Recently, KPMG released a report that Toronto has approximately a million non-resident parking spots. Is this space being put to the best use?
A recent article by the Torontoist argued that there should be a commercial parking levy to discourage the continued development.
There are other cities that have introduced a commercial parking tax including Montreal, Sydney and Melbourne. Montreal has had one since 2010 and it generates $23 million in tax revenue annually.
This would have pretty large impact on commercial development in the city, so we take a look at the pros and cons:
Pros:
It would be a substantial amount of money for the City of Toronto.
- KPMG looked at three different options with a levy at $0.50, $1 and $1.50 per day per space – the net revenues ranged from $171 million to $535 million per year. This money could be allocated to allow the TTC to avoid transit fare hikes and $70 million in proposed service cuts, and urgently needed repairs and maintenance of our city streets.
It would be easy to implement and administrate.
- The levy is already allowed under the City of Toronto Act and does not require permission from the Province. It could be up and running in as little as 18 months and have low administration costs.
Cons:
It could discourage commercial development in Toronto.
- Last month, we explored the topic of how the Foreign Buyer Tax could affect Toronto’s commercial real estate market. Similarly, a tax on commercial parking spots could discourage developers from building in the city, or exiting companies to expand.
It could add more congestion to the TTC and GO Transit at peak times.
- If parking spots are taken away or there is fewer added to the city, it could put more pressure on public transportation. The Melbourne parking levy found a 6% drop in weekday traffic from 2005 to 2009. While this would be great for the roads, the TTC is very congested during the morning and afternoon commutes.
There are clear pros and cons to this proposal and many grey areas. What do you think would be best for the city in the short and long term?