Do minimum parking requirements matter?

W. Bowman Cutter, Sofia F. Franco, and Autumn DeWoody have a new paper titled "Do Minimum Parking Requirements Force Developers to Provide More Parking than Privately Optimal?" The abstract is this:

Minimum parking requirements are the norm for urban and suburban development in the United States (Davidson and Dolnick (2002)). The justification for parking space requirements is that overflow parking will occupy nearby street or off-street parking. Shoup (1999) and Willson (1995) provides cases where there is reason to believe that parking space requirements have forced parcel developers to place more parking than they would in the absence of parking requirements. If the effect of parking minimums is to significantly increase the land area devoted to parking, then the increase in impervious surfaces would likely cause water quality degradation, increased flooding, and decreased groundwater recharge. However, to our knowledge the existing literature does not test the effect of parking minimums on the amount of lot space devoted to parking beyond a few case studies. This paper tests the hypothesis that parking space requirements cause an oversupply of parking by examining the implicit marginal value of land allocated to parking spaces. This is an indirect test of the effects of parking requirements that is similar to Glaeser and Gyourko (2003). A simple theoretical model shows that the marginal value of additional parking to the sale price should be equal to the cost of land plus the cost of parking construction. We estimate the marginal values of parking and lot area with spatial methods using a large data set from the Los Angeles area non-residential property sales and find that for most of the property types the marginal value of parking is significantly below that of the parcel area. This evidence supports the contention that minimum parking requirements significantly increase the amount of parcel area devoted to parking.

The paper is here.  Here is a related paper, or here.

Comments

I have seen a lot of comments lately passionately arguing (1) that it would be folly to repeal parking minimums, but also (2) that entrepreneurs will loose money if they don't offer lots of parking to customers. These are not entirely inconsistant beliefs but they are definitely in tension. If someone is very sure of (2) as O'Toole says he is, then it is not obvious why such a person would also strongly oppose the repeal of minimums. To get there you need some other theory about why we desperately need mandated minimums that are below the rate at which the market would provide parking anyway. The tragedy of the commons argument gets bandied about as such a theory, but that isn't a slam dunk as you then need a story about why enforcement is impossible.

What is missing is a discussion about citizens having to pick up the tab for public parking ramps to benefit businesses.

The streets where I live are completely filled with cars parking where there is simply not enough space provided in the residential developments- parking shortages. db's point above misses the fundamental point- the developers who create the residential or commercial properties are not the ones that have to live there or visit there, and they build irresponsibly, trying to maximize the salable or leasable space and minimize the parking. The resulting traffic and loss of local road space to parking then becomes a cost born by the community.

There are a lot idiots out there that *want* to create parking shortages as a means of encouraging alternative transportation mechanisms, don't fall into their traps.

I retired after 27 years as a land use planner/code writer in the Pacific NW. 3 points. First, our parking requirements for commercial uses were pretty much in line with not only every other code's requirements in suburbs all over the US, but in line with the requirements of lenders who finance commercial development; those requirements were pretty static from the end of WW2 to the 1980s. Second, go take a look at commercial development in the Houston metroplex, which has no zoning. You couldn't tell their shopping centers, grocery stores and what-have-you from ours. Third, the typical shopping center parking lot/garage comes close to filling up during the Christmas holidays; the rest of the year, not so much.

Starting in the late 1980s we dropped our minimum requirements by quite a lot: I can't say it made much difference. So, I question the authors' conclusions about causation.

Of course it does, why else would it have ever occurred to set a minimum if it had no effect?

Quote: "This evidence supports the contention that minimum parking requirements significantly increase the amount of parcel area devoted to parking."

Yup. And the Sun rises in the East. If minimum parking requirements didn't increase the amount of space devoted to parking they would not be imposed (duh!).

Note that this result, as startling, even revolutionary, as it is, does NOT tell us whether minimum parking requirements cause "an oversupply of parking," much less whether such requirements are a good idea. Since landlords who don't provide adequate parking impose stiff costs on neighbors, parking requirements may be socially optimal. Think of them as a kind of Pigouvian tax (paid in kind) if you like.

(Stiffer policing of neighborhood parking is not an answer to the externality problem because policing is itself very costly. I suppose you could force the landlord to pay for the policing, but I suspect he would then find it cheaper just to provide more parking.)

Does it matter? Of course it matters! It's given bloggers something to talk about all week!

The justification for parking minimums is essentially a tragedy of the commons for parking on public streets. Instead of doing the efficient thing of pricing on street parking where the tragedy occurs(which would then also induce developers to build some parking), politicians attempt to hide the cost of free parking by forcing shop owners to pay for it(as always given elasticities the costs are still shared and now shared by people who do not drive).

Many,
There are plenty of planner types out there who try to argue that the parking minimums are efficient and do not place a cost on society. That is why this matters.

Astonerii,
Unfortunately most super conglomerates can afford the burden of a few extra square feet of parking lot. Mostly this hurts small shopkeepers.

Tom Fitz, Stephen Smith,
We could argue all day whether or not the regulations are stricter in the City of Houston, than the zoning in most other places. But I can tell you this, we do have Parking minimums. And also, the Houston Area does have zoning. In every Urban and suburban city that is not the City of Houston.

"For example, we are definitely not at the privately optimal level of contract murder"

How can you be sure of this assertion? Seems murder is a relatively extreme thing to contact, with or without laws.

I keep seeing this assertion that "if only neighborhood parking were properly priced" there would be no need for parking mandates. That is "assuming the can opener." We can't "properly price" street (and sidewalk, and vacant-lot, and partly-blocking-a-driveway) parking because we can't exclude people from it except by harsh and costly policing. The instantaneous direct cost to the user of a neighborhood parking spot is zero. The driver externalizes all the costs. (The threat of a fine can raise the expected cost of illegal parking but not by much at affordable levels of policing. Ask Gary Becker!)

Drivers will pay modest prices for parking spaces but not enough, in many neighborhoods, to guarantee parking-lot operators a profit, because lot operators have to compete with nearly-free (to users) neighborhood parking. Sufficient policing to deter neighborhood parking would be very costly-- probably more costly than parking mandates (which subsidize off-street parking spaces via a small diffuse and inescapable tax on all goods and services in the area collected and disbursed by landlords).

Off-street parking is underprovided by the free market because it can't normally compete with "free" (to the user) neighborhood parking. If you want off-street parking without mandates you'll have to create an artificial scarcity of neighborhood parking by harsh policing.

Cities implemented parking-provision mandates because they found they could not afford-- fiscally or politically-- harsh enough policing to induce landlords to provide unsubsidized off-street parking. (The fact that people pay more for parking in central business districts or other very congested areas doesn't contradict this analysis. In those places demand can exceed neighborhood parking capacity even when illegal spaces are considered.)

Thanks awp, of course I agree that parking needn't be priced at all where there is no congestion. I used the term "neighborhood parking" rather than "street parking" not to suggest bucolic suburbs blessed with miles of empty curbs, but to indicate that drivers will leave their cars in all sorts of places, not just in officially-sanctioned spots, and not just on public streets.

As for financing enforcement through fines, that has been tried and found wanting. Of course in theory you could increase the price or likelihood of fines until their product exceeded drivers' expected benefits from illegal parking, and pay for enforcement from fine money, but as a practical matter you can't.

(A) Outlandish fines are politically impossible (and impecunious scofflaws won't pay them anyway-- what are you going to do? Jail them? How much will THAT cost?). (B) Increasing the probability of getting a fine requires more hideously-expensive and lazy government-employee-union manpower than fines can pay for. (C) Enforcers will make both Type I and Type II errors which will piss off the voters, causing enforcement to be ratcheted down. (D) Enforcers will be corrupted rapidly and the public will incur gigantic deadweight losses.

One big advantage of subsidizing parking via mandated provision is that it eliminates nearly all the cops, bribes, disputes with neighbors, enforcement errors, and so-forth.

Well Circuit city is a relic, so maybe the focus on customer service was the better business model at Best Buy. I certainly wouldn't shop there myself, as everything is overpriced, but I'm frugal like that.

I guess I would ask the following questions.

If a community currently has adequate parking to serve the community, what happens if new development moves in that uses up limited resources, like parking. Aren't minimal parking requirements, to the degree parking is of value, compensation to existing tenants to allow new construction?

In some communities the conversion of property to a new use may increase the value of surrounding properties or it may decrease it.

I doubt it goes the same way in all communities.

Randy O'Toole in a recent blog post:
http://www.cato-at-liberty.org/free-parking-revisited/#utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Cato-at-liberty+%28Cato+at+Liberty%29

Two weeks ago, I responded with dismay to George Mason University economist Tyler Cowen’s op-ed against free parking. This led to a variety of responses in the blogosphere, none of which address my point. Instead, they all argue against the minimum-parking requirements found in many zoning regulations.

In particular, Cowen himself points to a study that found that Los Angeles’ minimum-parking requirements forced some developers to build more parking than they would have without such requirements. But Cowen’s op-ed was titled, “Free Parking Comes at a Price,† not “Minimum-Parking Requirements Come at a Price.† The op-ed was based on a book by Donald Shoup titled The High Cost of Free Parking, not The High Cost of Minimum-Parking Requirements.

Nothing I wrote defended minimum-parking requirements. Instead, I pointed out that, even without such requirements, most businesses still provide free parking for their employees and customers. It is one thing to oppose minimum-parking requirements as an unnecessary form of government regulation. It is another thing to favor government regulation mandating that private businesses charge for parking.

That certainly seems to be what Cowen favors. His article concluded, “if we’re going to wean ourselves away from excess use of fossil fuels,† then “imposing higher fees for parking may make further changes more palatable by helping to promote higher residential density and support for mass transit.† There are a lot of fallacies in those statements. Will higher residential density significantly reduce use of fossil fuels? Probably not. Will support for mass transit significantly reduce use of fossil fuels? Probably not. Even if you believe we excessively use fossil fuels, do indirect tools such as “imposing parking fees† make sense when more direct tools are available? Certainly not.

Claims that parking is subsidized would carry a lot more weight if 5 percent of the people drove and the other 95 percent had to pay 75 percent of the cost. Those are, in fact, the ratios for transit (less than 5 percent of American workers take transit to work but fares cover less than 25 percent of transit costs), which Cowen wants to promote. With driving, the numbers are practically reversed: discounting air travel, more than 90 percent of travel is by car and auto drivers pay more than 90 percent of the costs of driving.

I suspect someone has made the case for minimum-parking requirements: without such requirements, businesses might try to externalize some of their costs by letting someone else provide parking for them. But let’s ignore that. Cities should get rid of zoning codes that have minimum-parking requirements. (Cities should get rid of zoning codes period.) Cities should charge market rates for on-street parking and any publicly owned off-street parking. But even if these things happen, private businesses will still provide free parking to their employees and customers in many areas — in fact, practically everywhere outside of old downtowns.

"We can't "properly price" street (and sidewalk, and vacant-lot, and partly-blocking-a-driveway) parking because we can't exclude people from it except by harsh and costly policing."

I find parking meters work pretty damn well.

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