New Orleans, Down for the Count?

According to the official estimates, New Orleans will have a population of 442,064 on April 1, 2010 (census day). However, Janna Knight and Mark VanLandingham at the Tulane University School of Public Health think it will be lower, much lower. Looking at death certificates and age specific death rates, they work backwards to figure that the census will probably count between 300,000 and 350,000 in New Orleans on April 1. Of course, the city government has been asking people to invite friends and relatives to visit for the April Fool holiday and then count them, but barring that, the count should be about 20%-35% below the pre-Katrina level -- but who knows how successful the fraud strategy will be.

So what does this mean? First, it now seems unlikely that a substantial number of families or individuals that have relocated are likely to come back now. All the money used to bring people home has been distributed and the insurance money has now all been paid out. However, while many have settled away from the city, many may be located in the surrounding suburbs. It will certainly be interesting to see how the population of the New Orleans metro area has changed over the last 5 years.

Why haven't people come back to the city? Well, for a lot of folks, the allure of New Orleans was not gumbo or jazz, but cheap housing. Housing in New Orleans was, in many places, renting for rates that are not sufficient to fund new construction. Moving elsewhere is simply a better deal.

But this leaves the city with a very big problem. I spent a couple of hours driving around the Lower Ninth Ward this past week and I can report that east of the industrial canal where the flooding was so bad, maybe 15% of the houses are occupied. In some areas it is about 30% while in others less than 5%. If the return migration is over, then someone has to figure out how to deal with hundreds of acres of land now occupied with a rural density level. It looks like the streets and services are all still there so turning the remaining area into a park will be expensive... as will be an agricultural use. Could the lots be bought and then sold to a large scale housing developer who could get the cost of construction way down by building 1,000 units? Anyway this goes, it won't be easy... but it will be big.

New Culprit in Sprawl: Free Parking

I have spent some time talking to professors in a planning department at a large university. What surprises me most is how openly hostile many of the faculty are to economics. To an economist, sprawl is the result of economic factors. Primarily, economists believe that sprawl is the result of sprawl-type development having a combination of profitability and desirability that beats out all other options. A big part of what created this winning combination during the 20th century involves the effect of the automobile on transportation costs. Not buying this argument, one planning professor tried to tell me that sprawl was the result of greed, corruption and stupidity.

After reading Donald Shoup’s excellent book, The High Cost of Free Parking, I think I have found a way to bring economists and planners together. That is, the stupidity of parking requirements has significantly lowered the cost of driving, making sprawl much more economically viable.

We all may love free parking, but parking spaces are not free, they take up valuable real estate that could be used for other purposes. At the same time, planning departments all across the United States force developers to provide enough parking so that, 99% of the time, there will be a free space available for the next car that wants one. Shoup not only demonstrates that parking standards are largely based on little more than educated guesses, but by measuring the value of spaces, shows that the excess parking capacity we have created across the U.S. is extremely wasteful. With an estimated 4 parking spaces for every car in the U.S., it is clear that the cost of parking spaces exceeds the value of the cars in the U.S. Beyond that though, Shoup also effectively explains how free parking, through its effect on the cost of a driving trip, subsidizes driving and exacerbates sprawl.

In a nutshell, partly because a parking space that could cost $5,000-$50,000 to provide is free to the user, people choose to drive alone rather than choose a substitute – car pooling, mass transit, demand for higher-density, mixed-use living, etc. When everyone makes this choice, there is more congestion on the roads and we build more road capacity. This keeps the time cost of driving low and increases the demand for parking. So we force more spaces to be provided at every type of land use.

Planners (and economists) have long argued that free streets essentially subsidize driving, but we have missed the fact that free parking has the same effect. But free parking is in some ways more problematic as excess parking lots necessarily reduce density of land use, which forces developers to spread out more. Sprawl is built into the system. According to Shoup, developers always want to provide less parking than city planners force them to create. Because spaces are so expensive to provide, this drives up the cost of production and creates higher prices for whatever is being created on that piece of land. Everything from restaurant meals, to groceries, to insurance policies, to dry cleaning, to city services, cost more to produce because empty parking spaces must be paid for.

So free parking can be partly blamed for low-density development, excess road capacity, higher prices for goods, high demand for automobiles and gasoline (and therefore pollution and climate change), low demand for mixed-use development and low demand for mass transit.

Turning this around is going to take time, but the fixes are easy. 1) end all parking supply requirements and 2) install parking meters. By doing this, if a parking space won’t pay for itself, then its provision is a waste of resources and it will be replaced with a higher valued land use. High tech parking meters do not require carrying a bunch of quarters around and never result in a picket for overstaying your allotted time by 3 minutes. Beyond that, the revenue generated may allow cities to lower property taxes.

If the solution is so easy, why is implementation so hard? Because Americans seem to think that free parking is equivalent to the “pursuit of happiness” and is therefore promised them by the Constitution. It is time for better ideas to carry the day.