Residential parking is either free or low-priced in most European cities compared to the prices that other public space users pay for public spaces. Thus, municipalities subsidise car users significantly regardless of the income of the car users. The reason for providing these subsidies is the firm belief that reducing these subsidies – that is raising residential parking fees – would be unpopular. Nevertheless, a survey about parking fees in Budapest found that the majority of residents consider parking fees justified in most cases.

In Budapest, the official annual residential parking fee equals 250 times the hourly parking fee, and so it is around 240-360 EUR in most parking zones of the inner city. However, each inner-city district provides a 100% discount from these parking fees and so inner-city residents need to pay only a low (up to 7 EUR) administration fee annually. The 7th district of Budapest is extraordinarily generous, as it provides a 100% discount for unlimited number of cars per flat – other districts usually limit the number of permits per flat -, and for many people who do not reside in the district but work there in the public or NGO sector. In total, all these discounts amount to around 3.5 million EUR each year. As one-third of the households have parking permits, only 35-40% of the adults receive parking subsidies in the districts (the number of adults in permit holder households is likely to be somewhat higher than in the households without permits).

The Climate Protection Cabinet of the Municipality of 7th District surveyed the public perceptions regarding the justification of current parking subsidies through an online questionnaire. Responses were collected between the 24th of October and the 10th of November 2020. The high number of responses was ensured by an online questionnaire form disseminated through Facebook advertisements and by emails sent by the house management companies to the residents of the houses they manage. 1020 responses were collected altogether, 127 of which were from residents of other districts, who therefore were excluded from the analysis.

At the beginning of the survey, respondents were asked to express their opinion about reducing the parking subsidies of around 3.5 million EUR/year and spending the freed resources on other important purposes (Figure ). The majority of the respondents (57%) disagreed with this proposal, and the proportion of opponents (44%) exceeds the proportion of proponents (42%) even if the permit holders are weighted according to their estimated proportion. (In the survey, the share of permit holders was 70% which substantially exceeded their estimated 35% share.) Interestingly enough, even the 30% of people without a permit disagreed with directing public resources from parking subsidies to other purposes. This suggests that subsidies are popular for many people even if they do not benefit from them.

Another question asked people to express their opinion whether the municipality should subsidize the car holder and carless households to a similar extent (Figure 22). In this case, the share of proponents exceeded the share of opponents even in the case of permit holders (49% to 33%). If the share of permit holders are weighted according to their estimated weight, then proponents constitute a distinct majority (66%). Even 45% of those who disagreed with reducing the parking subsidies agreed that car holders and carless households should receive similar subsidies.

Later, respondents were asked about the extent of subsidies they consider justified in the case of different groups. Respondents could select every 10% from 0% to 100%. To avoid misunderstanding, the answers specified the approximate amount of annual parking fee each extent of subsidy would entail. The results suggest that the majority of people consider free residential parking acceptable only in the case of people in need. In all other cases, the majority consider a certain amount of parking fee justified. And in the case of people with more than average income even the permit holders consider certain parking fees as justified. Table 1 summarizes the share of those who consider free parking justified in the case of different groups.

Table 1. The share of respondents who consider consider free parking justified in the case of different groups of residents

Interestingly enough, in the case of groups with more than average income, the majority of those who support a subsidy reduction disagreed with the subsidy reduction in an earlier question. Why did they change their opinion? I argue that there are the following explanations. First, the earlier question did not specify the extent of reduction and thus many respondents might have believed that reduction means 100% reduction that they might have considered too much. Secondly, the categories based on income level might have made some respondents realize that rich people receive parking subsidies, too, which some respondents found unjustified. Thirdly, there were some questions between the earlier and latter questions that raised the possibility to subsidize other groups, e.g. the public transportation use of children, or to spend the public resources on other purposes, like developing green areas and so some people might find these possibilities more important than subsidizing parking.

Table 2 compares the averages of residential parking fees people consider justified in the case of different groups. Not surprisingly, in the case of residents’ cars, permit holder residents consider substantially lower parking fees justified than residents without permits, probably due to their self-interests. On the other hand, this difference ceases almost completely in the case of non-residents.

Table 2. The averages of annual residential parking fees respondents considered justified in the case of different groups.

Based on the above findings the following conclusion can be suggested. Not surprisingly, subsidies are popular – maybe unless they are given to disliked people – and so subsidy reductions are unpopular, even among those who do not receive subsidies. It seems that many people perceive municipal or state budgets as unlimited or do not perceive a relation between the amount of subsidies and the amount of public resources available for other purposes. For example, in the textual remarks, many people commented that they would agree with subsidizing all residents equally, were the individual subsidies much higher. In addition, many people seem to question that more public resources entail more spending on public purposes; they rather seem to believe that more public resources lead to higher corruption or higher salaries of lazy municipality officials.

Nevertheless, it seems that simply raising the possibility of spending more on popular public purposes, proposing only partial reduction of subsidies, or confronting people with the fact that high-income people receive subsidies, too, make people, particularly those who do not receive subsidies, consider that subsidies should be reduced, particularly in the case of those who do not need it. As most people do not receive parking subsidies, the above actions can lead to a solid majority who accept or even request partial parking subsidy reductions.

by Csaba Tóth
Member of the Expert Committee of the Clean Air Action Group