Yes, you understand the concept. Of course, you could rent out your space for $6 a day and turn a profit, too. (Apart from the cost included in your rent.)
Yes, you could do that too. If the cost of the second car is less than $5 a day, then you wouldn’t lost money, but it isn’t as efficient as renting your parking slot.
The purpose of these kinds of schemes is to incentivize people to allocate resources efficiently. Parking on the street and leaving your parking slot empty has costs and benefits, to you, and costs to other people. Payments and rewards and fines are tools to maximize the number of people who can park, and minimize the number of parking spots that are left empty. Which you can do in a lot of different ways.
Steven Leavitt in Freakonomics talks about the day care center who wanted to reduce the number of parents who picked their children up late. So they started charging (I think) $10 an hour for picking up your child late. The number of parents picking up their children late went up - because $10 an hour is pretty cheap for a baby-sitter.
But if you remember, it wasn’t simply a matter of cheap babysitting. ( and it was actually more like $3 per incident) Because the initial problem was late pick-ups where no fee was charged. The idea was charge a fee for late pick-ups and people will pick up their kids on time. Some centers started to charge a small fee- and tardy pickups increased. While they didn’t increase in centers that didn’t institute a fee. The theory is that when there is no monetary fee involved parents “pay” for late pick-up in other ways - by feeling embarrassed that the teacher had to stay late to wait for them , for example. By charging a fee , the parents apparently viewed it as an extra service they were paying for , rather than an inconvenience they were imposing on the teacher. Which is probably why a common late fee is $1 per minute per child- the parents still don’t feel guilty but $60 per hour per child is more than they want to pay for the service.*
That’s the problem with incentives- finding the right one. To use a parking example, there is a street next to my office where parking is prohibited , but certain employees of my agency have placards that allow them to park on that street. Except from 4pm-7pm, when the placards are not valid. Of course, there are always cars parked there from 4-7pm. Because they never get towed and rarely get ticketed - if I get one $185 ticket per year, it’s still cheaper than parking in the $10/day garage even once a week. You’d have the same problem with a $5 day fee for not using the parking space- it would have to be monitored closely enough that people would frequently get charged the fee and that might end up actually costing money. That doesn’t mean it’s not possible to incentivize people to use their assigned spaces rather than parking on the street - but it does mean you need to be careful about the method used. Another option might be to not include the parking space with the rent but to charge a fee for parking in the garage with a hefty discount to residents. That way, the people who prefer street spaces wouldn’t pay the fee which would free up spaces for guests and others willing to pay the fee.
Like day camps that charge one fee for 9am-4pm and have an additional charge for an extended day from 7am-6pm. People don’t feel guilty about picking the kid up at 5 pmbecause they’ve paid for the ability to do that.
** People will pay a few dollars for being stuck in traffic once in a while, but not $60 to spend 30 minutes doing their grocery shopping before picking up their two kids
It seems like a garage stall is included with each apartment.
A better plan would be to lower the apartment rent, and charge a separate fee for each garage stall. Then some of the people in the street-side apartments would decide not to get one, and just always use the on-street parking. that would leave more spaces open in the garage, and they could have more guest parking (and at a lower cost – $10/day seems excessive). This would also be more fair for renters who don’t have a car at all – currently, part of their rent pays for a garage space that they never use.
It’s interesting that someone used this analogy. I have experienced the same thing, but with pepperoni, not veggie. That is, you can never order enough pepperoni, because people who said something other than “pepperoni” when polled will inevitably take a slice of pepperoni, leaving not enough pepperoni for those of us who wanted only pepperoni. When I said “pepperoni,” I meant I wanted 2-3 slices of pepperoni. When they said “green peppers” or “mushrooms” or “plain,” what they really meant was “I’d like one slice of green peppers, one slice of plain, and one slice of pepperoni.”
True, the only thing making it “official” is that that’s what management claims is available for guest parking. But I disagree with the idea that it’s okay for the first-floor dwellers should be selfish. What makes living in a high-trust society so great is that everybody plays by the rules, making things more pleasant for everyone.
Some follow-up notes:
There are no assigned parking spaces in the garage. Once you get your car into the garage, you can park anywhere you want. They hire a towing company to patrol the garage at random times and tow any vehicle not displaying a parking decal or guest pass. I believe every resident gets one parking decal–i.e., per apartment, a unit can have as many cars as there are names on the lease–but I’m not totally sure.
A guest parking pass is $5 per day, not $10. I could have sworn it was 10 when I moved in, but the last few emails that have gone out about parking say 5, so either I was wrong or they lowered it at some point.
Frankly, I’m surprised that people want to leave their cars on the street. There are vagrants who wander our neighborhood at night, and people are leaving BMWs, Mercedes, and Lexuses out there.
I’ve seen it that way as well, when everyone is a meat eater. But it’s more of a problem with vegetarians since they get more indignant about it. I don’t like veggie pizza, but don’t really mind scraping off the olives and mushrooms if that’s all that’s left. But a vegetarian isn’t going to like scraping off the pepperoni just to have something to eat.
My condo complex HOA solves approximately the same problem in your OP by obligating residents to use their garage under threat of fine. It’s a little different since the guest spots are in the complex itself, but the same basic problem is there: some residents would rather always use the guest parking so that they can keep their garage free. Technically, residents are allowed to keep only cars in the garage, but it’s pretty clear this rule is only there as a lever against people abusing the guest slot privilege.
Mostly it works, but it’s also clear that some residents keep more cars than can fit in their garage, and so still end up using the guest spots.
Change it so that people who have street access don’t have gated car parks (but see ). Then those street access people’s car spaces can be turned into free gated guest use car parks, which can also be used by street acess people if and when they can’t get a street park.
But they aren’t breaking any rules- apparently the street parking is open to the public. Those first floor residents aren’t doing anything different than people who use their garage for storage and park on the street. They might be inconsiderate, they might be poor neighbors- or perhaps the people who think that these residents should walk further rather than getting permits in advance for their guests are inconsiderate/poor neighbors. Either way, no one is breaking any rules. I doubt there’s any name for this in economics - in part because it’s not actually the phenomenon that you described of people using a resource for other than its intended purpose. The street spots are not intended for guests of your building - they’re intended for guests of your building, customers of the stores, additional cars belonging to residents of your building *, and anybody else who wants to park there including residents/guests of other nearby buildings (perhaps on the next block) and residents of your building who don’t want to park in the garage.
( I really doubt it’s one space per resident included in the rent - they aren’t going to give four spaces to one apartment with a couple and their two car-owning teenagers. It’s going to be one or at most two per apt- and it most places I know of , the second decal costs extra.)
What probably makes it “official” is that the developer got approval to build with a reduced number of car parking spots, by claiming that the space out the front was for “guest” access. If that’s not working, you might be able to get the local government to convert it to short term parking – a solution that would please nobody, but would at least have the advantage of making the first-floor residents equally unhappy.
(It’s not a tragedy of commons. I think a traditional term might be “theft”. As in “all property is theft”, or “The law locks up the man or woman/Who steals the goose from off the common/ But leaves the greater villain loose/ Who steals the common from off the goose.”
Glad you liked it, though there wasn’t really much analysis in there. Just, perhaps, a clearer example of a similar thing.
I think the common element is this: when it comes to making an individual choice, a slight preference is just as good as a strong preference. Either way, you’re better off choosing that.
So when you have a limited resource, and some groups slightly prefer that thing while others greatly prefer it, it’s very likely that you won’t reach the global optimum, because every bit that went to the slightly-prefer people would have been better off with the other group.
Fortunately, there is a fairly easy solution. Because the one group has only a slight preference, they can be won over with a small bribe or threat. For the parking spaces, a small fine would do. In the case of pizza, some social stigma may be enough of a threat.
Well sure, a small fine would do if the spaces on the street were under the control of the building. But they aren’t - that’s the problem. If those spaces were not on the street, but were in a separate lot owned by the building and designated “visitors parking”, there wouldn’t be a problem - the building could fine the residents who parked in visitors spaces rather than using their own space. Even if there was no legal problem with the building fining residents for parking on the public street - (and I’m guessing there probably is*) there are loads of practical problems.
Apartment buildings can make all sorts of rules regarding perfectly legal behavior on their own property for example, the building can prohibit smoking anywhere on the property including in apartments, on balconies and on any walkways - but it doesn’t follow that they can prohibit off-property legal behavior. I’d be really surprised if they could fine a resident simply for smoking on the public street without some other behavior such as leaving butts in the ground or fine them for legally parking in public spaces on the street.
The fine isn’t for parking on the street–it’s for not using their own designated space. Of course, exemptions would have to be carved out–people without cars, etc. Heck, the complex could simply say that parking spaces under some annual utilization threshold will be converted to guest spots.
They aren’t breaking any laws, but they are breaking informal rules. That’s what I’m talking about with regard to a high-trust society. It’s not that people follow the letter of the law, it’s that people are considerate.
Besides, the first-floor residents are shooting themselves in the foot when it comes to guest parking. There isn’t enough space on the street for every first-floor resident to park there. I have no idea if there would be if cars could park bumper-to-bumper, but they can’t, because there are these trapezoidal extensions of the curb out into the street, dividing the street parking into discrete spaces, and taking up quite a bit of space themselves. (I tried to represent this with an ASCII drawing, but coudln’t figure out how to insert a line break in
tags.) Moreover, each one of those spaces is about 1.5 typical cars in length. So if a car is parked in one, there is a lot of wasted space. I have no idea why this was done, but one hypothesis is that it's to prevent large trucks from being parked on that side of the street.
Anyway, because there aren't even enough on-street spots for all the first floor residents, it must be that over any given night, some of them have to park in the garage. It's just a matter of who gets home first. And the first floor residents all suffer from the lack of availability of guest parking just like the rest of us do.
Also, because people are talking about "car parks" and "designated spaces," just to be clear, let me repeat that there are no assigned spaces within the garage. They're not even numbered. It's a big parking garage, the type you find in a downtown area, the type that looks like this inside:
https://www.hfmmagazine.com/ext/resources/images/2016/September/HFMDaily_0908_RestonGarage_1.jpg