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.