Douglas Kolozsvari and Donald Shoup point to the potential benefits from pricing curbside parking so as to effectively ration access. They point to reforms in the Old Pasadena neighborhood of Pasadena, California, that combined: (1) an increase in curbside parking meter charges, (2) earmarking of the meter revenues for investment in the neighborhood in which they are raised, (3) under the supervision of a neighborhood committee.
In the absence of the reform, underpriced curbside parking spaces are a common property good. Creation of a neighborhood committee of residual claimants able to influence the curbside parking price, and the use of the revenues, simulates privatization of the resource. Kolozsvari and Shoup attribute the rehabilitation of the Old Pasadena neighborhood to this approach: "Turning Small Change into Big Changes" What's the neighborhood's optimal charge for curbside parking?:
"...The right price for curb parking is the lowest price that keeps a few spaces available to allow convenient access. If no curb spaces are available, reducing their price cannot attract more customers, just as reducing the price of anything else in short supply cannot increase its sales. A below-market price for curb parking simply leads to cruising and congestion. The goal of pricing is to produce a few vacant spaces so that drivers can find places to park near their destinations. Having a few parking spaces vacant is like having inventory in a store, and everyone understands that customers avoid stores that never have what they want in stock. The city should reduce the price of curb parking if there are too many vacancies (the inventory is excessive), and increase it if there are too few (the shelves are bare).
Underpricing curb parking cannot increase the number of cars parked at the curb because it cannot increase the number of spaces available. What underpricing can do, however, and what it does do, is create a parking shortage that keeps potential customers away. If it takes only five minutes to drive somewhere else, why spend fifteen cruising for parking? Short-term parkers are less sensitive to the price of parking than to the time it takes to find a vacant space. Therefore, charging enough to create a few curb vacancies can attract customers who would rather pay for parking than not be able to find it. And spending the meter revenue for public improvements can attract even more customers..."
I learned about this from Peter Gordon: "Free parking".