Wednesday, February 3, 2010

Free Parking, like Freedom, Isn't Really Free

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The benefits of market-priced parking are not intuitive. Sigh... (click this link, for example, and read all the ranting comments). As Streetsblog LA notes, the press has been all over State Senator Lowenthal for proposing reforms to the way we currently provide parking.

Streetsblog encourages us to respond and back Senator Lowenthal up. In an attempt to do that, here's a quick and dirty guide to why YOU should support market-priced parking. I promise to link this post in comments on all the misleading media articles. Streetsblog, you challenged; I responded!


Let's think about it this way: would we all be better off if most food was free? No, we'd waste a lot of time waiting in lines, and once we got the food, we'd eat too much. That's a pretty good analogy for what we do with parking now.

Here's an example that shows how providing ample free parking hurts us in unexpected ways. The City of LA requires new housing developments to provide a certain number of parking spaces - more than one parking space per unit of housing. That means that when I rent my apartment, the price includes the extra cost that was added because the developer had to dig underground and build an underground parking complex. My rent pays for parking; as a tenant, I pay for it whether I want it or not. If we removed minimum parking requirements like this (which is exactly what Lowenthal's bill encourages cities to do), then developers could provide the amount of parking they think the market wants. They could provide the amount of parking they think they can sell. This creates possibilities. You could rent an apartment with parking as usual. Or you could pay less and not have a reserved parking spot in your building. You could choose how much you are willing to pay for housing independently of how much you are willing to pay for parking.

Want to know a developer who has long lobbied for the removal of minimum parking requirements? Habitat for Humanity. This is because the kind of low-income housing that Habitat builds is simply incompatible with high occupancy, expensive underground parking lots. Habitat's tenants don't need that kind of capacity, and more importantly they can't pay for it. But cities require Habitat to build it. This basically kills a lot of low-income housing projects.

As Donald Shoup always says, parking isn't free. We all pay for it, but the costs are hidden. We pay for that land through higher costs that get bundled into housing, food, and basically everything we buy. The key insight of capitalist markets is that we can provide efficient amounts of a good by allowing supply and demand to reach equilibrium. This equilibrium tells us how much of something people want and how much they are willing to pay for it. It is very difficult for some central agency (like a city government) to replicate this process. Because city governments don't have good tools for estimating how much parking to provide, they basically always overprovide it. Thus, we see Walmarts swimming in seas of parking that will only be full on Black Friday.

Next time you park in a free parking lot, in, say your apartment complex or at a grocery store or a movie theatre, check out how many of the spaces are full. I bet most of them are empty (like the Food-for-Less parking lot shown above, captured in a moment in time courtesy of Google maps). That's because most of these lots are required by city zoning laws, and city planners overestimated. We should allocate parking like we do any other important good: with a market. (Which is not to skate over the fact that markets have failures, but that's another post, and I think a market in parking would work just as well as the markets we have for housing and land).

On a fairness tip, as somebody who rarely parks, I don't really want my tax (and food, and housing, and etc) dollars going towards other people's parking.

A good transportation system should provide choice. We should be able to comfortably use any number of modes (driving, walking, biking, transit) at a variety of prices for a variety of services (pay more to go faster and more comfortably, or choose to economize). One way to achieve more balance in our transportation system is to get the prices right. Right now, we provide (very expensive) roads for free and (very expensive) parking spaces for free. As a result, we get a lot of driving. People are only responding rationally to the fact that it is cheap and convenient to drive. Those of us who want to encourage biking and walking must realize that when we price driving according to its true cost, not only in terms of road and parking usage but also in terms of social costs like air pollution and congestion, we give people incentives to switch modes. Parking reform is good for bikers; it's good for the air; it's good for the environment; it reduces congestion!

But if none of that convinces you, parking reform is also good for the people who park. Sick of situations where you have to drive around and around the block, looking for a space? Well, all those spaces are filled because they are free. (Remember the restaurant example earlier? When you cruise around, you're waiting in the analogous line). When we correctly price parking, there are always a few spaces open, so you never have to struggle to find a spot. The right price is the one that keeps a few spaces open while using most of the parking capacity. No more, no less.

(Credit to Donald Shoup for ALL of the ideas herein).

Now get out there and support parking reform!


Joe Linton said...

I wish it was an issue that was easier to summarize... even your excellent summary... is pretty long!

オテモヤン said...


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DLoMoh said...

Herbie, I'm so glad you're writing about all these things. I've constantly cited some of what YOU'VE told me about parking costs and the need for change, and now I can even refer them to your blog! awesome.


Craig said...

Somebody must be reading your blog:

作弊 said...


Harry said...

"The benefits of market-priced parking are not intuitive. Sigh..." Gold. Could be the caption under a comic strip ... Herbie. Oh the hill the writer will have to climb to coherently make his/her point.

Herbie said...

Dana, you can just tell them to search "market priced parking" and then click on the 8th result! (This is me SO excited whenever my writing shows up on a google search that's not, say, my name, or the words Meek Adjustments).

Then you can tell them to click on the 2nd result for that search and buy Donald Shoup's book.

karama maiha said...

awesome I put-off buying this for months, despite positive reviews. I tried every free weather app going and eventually decided to take the plunge. Glad I did - easily the most customisable weather widget and clock on caftan and the skins are awesome!