The Parking Lot Tax

Picture 2Surface parking lots in downtown Montreal.

As I mentioned in my post last week about the 2010 City of Montreal budget, one of the new measures it includes is a special tax on downtown parking spaces. Two zones of taxation are proposed. Parking lots in central neighbourhoods (defined by Atwater on the west, Papineau on the east, and des Pins on the north) will be taxed at a lower rate. Parking lots in the central business district will be taxed at a higher rate. In both cases exterior surface parking will be billed at a higher rate than indoor parking.

The charges will range from $19.80 per square metre for a surface lot in the central business district to $4.95 per square metre for an indoor lot farther out. The revenue generated from this tax will be earmarked for improving public transit, and the city expects it to make around $20 million dollars per year.

This is a measure long overdue. As the above map shows, surface parking lots take up a significant portion of the downtown area. While the situation in Montreal is not nearly as bad as in some of the Canadian Prairies cities or the US  Sunbelt cities, surface parking is nevertheless very present.

This constitutes an inefficient use of space which is to be discouraged. It promotes an unsustainable car-dependent lifestyle and retards the development of large swaths of downtown. Part of the reason there is so much surface parking is because it is profitable and requires little investment. Why spend tens of millions of dollars constructing (or renovating) a building on your property when you can just throw down some asphalt and start immediately extracting money from it? This new tax will help change the profit calculations of property owners and encourage them to look for other uses for their land.

Of course, some amount of parking will always be needed downtown. A sensible policy would be to gradually replace existing surface parking with more space-efficient indoor parking, while in the process slowly reducing the total supply of parking to encourage all who can take public transit to do so.  The Parking Lot Tax is a good first step towards that vision.

While I am generally supportive of this policy, I question the City’s decision of where to delineate the higher and lower rate zones. The higher rate zone fails to include two key parking areas that are closely linked to the central business district: the sector south of Sainte-Catherine and east of Guy, and the lots around the Bonaventure Expressway. This second case is all the more puzzling given the Tremblay administration’s goal of removing the raised expressway and rehabilitating the surrounding sector. If the area is to be revitalized then the parking lots must go.

In the map below the higher-rate sector is shown in blue, and the parking sectors it excludes are clearly visible.

Picture 3

As to be expected, certain downtown merchants have begun to make a fuss. Many of them are still angry over last year’s increase in parking meter rates, out of the same perennial fear of competition from suburban malls. Tremblay knew that he would take some criticism on this issue, and to his credit he pushed ahead anyway. Hopefully this is a sign of a new willingness to get serious on improving public transit and promoting a pro-sustainability agenda.

22 comments

  1. Excellent! Excellent news! Thank you for publishing this!

  2. The initiative to reduce surface parking has to be applauded. However, I believe that the city lacks a clear Vision for development in it’s downtown core. Most projects are presented as one-offs and debated ad-nauseam, because there is no coordinated and articulated vision of what our city “wants” to be.
    This is a perfect example. It seems to me, that an INCENTIVE to actually DEVELOP the empty sites would be a more appropriate way to go, even in conjunction with a higher tax on parking. Carrot instead of stick.
    Montreal has a sickening amount of empty lots and torn urban fabric in it’s downtown core. The objective is not to encourage use of public transit, that is a by-product. The objective should be to densify the downtown core with a healthy mixed-use of places to work and live, and re-knitting the urban fabric. That is the sustainable alternative to sprawl. After all, the infrastructure is there. And then perhaps merchants would be happier, with 50,000 or 100,000 more residents. Without a vision for development, it remains incredibly difficult to develop today in Montreal.
    A four to six storey mixed use building generates much more than $19.80 per square meter in taxes. If Montreal is truly committed to sustainability, it’s not rocket science : incentivize land owners to develop their empty lots with projects that enhance the city and provide cool places to live and work in the core.

  3. This new tax will help change the profit calculations of property owners and encourage them to look for other uses for their land.

    I’m afraid all it will do is make those owners raise their prices. And in the near future, justify a price hike for street parking too.

    Personally I do prefer parking lots over yet another ugly office tower. At least when it’s a parking lot I can still hope that maybe someday, something nice will be built in that spot. What is appalling when they demolish a nice building, built a high tower in its place while the parking lot surrounding it is still an ugly parking lot. Why not built the high-rise on the parking lot and leave the beautiful building where it was? (Yes I’m talking about Ben’s)

    Anyway, in a few years we might need all that land for agriculture!

  4. Interesting stuff. You note the Quartier Bonaventure project, but I also have to wonder about a good chunk of the area around the Place des Arts having been left out of the high-tariff cordon. Whatever happened to the greater planning of the Quartier des Spectacles, beyond those three or four buildings around Ste-Catherine? I sense a lack of coordination.

  5. Mare, you seemed to have missed one of the major points of the policy – yes, parking prices will (and should) raise sharply, especially for all-parking. This will raise demand for public transport (too many people are driving all the way into the city), driving a “virtuous circle” of public transport growth.

    “Filling in the gaps” is a side benefit (which I think it apparent when you consider the zone set for the higher tax rate).

    Jean-Francois, what did you have in mind by way of “incentive”?

  6. Playing devils advocate here….

    In a city that cannot sustain much new office space, has very restrictive zoning and a bad case of opposing new building projects (lest we forget all the anit-condo rhetoric we always hear) taxing owners of lots does not mean that it will spur construction. We certainly don’t want to force lot owners to develop their lots. That will only result in no architecture, cheap materials, and an ugly urban fabric.

    Perhaps the reason for so many parking lots is that Montreal went through a depression for basically 30 years (much of the lots are the result of demos that took place in the early 70’s) and the Montreal has a much less robust/wealthy tax base than other major cities in NA to support so many new buildings, whatever the use.

    This move is NO silver bullet that improves the frequency of use of public transit. What it does do is hurt the businesses downtown and thus the entire downtown economy: there are plenty of malls in the Montreal region (with a competitive mix of stores and services) with loads of free parking. There is a trade-off that no “leader” ever sees. If we don’t improve economic development get ready to look at parking lots for a lot longer.

  7. @ Jean-François:
    I definitely agree that the city is lacking a clear vision of what it wants for downtown and how to get there. We’ll need a lot more than a parking lot tax to encourage sustainable downtown redevelopment, but at least it’s a start.

    @ Mare:
    I don’t really think that price hikes for parking are a bad thing, especially since the increases will be going to improve public transit and give people coming downtown in cars better public transit options. Something else that’s important to mention is that this tax will hit surface parking lots much harder than indoor parking.

    All parking has negative effects on the urban fabric, but I think parking structures are a better alternative to surface parking. I would much rather have one six-storey parking structure (preferably with shops or offices on the ground floor)that takes up half a block than 3 or four entire blocks of surface parking lots. Presently there aren’t many public parking structures downtown, mainly because they cost a lot more to build than a field of asphalt, but that’s a cost which can’t be passed on to the user. This measure will help partially equalise the costs.

    @ Edward:
    Of course we don’t have the capacity to build on all the parking lots right now. The redevelopment of the sites should be a gradual process that will take decades to complete. We might not have a booming economy, but we aren’t paupers. There is plenty of infill development happening alread. Measures such as the this tax are a good way to try to encourage and direct it.

    Also, buildings that would go on sites that are currently parking lots don’t necessarily have to be huge, expensive office towers. Most of the major sectors of surface parking (around the Bonaventure, north of the Ville-Marie around Chinatown, east of Guy and south of Sainte-Catherine)are mainly surrounded by low-rise buildings. Mega projects in such areas would be not only unnecessary, but also harmfull.

  8. No argument here…. there are a lot of lots to fill. Of course they don’t have to be big flashy office towers… but some nice apartment buildings wouldn’t be so bad… it is precisely those 3 story boxes that seem to get approved that we have to worry the most about. The are such poor quality and frankly, in the downtown core, are too-low density. We should all want well-designed, well-built, quality buildings…. downtown is our showpiece.

    I also believe that we can re-invent certain areas… Guy and Rene-Levesque for example is a vast apocalyptic swath. Saying that a 28 storey hotel doesn’t “fit” the landscape is a ridiculous statement when in fact the landscape is mostly parking lots and fairly large commercial buildings. And it’s RENE-LEVESQUE BOUL>>> this should be the one place we can build with some grandeur. The Victorian neighborhood was decimated (unfortunately). We already got the ball rolling with PVM, CIBC, CCE, IBM…..We can’t re-create the charming 3-4 storey sector. We also need higher density if we care going to ensure the vibrancy of the 24hr, living, downtown core… something Montreal likes to brag about.

    Anyways…the reason building in general does not happen, particularly housing, is that the cost-benefit doesn’t work, based on a myriad of economic factors. There is a price to pay for the low-cost of living that is always touted.

  9. Mare brings up a good point about potential — often the owners of parking lots are speculators. Much as web domain owners will buy a domain and throw up some ads in the hopes that their domain will get bought up someday for much more than they paid for, the downtown parking lot owners had a chance to “get in early” and wait for an eventual downtown tower-building boom.

    Downtown is probably too homogeneous — too many high-density office buildings and supporting commerce. High COS, mid-rise residential buildings and much-needed grocery stores could even out the imbalances and put Montréal on a more sustainable path than cramming in more skyscrapers.

  10. There are also some nasty parking lots on Rue Saint-Urbain that aren’t in the zone, but close enough to downtown to merit punitive measures.

  11. I wonder if the owners of those lots left out of the high-tax zone are buddies of the administration? Looking at the map it appears to be just for show. Get the public to believe that you’re doing something, actually doing something, when in fact you’re doing nothing. An old politicians trick to be sure. Or maybe I’m just paranoid.

    Anyone else reading The Power Broker? I’m seeing Bob Moses everywhere!

  12. Whenever I try to find parking downtown, I end up circling around for twenty minutes while my friends are already drinking their coffees. This has got to stop. We need MORE parking downtown, and not less.

    The other night, a resident near the parking lot I pay five dollars to park in (for an hour!) told me that my horn bothered him when I locked the doors by remote. Doesn’t my five dollars give me the right to safely lock my car with the horn?

    What kind of a BS society are we creating here?

  13. I don’t get the hostility towards office towers in the downtown core. It’s ridiculous. Would we prefer that promoters build their office buildings in the subburb, like in Houston? Bell just moved 600 employees out of downtown to put them in a “office campus” on Nun’s Island, with zero transit. Is that better? Beside, there has been no office tower build downtown for the last ten years, so it’s not like they are multiplying like weeds. Same thing with condo towers. We need MORE, and a lot more, in the downtown core. Density is the key to keep the downtown core alive. Anything is better than a surface parking lot.

  14. Martin Girard: Trying to explain the knee-jerk reaction you seem to be observing… I guess the friction generated by large towers downtown is because so many of them popped up on what used to be amazing streets. Sherbrooke St. is probably the poster child of this:

    Before: http://bit.ly/4BZLIy
    After: http://bit.ly/53ptvM

    Before: http://bit.ly/6AUJQm
    After: http://bit.ly/4oDgx0

    By the time that the preservation movement kicked in, the damage was already done and only individual structures were preserved. The actual streetscape was transformed beyond recognition, even if a few historical buildings were preserved.

    This creates really schizo streets, again Sherbrooke being a great example:

    http://bit.ly/8Uc776

    Contrast that with the way they did things in Paris. They created an entire district of modern glass and steel skyscrapers (La Défense) which includes offices, a vast shopping mall and housing (if you include nearby neigbourhoods). La Défense is not my cup of tea, but at least it’s coherent.

    http://bit.ly/5bTlN6

    I’m sure if someone proposed a new skyscraper (no matter what usage) in La Défense, nobody would yell bloody murder… of course, that’s where skyscrapers are SUPPOSED to go.

    Downtown Montreal is quite a different story.

    Obvisouly we can’t move buildings around, so we have to make the best we can with the current situation… which is build buildings that are appropriate with the current immediate surroundings. (Something politicians really hate, because it’s so much simpler to put a blanket over a large area and call it “Le Quartier des Spectacles!” or “La cité multimédia!” and build whatever kind of building, as long as it has
    a remote connection to the “theme”)

  15. Uh, as much as I dislike parking lots and like beautiful buildings, I really don’t think Montréal’s downtown is that bad you know, especially compared to other downtowns I’ve seen. Sure, we’re no Manhattan, but we’re no Detroit either.

    Despite all these empty lots, It remains fairly compact and very pedestrian-friendly, especially Ste-Catherine which provides endless entertainment and shopping, even in the middle of winter. And the tunnels work very well too — just go any Saturday or Sunday afternoon, when all those office buildings are closed: the malls are full (well, except les Ailes de la mode, the poor thing). And even late at night, you’ll find people wandering the streets looking for fun.

    So as a mixed-use downtown, I think it does very well, even with these damn pesky parking lots (which are greatly appreciated by those who drive into downtown, btw).

  16. All interesting comments and points of view.
    @Mare, my original point about a “vision” was that we do not have to assume developers would build ugly towers, IF THE CITY HAD A VISION.
    And a vision is more than a zoning plan drafted by bureaucrats. It is a clear direction for development. It is a story for the future, and a quality of life. As @Edward mentions, why not decide, as a society, that Montreal is a showpiece.

    I think the greenest thing we can do in Montreal is densify the downtown core. With a healthy mix of more residential product, across all incomes, additional low-rise, human scale office space. And once you “infuse” the downtown core with more places for people to live and work, then you can stop coercing people into not taking their cars. It’s the carrot instead of the stick. It will happen naturally.

    In reply to @William, if you look at the values of the land where those parkings sit, and you figure out, from a developers perspective, what it takes to make a quality development worthwhile, and profitable, you can figure out a certain number of financial incentives to developers. That cost, in the long run, would be negligible in return for a more pedestrian, vibrant, animated downtown core.

    I just wish we would have a common vision, and recognized the “common good” of that vision. Then maybe we would stop seeing mediocre project proposed, and the “review” of these projects always being a “one-off” exercise in special-interest, nimby protests. We would have a real discussion about the very real issues of sprawl, and sustainability and decide, as a society, what we want to do with our city.

  17. Martin brings up an excellent point: we should be opposing office parks in the suburbs… they are an outdated concept that vacated city centres, harming the vitality of downtown life, to say nothing of hurting downtown economies. They were based on the belief that cars were the future and are far from easily accessible by mass transit. Perhaps some people should re-think their hostility towards office buildings downtown…

    Do you really think employees are happy in isolated campus-like complexes? You can’t patronize the vitality of city-businesses over lunch or even lunch in charming little parks or squares. The same after work. Just get into your car and go home.

    If we balance building office buildings with residential buildings in a higher density downtown core and neighborhoods, THAT is a green solution. The irony is, most people screaming for more mass transit, less cars are also the ones who rail against a lot of development projects and developers.

  18. Edward: while I agree with the gist of your comment, and like you I hate suburban office “parks”, it should be acknowledged that there is such a thing as vertical sprawl.

    The antidote to suburban single-use office “parks” is not more towers downtown. It’s building (or retrofitting) suburbia with true *towns* instead of suburban *subdivisions*.

    Big skyscrapers are not “green” by default. They require lots of energy to build, and more importantly to maintain. All that square footage enclosed in glass and steel requires enormous amounts of energy for ventilation, cooling, heating and lighting (after all, only the offices on the edges have access to windows).

    Moreover, if the amount of office space built isn’t matched by nearby residential space, then it just means more commuters… and with the dismal state of regional transit, that means more *car* commuters.

    Another problem with huge skyscrapers is that they are very often unfriendly to pedestrians. They create block-long blank walls with ventilation shafts or big garage entrances, create wind tunnels and block sunshine on the street.

    That said, reasonable highrise buildings crafted with enough ground level detail to interact with pedestrians on the sidewalk are 100x better than shitty 8$/day surface parking lots.

    Anyways, I feel this might be a moot discussion. It’s not like the city simply lift a mysterious “ban” and skyscrappers will popup. It should be noted that the occupancy rate has been declining recently. Even if new office space was built, nobody is there to rent it.

    http://www.marketwire.com/press-release/Les-locataires-du-centre-ville-de-Montreal-reduisent-leurs-couts-doccupation-1063686.htm

  19. Skyscrapers and office buildings DO have to be designed properly. For example, ground floors should be dedicated mostly to retail shops while entrances to the upper floors can be on side streets. Most towers in Manhanttan adhere to this concept. If you notice, in Montreal, our office buildings are poorly positioned in this way: we just have giant lobbies or empty plazas. A lot of streets are thus lifeless.

    As for lights, we can establish a by-law for set-backs within the building design. The nice thing about Montreal already is that our tall buildings are generally spread out quite a a lot – PVM to CIBC for example or Place Victoria which stands alone, etc… While not a green “silver bullet”, building in higher density is the opposite of urban sprawl and an important element in maintaining a 24/hour city. It does also reduce the dependence on the car. And we can build so-called “green” office buildings today. We have yet to see one in Montreal. How about mixed used buildings with hotel, office and apartments…

  20. My neighbourhood (Milton Park) is chock full of parking lots in the between-building spaces of buildings, mostly those owned by absentee landlords. It is fairly evident that the lots are operating illegally and all transactions are under the table. Does anyone know if the city will enforce the parking tax and how can I go about blowing the whistle on these operations? Thank you.

  21. Parking lots would not exist in the absence of government intervention in land use (height and minimum setback restrictions, segregation of residential and commercial use of land, minimum automobile parking requirements, development charges being too high for infill and too low for low density, basing property taxes on the value of land and building rather than land alone, and land transfer taxes).

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