Smart parking systems can reduce congestion and save the City of Houston $4.4 million per year.
Texas A&M review of smart parking management.
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United States

Finding the Value of Urban Parking: An Analysis of the Impacts of Smart Parking Systems on Congestion and Land Values in Downtown Houston

Summary Information

Researchers from Texas A&M Transportation Institute (TTI) examined smart parking, a parking management tool that helps drivers efficiently find and pay for available parking by knowing where they will park before reaching their destination. Smart parking can reduce congestion and spark property redevelopment as land values increase and parking demand patterns change.

The analysis conducted in this report is divided into two sections: congestion mitigation from smart parking systems and value added and revenue estimation. To estimate congestion benefits of a smart parking system, researchers used the results of SFpark and other similar systems integrated into TTI’s sketch planning tool for congestion benefit estimation, the Future Improvement Examination Technique (FIXiT), to help estimate the benefits a smart parking system would provide to downtown Houston. FIXiT uses a variety of data sources, which provide speed values and average daily traffic, to estimate benefits from the implementation of a congestion mitigation strategy such as a smart parking system. To determine the benefit a smart parking system would have for the entire road network system around downtown Houston, researchers used the most current speed, volume, and delay information from the "Texas 100 Most Congested Roadways" database.

Using the roadway network, researchers calculated person hours of delay for both the freeway and non-freeway segments. The FIXiT tool then uses the following equations to calculate congestion benefits in terms of overall delay reduction and congestion cost savings in dollars.

  • Delay Reduction = Delay Benefit (4 percent) * Person Hour Delay (by road system type)
  • Delay Savings = Delay Reduction * Houston Cost of Congestion ($22.50 per person hour of delay)

For the value added and revenue estimation portion of the study, researchers used a form of Tax Increment Financing (TIF) to capture the value of the redevelopment of large surface parking lots. As demonstrated by occupancy rates of existing parking facilities and estimations of smart parking effectiveness in downtown Houston, the introduction of a smart parking system may cause a shift in land use for large surface parking lots. As such, these parcels were identified as likely to redevelop to a higher value use, and the establishment of a TIF district was identified to be the most suitable form of value capture to use.

For estimating value added and revenue, researchers identified parcels that would most likely be redeveloped due to market changes using the parking inventory database. The next step in the process was to determine an estimated redevelopment value. Assessed values (2017) of the various land uses within the Central Business District (CBD) were used to create an estimated assessed value per improved square foot. In addition to assessed value per improved square foot, it was also necessary to determine the number of floors for each land use. As the data for the surface parking only provides a land area, it was necessary to multiply the land value by a multiplier to determine estimated improved square foot for each land use.

  • Though implementation and maintenance costs were not estimated, study results estimated about $4.4 million per year in congestion savings for the City of Houston if a smart parking system were to be implemented.
  • The potential value of redevelopment of surface parking in the analysis area ranged from $82 million to $722 million, based on a variety of different land uses. The estimated additional annual tax revenue from increased property values was estimated between $575,000 and $4.7 million, depending on the new land use.

Finding the Value of Urban Parking: An Analysis of the Impacts of Smart Parking Systems on Congestion and Land Values in Downtown Houston

Finding the Value of Urban Parking: An Analysis of the Impacts of Smart Parking Systems on Congestion and Land Values in Downtown Houston
Publication Sort Date
Huntsman, B.; P. Lasley; and M. Metsker-Galarza
Transportation Policy Research Center
Other Reference Number
PRC 17-88 F

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