## Valuation of Parking Space

There’s a unique problem in my apartment building – the building has been built with provision for only seven parking slots in the basement but each of the nine houses here has been allotted a slot, which means there are two obstructing slots. Unfortunately, my slot is at a location where I get blocked by the car belonging to the guy upstairs and so I’m a directly affected party due to this problem.

Currently I’ve managed to get around this problem by parking my car in some corner of the basement but neighbours are cribbing saying it spoils the “look” of the building (as if the look of the basement matters! ).

Coming back to the problem, I was wondering if there exists a solution. Clearly, the shape and orientation of the basement means that not more than seven cars can be parked there in a non-obstructing manner. Now, since every houseowner here was allotted a slot when the building got built, they are entitled to a slot so it is not feasible to request/tell someone to rent their house to someone who doesn’t own a car (2 bedroom houses with parking slots cost some 2 kilorupees a month more than those without parking slots).

Thinking about it, the only solution I realized is by trading a parking slot among affected parties. For example, the slot of my house (B1) is obstructed by the slot belonging to the C2 house. Now, what if my owner tries to buy out C2’s parking space? He can either buy it out outright or he can pay the owner of C2 a monthly fee in exchange for C2 not letting out his house to someone with a car.

And he gets compensated for this by charging a higher rent from me (note that if my landlord buys out the c2 slot, I effectively get two slots, since both belong to me, there is no obstruction). The key to this, however, is the relative pricing of various parking slot combinations.

The key equation is this: if Pn is the monthly rent of a house in this building with 2 bedrooms and n parking slots, then there is a profitable trade between the owner of my house and the owner of C2 if and only if:

P0 + P2 >= 2 P1

If the above equation doesn’t hold, the amount by which my owner gets compensated (by me) for the second parking slot will not suffice to pay the owner of C2 to not let out his house to someone with a car, so the trade I described above cannot take place.

But then, according to Coase theorem, irrespective of initial allocations (here C2 has a parking slot that blocks B1’s slot) there exists a trade in which each party gets the desired outcome. Is there a contradiction with the equation I’ve written above?

Now, thinking about it, the value of both my house and C2 is not actually P1 but a number P1′ which is less than P1. P1′ takes into account the pain of having an obstructed parking slot (I get pained because I can’t take out my car when I want; C2 gets pained because I disturb him every time I want to take out my car), and so effectively both my house and C2 would be overvalued if we were paying a rent of P1.

And if we take P1′ into consideration rather than P1, I’m sure the following equation holds:

P0 + P2 >= P1′

The only other problem here is that when taking a flat on rent, you are unlikely to check for details such as if your parking space is blocked, so it is likely that the deal will take place at P1 rather than at P1′. However, once you move in, you figure out the pain and the owner of the apartment will feel the pinch when his tenants clear out at a rate faster than he would’ve expected which ends up reducing his long-term average rental income. And the deal I described above will take place if and only if he figures out why the fair value of this apartment is P1′ and not P1.

## Breakfast at Maiya’s

It is incredible that a South Indian restaurant in South Bangalore can charge forty rupees for a plate of idli-vada, and not just get away with it, but also run a full house. By the time I was getting out of Maiya’s (in Jayanagar 4th block; I’d written about their dinner earlier) it seemed like the first floor was already full and people were being directed to the seating area on the second floor. Apart from these, in a separate area on the ground floor, there is a breakfast buffet (priced at Rs. 125 on weeekdays and Rs. 150 on Sundays).

The food was good but nothing exceptional. Perhaps I don’t find it exceptional since a lot of my South Indian eating out happens at one of the Vasudev Adiga’s restaurants, which I believe are significantly superior to the other “Darshinis”. The food at Maiya’s was approximately of the same standard as that of a Vasudev Adiga’s, and the coffee (served in a silver tumbler) was incredibly superior. And the place was full. I didn’t bother to exactly estimate the capacity of the place but I think the hall seats around 100 people.

The service was good and quick (except for the coffee which took an hour to arrive), and the waiters weren’t overbearing (unlike those on the third floor where I’d had the silver thali last month). It perhaps gives an idea as to what Adiga’s might have been had it gone into the business of running sit-down restaurants. I haven’t tried making an estimate of the finances, so I don’t really know how well it works out financially to have a sit-down restaurant priced at about 100% premium over similar food at fast-food joints.

The success of Maiya’s in Jayanagar also gives us an indication as to what my neighbours the Kamats (of Yatri Nivas, Lokaruchi, etc.) have missed out – having held a virtual monopoly over sit-down south indian restaurants over the last ten years during which most other sit-down places were downing their shutters and most of the new upstarts have been stand-and-eat types. If only the Kamats had been able to get a hold on their quality, they probably wouldn’t have had to go into the business of Chinese restaurants (chung-wah-opus in Jayanagar 3rd block) or capuccino shops.

Also, Maiya’s is what I call as a “full-service restaurant” – one that serves food throughout the day – as opposed to Darshinis which are typically breakfast-and-evening-snacks focused, or the fine dining places which do only meals. What that allows the Maiyas to do is to maximize their usage of space – since they will be using the same seating infrastructure throughout the day. I remember saying a couple of years back that darshinis should have a time-share arrangement with fine-dining places.

Another nice feature at Maiya’s is the tables. They have a large number of tables which can seat two people across, and which have been designed so as to easily join them to other tables. The chairs are also simple and light and can be moved around. This allows the restaurant to easily reorient the tables and chairs depending upon the size of various dining parties, without resorting to making people share tables with strangers (common practice in south indian restaurants).

Today probably the restaurant was relatively lean, so my mother and I got a table for four (basically 2 tables joined together). However, if the restaurant had reached capacity, I’m sure they’d’ve yanked off one of the tables and given it to someone else.

The food is good but not spectacular, but you can sit down and eat. Go on a weekday when it is not crowded, and you’ll enjoy it. Don’t botehr waiting in line to get in to eat on a Sunday – you might as well take a parcel from the nearest Adigas and eat at home.

2 plates  2-idli-1-vada             2 * 40          Rs. 80
1 plate  rava idli                         1 * 25           Rs. 25
1 coffee (silver tumbler)        1 * 15            Rs. 15
1 tea (silver tumbler)              1 * 15            Rs. 15

———————————————————

Total                                                                   Rs. 135

Tips not accepted.

PS: On the ground floor, at the side, they have one stand-up coffee shop, which operates between 6am and 8pm on all days of the week (the restaurant is closed on Mondays). Absolutely brilliant coffee. Among the best I’ve had in Bangalore. I would recommend you to try it out the next time you pass by the area. Rupees ten only.