Central Planning for Parking

by on December 12, 2013 at 12:39 pm in Economics, Travel | Permalink

Central planning is everywhere discredited except for central planning of parking places in American cities. Here from an excellent post is Matt Yglesias.

Are members of the Rockville, Maryland Town Council experts in real estate development? In parking management? Are they putting their own money on the line in the success or failure of projects in the center of their town? Of course not! Nonetheless:

Mayor Bridget Donnell Newton said she attended the Christmas tree lighting recently and was unable to find a parking space in Town Center. Councilman Tom Moore said he would like to get a briefing on Town Center parking from city staff before making a decision.


Councilwoman Virginia Onley said the proposed parking reduction was her biggest concern with Duball’s plan. In Petworth, she said, some apartment residents have a Safeway downstairs. In Rockville, Town Center residents have to get in their cars to go to Safeway.

Suppose other kind of business decisions were made this way. Maybe someone wants to open a burger joint in Rockville, but he doesn’t want to serve milkshakes. One councilman says the last time he wanted to get a milkshake there was a very long line, so obviously the new burger place must serve milkshakes. Another councilman protests that he doesn’t even like burgers. Aren’t more people vegetarians these days?

Market forces aren’t good at everything. But striking a balance between the demand for some service (parking) and the cost (including opportunity costs) of providing it, is exactly what market forces are good at. And yet somehow when it comes to parking spaces no politician in America is radical enough to suggest that the solution is to build as much parking as people want to pay for.

1 Urso December 12, 2013 at 12:44 pm

Matt Yglesias is ravingly pro-market whenever the market solution fits his pre-existing political or aesthetic bias (here, fewer & more expensive parking spots in urban centers; see also his anti-zoning diatribes), and staunchly anti-market whenever it doesn’t.

To be fair, that just means he’s basically like everyone else.

2 Morgan Warstler December 12, 2013 at 3:02 pm

Not true, real free market folk can be judged by the things they dislike they accept in order to get free markets in the things they do like.

He’s not a free marketer at all. He will be when his desire for parking outweighs his desire for Obamacare.

3 Jon December 18, 2013 at 1:09 pm

There is nothing wrong with being “pro-market” when the impact of the pro-market policy is considered positive and “anti-market” when the policy’s impact is negative.

What is bad is to take the market solution or the non-market solution just for the sake of being “pro-market” or “pro government intervention” without considering the outcomes.

4 @desmondbliek December 12, 2013 at 12:49 pm

The one flaw in this analogy is that that Matt doesn’t admit that the Council operates a free (or low-cost) milkshake dispenser on the curb, which is what has created the sense of entitlement to convenient and free/low-cost milkshakes. Council’s ‘problem’ is the that the lineup at their milkshake dispenser grows when the burger joint decides not to serve milkshakes. Council could, of course, decide to charge the market clearing price for their curbside milkshakes, but it seems that the preferred option is to impose arbitrary milkshake serving requirements on burger joints.

5 prior_approval December 12, 2013 at 12:51 pm

‘And yet somehow when it comes to parking spaces no politician in America is radical enough to suggest that the solution is to build as much parking as people want to pay for.’

Hilarious – Americans want free parking, not something they need to pay for.

See any debate about American infrastructure over the last generation (post-Reagan Revolution).

It isn’t just Prof. Cowen who is a master at satire, in case anyone needs reminding.

6 Steve-O December 12, 2013 at 5:10 pm

I want a free pony, too.

7 mishka December 12, 2013 at 1:09 pm

perhaps there should be meters at the entrances to the children playgrounds and on the park benches. just to make sure the demand and supply are balanced.

8 Kaleb December 12, 2013 at 2:11 pm

All streets should have tolls.

9 Michael Foody December 12, 2013 at 3:20 pm

A better analogy would be mandating dedicated playgrounds for all residential and business developers. Unfortunately since that is not the status quo it would seems stupid and undercut your attempt at making a point.

10 Ricardo December 12, 2013 at 11:17 pm

Huh? If the town wants to build its own garage or lot on public land, that is one thing. In fact, one finds such facilities in many American towns and cities and, often, you still have to pay to park. The objection here is to the notion that a private developer on private land ought to have the number of parking spaces it is planning to include in the development subject to micromanagement by politicians.

11 Rahul December 12, 2013 at 1:21 pm

Regarding the burger-milkshake analogy, the city I lived in wouldn’t get new bars a liquor permit unless they signed on a clause that they would also serve food until they closed. Apparently once in a while they actually sent a city inspector at midnight to check if the bar’s kitchens were still open.

Not sure if this was a unique regulation or common in other cities too.

12 Ricardo December 12, 2013 at 1:54 pm

I believe this is true in Arlington, Virginia. I don’t know if it’s enforced, but the high level of compliance tells me it is.

13 eccdogg December 12, 2013 at 3:36 pm

I believe this is also the rule in Raleigh, NC. You have to serve food to get a liquor license. The loophole is that you can be a “private” club and not serve food. So bars without food sell you a $1.00 “membership” and hand you a member card when you walk in the door.

14 mavery December 13, 2013 at 8:52 am

Foundation is one of the places in Raleigh I miss the most.

15 KLO December 12, 2013 at 4:34 pm

Virginia requires that all places serving alcohol on premises receive a minimum of 45% of gross receipts from food and other non-alcoholic beverages. I strongly suspect that many places overreport food sales (and pay any accompanying taxes associated with that) to get around this requirement.

16 Alex' December 12, 2013 at 7:51 pm

From what I understand, if a person orders a red bull and vodka, half the cost of that is attributed to the Red Bull, which apparently counts as food.

17 Turkey Vulture December 12, 2013 at 2:12 pm

Yeah there are odd rules like that all over the country. I vaguely recall reading related court decisions in course on a Local Government Law, but it’s all getting blurry now.

18 RPLong December 12, 2013 at 1:27 pm

Yglesias does make an excellent point, but the real explanation is that central planners do not want people to drive. They do not want to plan cities in which a large number of people drive and park their own cars.

Central planners dream of cities in which everyone lives in a loft, rides a fixie, shops in little expensive grocery stores one paper bag at a time, and travels by Amtrak or VirtuCar otherwise.

19 mulp December 12, 2013 at 1:51 pm

Actually, most central planners want everyone to drive, and you can tell because they zone things and locate roads so it is impossible for anyone without a car to live or work or shop there. It is the primary method of keeping out the working poor and disabled.

20 Finch December 12, 2013 at 2:00 pm

For once I find myself (sort of) agreeing with mulp.

Urban and town planners are a diverse lot. Much of what constitutes planning is just immigration restriction at the local level, potentially with disagreement over who exactly is the right sort of person to encourage and discourage.

RPLong describes a common urban hipster view, I think pretty accurately, but it’s not the only planner perspective. Minimum lot sizes, “Save our farms!,” and historic neighborhoods, for example, are all about keeping out the riffraff and preserving property values.

21 asdf December 12, 2013 at 7:46 pm

Yuppies like public transport between areas of the city with high enough rent that poor people wouldn’t want to use that public transport. If there are enough high rent areas to live, work, and recreate in connected by public transport this allows them to remove the expense of owning a car, which helps with the high rent (see NYC, DC, etc). However, if there are not enough high rent areas connected by public transport, or if that public transport connects with low rent areas, they would prefer to own a car and not use public transport.

22 It's Over December 12, 2013 at 8:13 pm

Or to paraphrase Stuff That White People Like, yuppies love all forms of public transportation, except the bus.

23 RPLong December 12, 2013 at 2:04 pm

Clearly we have different cities in mind.

24 Turkey Vulture December 12, 2013 at 2:16 pm

I think mulp’s is currently more common, though I’ve lived in the one you’re imagining more recently.

25 mavery December 13, 2013 at 8:55 am

DC certainly isn’t designed with a “no car” lifestyle in mind. It’s not nearly dense enough, and the public transportation isn’t a good stand-alone. Hence all of the “car substitutes” like Zip Car.

26 charlie December 12, 2013 at 1:36 pm

Somehow Rockville Maryland is the new center of urban life in America. A veritable midtown on the 270.

27 Dave December 12, 2013 at 2:14 pm

The push back in the comments in Slate is comical.

28 Sigivald December 12, 2013 at 2:14 pm

And yet somehow when it comes to parking spaces no politician in America is radical enough to suggest that the solution is to build as much parking as people want to pay for.

Of course not.

If you do that, the hippies and bicycle activists and “urban planners”* tend to complain, Because Cars Are Bad And Everyone Knows That.

And they might vote against you, unlike people who can’t find a parking spot and don’t even really realize it’s your fault.

(* with the caveats Finch points out above, but still.)

29 Turkey Vulture December 12, 2013 at 2:18 pm

Well most market-manipulation on the parking issue is actually in the direction of artificially reducing costs to drivers, at the expense of walkers/bike-riders/public-transit-takers. The bikers and hippies are losing.

30 TheAJ December 12, 2013 at 3:09 pm

If you do that, the hippies and bicycle activists and “urban planners”* tend to complain, Because Cars Are Bad And Everyone Knows That.

This this a parody? Hippies and urban planners complain when the Sigivald’s of the world insist that the correct price of parking is zero.

31 Michael Foody December 12, 2013 at 3:26 pm

Ha ha, OK. Cars aren’t evil but should everyone have to accommodate but should every business owner or residential developer accommodate cars even when doesn’t make sense? If I had a restaurant in the suburbs it would probably be in my interest to provide parking for my customers and I would decide what was enough parking based on what made sense for my business, rather than some formula based on the square footage of my establishment. I wouldn’t not provide parking because of some sort of weird culture war that you imagine is going on unless that somehow made sense for me.

32 TMLutas December 12, 2013 at 3:40 pm

The cure to that is to provide a service that lets you know whose fault it is when you can’t find a parking spot. So would you support a kickstarter to create such a thing?

33 Sean P. December 12, 2013 at 5:29 pm

Over the past few years, Seattle has undertaken many initiatives to make it harder to park and drive while simultaneously mandating that all new residential buildings include parking for as many cars as possible. This is working out about as well as you might expect.

34 Geoff Olynyk December 12, 2013 at 2:24 pm

From a Quora question on this, I talked a bit about the side effects of going to market pricing for parking spots.

Behavioral Economics: In your opinion, should the cost of a parking spot in the city vary according to supply and demand and fluctuate throughout the day and period of the year instead of operating on a first-come, first-served basis? Elaborate.

Yes, probably, for the reasons Isaac Gaetz mentions.

But, here’s one downside that most people don’t think of. When you put a price on things that used to be cheap (and thus under-supplied), it means it’s one more thing that you can’t have when you’re poor.

Under the old, inefficient system, it doesn’t matter if you are a working single mom, or a graduate student, or a successful brain surgeon. If you want a parking space on the road when parking is cheap, you’re going to have to get lucky. (Okay, many restaurants have valet parking and stuff for those with money, but let’s say you just want to park and shop downtown.) It’s a nice feeling, to grab that spot!

If the price automatically fluctuates so that supply just equals demand, so that the optimal 10% (or whatever it is) of spots are always free, that means that those downtown spots are going to be really expensive. And thus completely off-limits for those without money.

You get the same effect in lots of public spaces. If you don’t put a price on it, you get crowds and not enough supply, but it means that everyone suffers equally. Or, like, amusement parks. The advent of premium-priced “skip-the-line” tickets is like a whole new slap in the face to people without much money. There was an article about this in Esquire: Tom Junod on the Waterpark, the DNC, and Two Americas.

35 JWatts December 12, 2013 at 3:56 pm

About 4 years ago, before our first set of twins were born, my wife and I decided to visit 6 Flags Chicago. Since we were older, had money and were expecting this to be the last time we would do this as a couple, we splurged and bought the (Go to the front of the line + Ride twice in a row + Use a two way pager to reserve your spot) options. This was sort of expensive, but not as much as I expected. I don’t remember the cost, but it was roughly at the $150 range for both of us.

It was amazing how many rides we rode, almost always in the front seat. And since we got to ride twice in a row, we didn’t have to get out and could ride it again immediately. It was amazingly fun and privileged.

And it felt completely un-American. We furtively walked up the “special lane” to the front of the line, past the thronging crowds. Then we waited through the much shorter line for the first car. Then when the ride was finished, we stayed in the car. Inevitably the next riders complained and the attendant had to explain to them that we were allowed and they would have to wait for another cycle. One kid looked so distraught that we both just looked at each other, shrugged and got out.

It was a weird feeling. And I don’t think my wife and I will do it again.

36 GiT December 12, 2013 at 10:14 pm

If you haven’t you should read that Junod piece Geoff linked to. He really goes into that feeling. Maybe politicizes it in an egalitarian way you might not agree with but I think it’s an enjoyable read nonethless.

37 JWatts December 13, 2013 at 12:01 pm

I agree with his observed facts.

I disagree with his translation of the experience into an entirely speculative partisan class war.

“But politics is less about the power of policy than it is about the power of people — a measure, at last, of our associations. It’s still tribal that way, and the people I saw on Tuesday night at the DNC were my tribe — they looked like the people you see on line at Whitewater, with clothes on. And the people I saw at the RNC looked like the people cutting in front, by dint of the gold plastic bracelets on their wrists.”

I wonder when the author is going to write an article on the travesty of allowing $100K electric cars to use the HOV lanes?

The key issue is that there have always historically been different levels of access you can buy. In the original Shakespearean theaters, 400 years ago, there were the cheap seats (sans seats) vs the box seats. I’m sure you can find such examples going back millenia. Today there are countless examples, planes have different class passengers, roads are built with different class passengers, hotels, stores and restaurants specialize according to cost.

What has changed is that the classic American Theme parks from the 50’s to the 80’s were built on the egalitarian concept of One Class. Now they are moving to a tiered Class system. It’s been my experience that there are plenty of Democrats flying first class and buying box seat tickets at the theater and shopping at Whole Foods, etc.

38 Mark December 12, 2013 at 3:08 pm

Alex has missed the externality inherent in the issue. If the developer fails to provide enough parking, some users of the development will park off-property. If they take up the parking space on the curb in front of your house, you will suffer an external cost. (You may not have legal ownership to that parking space, but you suffer a loss relative to the pre-development status quo.) You will complain to your city council member.

If the city reacts by regulating the parking in front of your house with a zone parking ordinance, which is probably the most common response, (a) you will still be at least inconvenienced by having to display your eligibility for the residents-only exception, and (b) the city will have to enforce the ordinance. Fines collected may or may not pay for enforcement.
So the city chooses to address the externality up front. They may get it wrong, but it isn’t absurd.

39 Lord December 12, 2013 at 3:25 pm

The interesting thing is the places land value is maximized are just these sorts of places that take externalities into account while the places without it sprawl. Markets like cities but not dense tall ones. The question is why cities most often do. In this government achieves something a disparate set of owners cannot, and the inhabitants seem content with it.

40 jmo December 12, 2013 at 4:33 pm

Markets like cities but not dense tall ones.

Exactly, that’s why it’s so cheap to buy a home in Manhattan.

41 Lord December 12, 2013 at 7:58 pm

And why Manhattan is such a free market!

You want to compare prescribed markets like Manhattan with open markets like Houston.

42 chuck martel December 12, 2013 at 4:45 pm

Why should the city be able to restrict parking on public streets in residential neighborhoods to the residents? Don’t those same residents park other places?

43 Joshua December 12, 2013 at 5:36 pm

In many cities, residents are required to maintain the curb/sidewalk in front of their house, I’d say this entitles them to some stake in the street parking there.

44 mavery December 13, 2013 at 9:01 am

That’s absurd. It’s like saying, “I live near the airport, so I should get to use it for free.”

If you own the land the street is on, do whatever you want with it. But if its public property, you getting to park there for free prevents it from being used as a bus lane or a bike lane or whatever. If you wanted a parking spot, why not just build a garage? Oh, it’s expensive? Well, then I guess that’s the equivalent of the handout you’re getting for parking there. Freeloader.

I live next to a parking structure that charges $20 per night. Give me $7,000 per year and we’ll call it even.

45 Brandon December 13, 2013 at 3:46 pm

Um, how does that airport analogy hold at all?

46 Dean December 12, 2013 at 5:18 pm

It’s not an externality when more people try to make use of a free perk. No one’s entitled to a chunk of a public street. If that parking is necessary, sell permits. Enforcement more than pays for itself.

47 prior probability December 12, 2013 at 3:30 pm

The tragedy of the parking commons?

48 Lord December 12, 2013 at 4:20 pm

No politician has to propose that because we already have that, as much parking as people are willing to pay for, which is, not much, and not when there is free to be had. What you mean is charging for it so there is less, but this isn’t a market solution but a government solution creating a market to solve the problem of too much demand (because it is free) for too much supply (because it is dictated), resulting in less demand for even less supply.

49 Dean December 12, 2013 at 5:20 pm

Exempt that minimum parking regulations, by definition, create excess parking. They only come into play when the market wishes to supply less than the City Council would like.

50 JWatts December 12, 2013 at 4:44 pm

Tangentially off-topic:

Sad Beard (aka Matt Matt Yglesias) dropped this gem of a tweet yesterday:

“Here’s how Paul Ryan is like a girl doing oral and anal to keep her promise ring….”

51 mavery December 13, 2013 at 9:03 am

Are you arguing that taxes and fees are fundamentally different or that Yglesias is vulgar?

52 JWatts December 13, 2013 at 10:56 am

The latter. And, also the hypocrisy of Sad Beard complaining about Ryan pushing an increase in fees that Sad Beard would almost certainly support if Harry Reid had proposed it.

53 JWatts December 13, 2013 at 12:03 pm

Sad Beard probably wasn’t actually complaining about the increase so much as taking a cheap shot at Paul Ryan.

54 orinrpx777 December 12, 2013 at 5:00 pm

my Aunty Natalie got an awesome blue Audi S5 Coupe by working online. this page……… Tec202. COM

55 jmo December 12, 2013 at 5:03 pm

Does Alex have any grad students that he can task with investigating the economics and business model of these posts.

56 prior_approval December 13, 2013 at 8:59 am

The lack of a link makes it a dead end.

57 zbicyclist December 12, 2013 at 8:20 pm

What is this “Central planning is everywhere discredited except for central planning of parking places” idea? Many things related to motor vehicles involve central planning — roads, for one thing. Truck weight limits for another. Signage requirements. Safety equipment on vehicles. Lead out of fuel, ethanol in fuel. Lane widths. Red=stop, green=go. Speed limits. There’s almost nothing about U.S. transportation systems that does not involve central planning.

58 JWatts December 13, 2013 at 11:01 am

That’s not correct.

Central planning is not the same as a creating a common set of rules or codes to use. Central planning is the direct allocation of resources and specifies the output. Furthermore, a lot of vehicular rules are promulgated at the state and local level, ergo, they aren’t Central Planning.

59 Brandon December 13, 2013 at 3:47 pm

“Central planning” isn’t defined as “Federal planning” though.

60 JWatts December 13, 2013 at 4:36 pm

Ok, I suppose that’s technically correct, but I’ve never seen the term used with respect to a local or state government.

61 GW December 12, 2013 at 8:42 pm

Could Tyler or someone else remind exactly what the trick is that the market has to instantaneously grow new land for parking spaces in the middle of built-up areas whenever it demands more parking?

62 mavery December 13, 2013 at 9:05 am

Why does land need to materialize? When demand for office space increases, do we rely on extra offices materializing from nowhere in the middle of built-up areas?

Just build a new parking structure…. Oh, what’s that? It’s expensive because the land is very pricey in that area? Guess that’s the opportunity cost of having free parking.

63 JWatts December 13, 2013 at 11:04 am

“Could Tyler or someone else remind exactly what the trick is that the market has to instantaneously grow new land for parking spaces in the middle of built-up areas whenever it demands more parking?”

Here you go: http://lmgtfy.com/?q=Multi-storey+car+park+images

64 Willitts December 12, 2013 at 9:30 pm

Another economic issue and yet very little discussion about economics. Mark talked about an externality which begins to address the subject.

The reason for minimum parking is that neighbor businesses attract customers with cars, and the number of available spots will be less than optimal if left up to the business. This is because parking spots use valuable space and demand for their goods is variable while the cost of parking spaces is fixed. It is a terrible mismatch.

Parking is excludable, but sometimes not cheaply. Meters must be installed and policed. Parking garages must be built and managed. Parking is rivalrous when congested but not otherwise.

So the reason this problem is difficult is because we have a quasi-public good. A milk shake is a pure private good, and inapropos as an analogy.

A public parking structure available to all businesses can reduce some of the externality. This would be more efficient with validation so that heavy using businesses will pay more in variable costs.

The fixed costs are the problem. It would be difficult to find a decentralized solution for financing a structure or street parking. Thus, we often have government do this and apportion costs through property and sales taxes.

When it appears that parking is suboptimally provided by the planner, it is because they hold other factors, possibly market failures, in mind.

So I’ve described in economic terms why things sre the way they are. Does this motivate a decentralized solution? Possibly. The city would still have to allocate parcels for parking, but they could leave pricing, construction, and management up to private owners. If other types of commercial properties have higher expected NOI than a parking garage, the city might not find a willing investor if property type were voluntarily chosen. And with buildings growing taller, two dimensional parking will quickly become swamped.

Given that I havent seen too many fifty story parking garages, there might be serious diseconomies of height.

65 Brenton December 12, 2013 at 11:12 pm

Because of excessive zoning laws and parking regulations, the USA will never again see a city grow to be dense and comfortable to live in without a car, as NYC, SF, Chicago, etc were able to grow in this manner simply because the government regulations didn’t exist to the same degree back then. And now these cities are fast fading as places that a person of modest means can live in because of all these laws restricting further growth. I think this should be telling that some things need to change.

Regarding the “but they’ll park on the street!” argument…. who cares? If a street has free parking then why are some people argued to be more entitled to park than others? I own a house but I don’t own the street in front of my house. If free parking on a street is a problem then simply don’t have free parking, rather than require businesses to build more parking. Does anybody really go to Manhattan and think “this place would be a lot better if businesses provided enough parking for all of their customers and employees”? Besides the few that also wish that Manhattan had 160,000 residents instead of 1.6 million.

66 GiT December 13, 2013 at 8:42 am

Significant portions of NYC, SF, and Chicago also all grew in the absence of widespread car ownership, or any car ownership whatsoever. Might want to check on your explanatory variable there.

67 Brandon December 13, 2013 at 3:48 pm

I hear Europe has some old cities as well

68 Dave December 13, 2013 at 1:59 am

Isn’t the parking issue mostly about externalities? New developments that do not provide parking effectively reduce the number of available on-street parking stalls, creating problems for parkers who already live in the neighborhood. Those folks get angry and raise hell at city council meetings.

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