In addition to a tax on surface lots, the revenue of which should go to lowering property taxes in the city, Providence should be careful to uncouple the price of housing from parking.
The City of Providence removed parking requirements in a small part of the city, but retains them in much of the city (there are also modest parking maximums now in some select places, but those parking maximums are not strict enough to have stopped the development of a huge new surface lot on N. Main St.). Parking requirements add to the cost of housing or commercial development by making the entry fee to the market the provision of expensive storage space for people's cars. Of course, without parking minimums, some developers might choose to add parking anyway, but the parking minimum requires it.
The City of Philadelphia has a tax on commercial lots, which is something that I support for Providence. It also offers an exemption from the parking tax for any parking that is included in the cost of rent. Only residential parking that has a separate charge is taxed:
Exclusions from the Parking TaxIf you operate a parking lot/garage for a building with residences who do not pay an additional fee for parking, then no parking tax will be due. However, if any additional fee is charged for parking, then parking tax is due on that amount.
This is the confluence of one good idea (a parking tax) with one bad idea (residential parking minimums). Say, for instance, that the provision of a parking spot costs me $200/month. What Philadelphia is saying is that a landlord must pay an additional charge for offering parking a la carte. So, instead of paying $600/month for a room and $200/for parking (if used), all my tenants will likely pay $800/month, flat.
If anything, it would make sense to do quite the opposite: if you offer garage parking that is separate from rental costs, no parking tax should be paid (tax would, of course, be paid on any lot). If you operate parking that is included in rent, then an additional tax should be put on that, as a disincentive from coupling parking to rent. Research by Donald Shoup shows that over the past several decades, places where the price of parking was decoupled from the price of housing had more affordable housing costs, better business environments, and less solo driving per capita.
I'm not aware of any cities that return the parking tax revenue to their citizens, although this is the model for Donald Shoup's "right price" parking meter program. Shoup's meter program has been successfully implemented in many cities. Providence citizens should work hard to make sure that 100% of parking lot tax revenue goes back to taxpayers just like the meter rate under Shoup would. This would create an active constituency for the parking tax, and keep the city from considering parking a cash-cow. Our end goal is less parking, a more healthy transit, biking, and walking environment, and a city that can survive climate change and housing affordability problems.