the taxpayers.

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    There is already a tax on parking spaces. It is called "property tax".

    Hmmm...really?

    If we can believe Duin that "A city block containing 200 parking spots probably generates a steady income of $500,000 annually, less insurance and property taxes," what ARE those property taxes?

    Let's take the parking lot between SW Naito and 1st, at Stark. (87 SW Stark, Property ID R246057):

    (Real Market)Improvement Value: $18,480.

    Now, I don't know how many parking spaces this parking lot has, but surely an asset that can produce hundreds of thousands of dollars in revenue every year is worth more than $18,480? OK, sure, the LAND is Real Market valued at $1,446,060, but that land value would hold whether there's a building or a parking lot. The fact is the parking lot is hardly taxed at all for what it is: a parking lot generating beaucoup bucks.

    And thanks to our wonderful ballot measures that have totally distorted the whole property tax system, despite $1.464 million in "real market value"...the actual property taxes on the site are assessed at half that, or $708,400. Property tax bill? $14,264.

    A $14 thousand dollar property tax bill for a cash-cow piece of property, while this property gets held for future speculative value...not a system designed to incent for development. (The "real market value" has nearly tripled from $567,000 to $1.4 million, from 1997 to 2006, while assessed value is capped at a 3% increase each year, so is now at $708,400...)

    Are parking lots paying their "fair share" of property taxes? Of course not.

  • Howard (unverified)
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    Kari, Niether your quote or Kremer's shows that Bridgeport was subsidized. All you have done is show the improvements were made.;Which is obvious. Pretty lazy effort. Or were you deliberate in claiming there was a subsidy when you don't know or even know there was not?

  • TR (unverified)
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    “Are parking lots paying their "fair share" of property taxes?”

    Consider the parking lots and other properties the Portland Development Commission (PDC) takes over using public dollars. Some fat cat developer comes along and PDC gives away the property at below market value. Then after this developer has jumped through all the social engineering hoops, the Portland City Council grants a property tax waiver for ten years or more called a tax abatement. While the original parking lot owner was paying for city services like police and fire, and supporting the schools, the new owner of the property (that with development probably requires more city services than a parking lot) is NOT financially supporting any city services or the schools. Therefore other property taxpayers like home owners and parking lot owners must make up the difference with higher taxes because a fat cat developer is allowed to milk other taxpayers.

    It also should be noted the parking lot owner is also paying a business license tax and income taxes on the net profits. The parking lot owner is likely an entrepreneur that started as a small business owner providing a service in the right place at the right time that grew into a larger business. This is the American way, work hard and reap the rewards. On the other hand, the fat cat developer milking the taxpayers for his rewards is a product of the socialist tax abatement policies contrived in the state legislature. Therefore, the answer to the question: Are parking lots paying their "fair share" of property taxes? Absolutely YES. It is the fat cat developer that is not.

  • Chris McMullen (unverified)
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    Kari, are you trying to be deceitful, or is it an innate element of your psyche?

    That intersection needed to be upgraded regardless of whether Bridgeport was developed. It was a terrible bottleneck before Bridgeport ever went in. I know, I drive through it every day.

    I realize you need to grasp at straws when belittling private investment and non-smart growth development, but please, at least try to produce actual facts when doing so.

  • Howard (unverified)
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    Kari, A simple search find this link

    http://www.ci.tualatin.or.us/business/engi/transportation.htm

    Scroll down to "Developer Funds" and bingo! $7-8 million for street and intersection realignment for Bridgeport Village.

  • Jerry (unverified)
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    Kari; I did some inquiries. Your bogus, unresearched claim that the taxpayers paid for the Bridgeport interchange improvements is a far stretch. Who's leg are you trying to pull now?

  • Lee (unverified)
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    Frank; your information on one particular parking lot is factual, and your further analysis seems logical. I think you would agree that the "real market value" and "assessed market value" discrepancy applies to all taxed properties somewhat equally throughout the state. The percentage difference you cite in your example probably is very similar to your own home tax difference. All the property tax payers in the state are getting a "tax break" because of several measures we've passed. Those who may own a parking lot, or even has one parking space to rent should get the same tax break that you are I receive.

    As you have so well documented in other posts, there are numerous commercial properties throughout our city that are taxed very little (Zidell's property in SoWhat), even though the market value sometimes is more than ten times the tax assessed value.

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    TR writes the answer to the question: Are parking lots paying their "fair share" of property taxes? Absolutely YES. It is the fat cat developer that is not.

    In my example, the parking lot owner is Doug Goodman (along with a 5% share owned by another Limited Liability Corp with Chris Kopca's name on it...he now works for Goodman and used to be a project manager at PDC). "Fat cat" is kind of dated, but these are certainly major "players."

    My point was that this asset isn't dirt, it's a gold mine being taxed as dirt. Sorta like the Goodman owned lot up on Oak and Fifth, with its string of fast food "restaurants" filling up parking spaces. There's zero "improvement" value added for "restaurants"...still assessed as just a parking lot with a couple of thousand in improvement value. Gotta wonder what Goodman charges these restaurant "tenants" though. (And he sure didn't get assessed the huge System Development Charges for a restaurant the way It's a Beautiful Pizza's Carl Sandstrom did out on Belmont.)

    Lee writes I think you would agree that the "real market value" and "assessed market value" discrepancy applies to all taxed properties somewhat equally throughout the state.

    Because I'm in a Hawthorne "hot" neighborhood, my "Assessed Value" is approaching 50% of "Real Market." NE Portland, where values have skyrocketed along with gentrification, I've seen 20-25% "assessed" value versus "real". I don't know about outside Multnomah County, but I imagine Bend is different than Joseph which is different than Dayton. It seems a crapshoot rather than a "fair" tax system, especially when these are some of the highest taxes we pay, and so many important services are funded by these taxes. "Somewhat equally" isn't where we're at, I'm afraid.

    When a Tom Moyer throws up a $100 million building, which is immediately put on the tax rolls at $50 million (whose assessed value growth will then be capped at 3% a year regardless of the skyrocketing value of downtown real estate) we've in place not only a regrressive tax structure, but one in which there's less and less a nexus between tax and property value. At some point the system's gonna have a complete meltdown. That I pay moree property taxes on my home and 50x100 lot than Zidell pays for it's barge operations and dozen plus acres of South Waterfront acreage...that's the stuff tea parties are made of.

  • Lee (unverified)
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    Frank, I was mostly agreeing with you. What I was trying to say is that the disparity between "real market value" and the property taxes assessed is a "boondoggle" and worse. This applies to all properties in the state. The variations in the amount of disparity needs to be more uniform throughout a city, a county, and the state. I am not advocating more total property tax revenue, but a more balanced taxation. Your Moyer example, and Zidells are few of the many disparities just in Portland.

  • shannon (unverified)
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    I think taxing parking in downtown Portland might make sense. For the rest of the city, I'd have qualms. As much progress as Portland has made to have great public transportation, it still can be difficult (as in, take hours) to actually pick up the kids and the groceries and get home using public transit. This would hit the working poor hardest, who often live farther out toward the edges of the city and depend on their rattletrap cars to get them around in a timely way.

    <h2>It's tricky to build in all the supports for a non-automobile-dependent society at once, but we do need to be thinking that holistically. And any tax we impose should be truly progressive and not hit those at the bottom of the ladder the hardest.</h2>

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