Manchester Publisher's Note: Parking wise, pound foolish
If parking were a horse, I would have beaten the poor thing to death years ago, but it isnít, and unlike a horse itís still very important to the continued growth of the city.
In his new budget Mayor Frank Guinta requested that city parking be treated as a business of sorts and pay for itself. This would make sense if parking cost the city money, but it doesnít. The city makes more money from parking fines than it costs to administer those fines. It would only make sense if the point of charging for parking were to make the city extra money, and though it is now, it shouldnít be.
In the end, money from parking fines is a very small part of city revenues. The big daddy of income is property taxes, and unfortunately the biggest part of that revenue is residentsí personal homes. Itís those property taxes on homes that upset people the most.
Though it has gotten lost in the debate over the budget and property taxes, the point of building the Verizon Wireless Arena, the ballpark, the parking garages, helping rehab Elm Street buildings and fixing up streets and sidewalks is to increase the value of the cityís commercial property, thereby reducing the dependence on homeowner property taxes.
Commercial property taxes are calculated in a different way than residential property. While your home is valued by the market price of the property and home (or thereabouts), most commercial property is valued based on rents it gets and that is directly related to the strength of the local economy and other associated costs, such as parking.
Itís interesting that while home prices have nearly doubled in the last five years commercial property values have not. In fact, itís not uncommon to find commercial rents still in the $6-a-foot range in Manchester ó lower than in the early 1990s.
However, the news is not all bad. More commercial space is now being rented in Manchester than any time in the last 20 years. Commercial property values are increasing, and as long as they stay rented more money will flow into the general fund, reducing or flattening property tax rates.
This can only happen, though, as long as companies can rent space downtown for rates equal to or less than rates offered in Bedford, Hooksett, Merrimack, Derry and Londonderry. Parking is a big part of that cost.
For example, if a company employs 50 people and has to buy them parking spaces at a rate of $75 per spot, then that company would be paying an additional $3,750 per month in parking fees. That makes renting space in the city more expensive than renting a spot at an office park in a neighboring town.
When those businesses decide not to come downtown or leave, the results are bad for the whole city and especially homeowners. Not only does losing those commercial renters hurt the value of the building they decided to leave, but it also reduces the number of people working in the city, lessening the value of street-level spaces rented by restaurants, retail and other businesses that rely on employees of those fleeing companies.
To make matters worse, city government canít really reduce the level of services it offers as far as street repair, cleaning and trash pickup, and worse, parking costs stay the same. The result is an increase in property tax rates, hurting homeowners the most.
Charging more for parking will only cause property tax rates to increase, and that in the end will cost homeowners a whole lot more than theyíll make from an increase in parking fees.
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