Free Parking Is Really Expensive

Commentary about business and finance.
July 9 2013 12:31 PM

Out, Damned Spot

Mandates on parking spaces are strangling America’s cities.

Seen in front of parked cars in Chicago's Marina City, the Dearborn Street double-leaf trunnion bascule bridge over the Chicago River, built in 1963, rises up during a bridge maintenance run March 31, 2006 in Chicago, Illinois.
Cars in the parking garage of Chicago's Marina Towers

Photo by Jeff Haynes/AFP/Getty Images

The Chicago Architecture Foundation offers a boat tour of the city’s architectural highlights that made for a delightful way to pass the afternoon on the Fourth of July. One of the more interesting aspects of the tour, strangely enough, is in revealing how recent skyscrapers by the Chicago River deal with their parking needs. The famous Marina Towers flaunt their 19 floors of parking by leaving the cars exposed to full view from the streets. Many structures simply feature a flat, windowless parking pedestal, atop which an elegant structure is perched. But the tour leader also pointed out a more original configuration for residential structures: The parking pedestal is wrapped with pseudo-townhouses, and then an apartment tower is stacked atop it.

But why so much parking smack-dab in the middle of Chicago’s Loop, a walkable area that’s well-served by heavy-rail transit and many buses? The culprit is a regulatory scourge so ubiquitous as to be nearly invisible: regulatory parking mandates that tax the poor to subsidize the rich while damaging the environment and the broader economy.

Rules requiring that new buildings come with parking spaces attached are so omnipresent that their absence induces confusion. A recent Boston Globe article by Casey Ross about local parking regulation was headlined “City Wants a Cutback on New Parking” and described city officials as “deliberately discouraging construction of new spaces.” What’s actually happening, as Ross’ reporting makes clear, is that officials are allowing the construction of buildings with a lower ratio of dwellings to parking spaces than previously required. Specifically, “in most cases, officials are allowing the ratio to slip to 0.75 spaces per residence,” rather than the one or two spaces that had been the previous rule.

Boston officials should be commended for this. But what they really ought to do is something radical, and it’s the exact same thing every other city and suburb in America ought to do: reduce the number of required spaces to zero.

To be clear, that’s not to say nobody should build new parking spaces. Cars are very useful, and if you want to own one, you need someplace to put it. A parking space is valuable, and so reasonable real-estate developers will typically want to feature parking spaces as part of a new development. But parking spaces are a building amenity like any other—granite countertops or spacious bathtubs or a fitness center or a roof deck—and so they’re something the real-estate market is capable of generating in the quantity that people demand. The current rules, mandating that all new construction come with more parking spaces than the market supports, create costly distortions throughout the city.

Michael Manville of UCLA studied a liberalization of parking regulations in one section of Los Angeles and found that deregulation leads to the construction of more housing units and fewer parking spaces. Conversely, tighter regulation leads to a lack of affordable housing and a surplus of parking spaces. That might make sense if parking spaces were a public good, like clean air. But they’re closer to being a public bad. When Chicago mandates the creation of a high number of parking spaces per square foot of downtown office building, it reduces the price of parking, but it has a number of negative consequences. Cheaper parking means more traffic congestion on the streets. It also means lower ridership for Chicago mass transit. Perversely, cheaper parking offers a subsidy to commuters from outside the city limits at the expense of Chicago residents living within walking or biking distance of the central business district. And, of course, it leads to dirtier air, not cleaner.

The obvious problem with selling reform is that many residents of any given city rely on cheap on-street parking. These people fear, reasonably, that new real-estate developments will lead to more competition for those on-street spaces. Regulations requiring copious amounts of new parking don’t serve the public interest, but they do bolster the private interests of incumbent car owners who lack off-street parking of their own. 

In order to assuage these interests, parking reformers typically do two things. One is to emphasize the idea that there’s a trend toward carless city living, so these new residents really don’t need so many parking spaces. The other is simply to nudge minimums down in select areas rather than making the pitch for wholesale deregulation. But no matter how tepidly you water down the reform, there’s just no denying that reduced minimums will make street parking scarcer—in exchange for the concession, you don’t really defang the opposition. 

A better approach might be to go bigger on reform but straightforwardly confront the basic interests of off-street parkers. Existing off-street permit holders, for example, could be given a permanent—and transferable—right to park their vehicles on city streets, while the supply of future permits could be sharply curtailed. That way new residents to the city who don’t want to buy or rent a place with off-street parking would need to buy or rent a street parking permit from someone who already has one. That wouldn’t be particularly “fair,” but neither is the status quo.

Assuming it worked, this approach would lay the groundwork for a much more ambitious reform agenda that would leave cities with more construction, less traffic, and more fiscal and environmental sustainability. Letting people build as little parking as they want would be a radical change. But if it happens, we’ll look back on this strange island of central planning in an otherwise capitalist economy as something that absolutely deserved to die.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.