Category Archives: Economics

Parking Building Economics

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If the value of a car parking space is greater than the cost of supplying the car parking space then private investors will provide parking. Should politicians use ratepayer or/and taxpayer money to subsidize and/or oversupply car parking, the value of a car parking space will fall, but the cost will not.

This post is based on parking building economics as explained in 1973 as an appendix to the Traffic management plan for Hamilton.

To try make this relevant in today’s money the Value in [$—] is in today’s money as per the Reserve Bank Inflation calculator, using the following settings.

Category – General (CPI)

Date of cost above – 1973 Q1

Date for comparison – 2017 Q1

Traffic Management Plan for Hamilton Report No.3 – Central Business Area (CBA) Off-Street Parking – REF 0711 730 993 115 1 HAM – April 1973

Appendix II – page 16

Parking Building Economics

The following is an approximate estimate of the economics relating to the construction of a 500 car parking building within close proximity to the city centre as suggested in the Transportation Study Planning Report.

  1. Cost

(a) Capital Cost

A parking building will cost about $2,500 [$31,030] per car space (excluding land). A 500 space building would therefore cost $1,250,000. [$15,515,845]

(b) Operating Costs

It is envisaged that operating costs and costs for such items as maintenance, lighting and insurance would be in the order of $75,000 [$930,950] per annum.

(c) Annual Costs

Annual cost of a building would be:-

Loan Charge and servicing (10% p.a) $125,000 [$1,551,584]

Operating Costs                                        $75,000 [$930,950]

Total $200,000 [$2,482,535]

  1. Revenue

The revenue required for a building to be self-supporting with an annual cost of $200,000 [$2,482,535] would be approximately $1.60 [$19.86] per space per day.

To collect $1.60 [$19.86] per space per day, based on a 10-hour day and a maximum operational occupancy of 80%, it would be necessary for the parking charge to be 20c [$2.48] /hour

Note that the existing Central Car Park has an occupancy of 65% and revenue of 45c [$5.59] /space/day (1972/73 receipts)

Now in the real world of this century some of the above costs are not like-for-like:

(1)   The VALUE or COST per car space this decade is more like a third less at about $12 or $20k, giving a 500 space building a cost of $6 or $10 million. – source

(2)   The Annual Cost of servicing a loan at (6% p.a.) = $360k or $600k plus Operating costs of $930k = Total of $1,290 or $1,530k divided by 500 spaces = $2,580 / $3,060 per space per year.

 

(3)   Revenue needed to service a loan of $2,580 or $3,060 per space per year is $10.32 or $12.24 per day. (Based on 250 days)

To collect $10.32 or $12.24 per space per day, based on a 10-hour day and a maximum operational occupancy of 80% it would be necessary for the parking charge to be $1.29 or $1.53 per hour

 

This is pretty close to the cost of parking at the Knox street Parking building.

EARLY BIRD PARKING

$7.00 flat rate
Entry between 4:00am and 10:00am
Exit before 7:00pm

CASUAL PARKING (BEFORE 6PM)

0-1 hour $3.00
1-2 hours $5.00
2-3 hours $7.00
3-4 hours $9.00
4-5 hours $12.00
Daily Max $12.00 (12 hour ticket)
Lost ticket $20.00

EVENING PARKING (AFTER 6PM)

$5.00 flat rate

SATURDAY AND SUNDAY

$5.00 flat rate

Crawshaw, Brymer census area bright spot

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In the Crawshaw/Brymer area, Mooney Park neighbourhood stands out as a bright area: it has population growth; it is close to schools and has plenty of leisure areas, which is attracting young people whose incomes are increasing at a rate above Hamilton’s average, between 2001 and 2013.

Mooney Park

Mooney St is one of the closest residential areas to Wintec’s Avalon Campus (2.2km 10min cycle 25 min walk) and the large employment areas between Avalon Dr and the railway.

Crawshaw Brymer Pop Change 01-13 Crawshaw Brymer Age Change 01-13  Crawshaw Brymer Income Change 01-13

It is notable that the Brymer area (lower area of image) has double digit population growth. The new residents tend to be older, with higher than average incomes, which is nice. However, these incomes are not increasing at the same rate as the average person in Hamilton city or Crawshaw. The local parks are very good, but the area has limited land use diversity, reducing the long term attractiveness for younger people. Let’s say Brymer has Location (accommodation), Location (parks), Location (something maybe missing at this point).