The Parking Problem

By Dom Nozzi



Local governments intervene strongly and disastrously with regard to the provision of parking by the private sector. 

Nearly all local governments have laws that require all private (and public) development to provide “adequate” parking. Doing so tends to powerfully underprice parking. Business people are not given the freedom to decide how much parking they need to be profitable and competitive. Instead, they are forced by government to provide what is typically excessive amounts of parking.

Of course, the ”free” parking that is provided over 98 percent of the time is not actually “free.” Instead, the cost is hidden. Business people large-employee-pk-lot-less-than-50-percent-for-spacesmust buy the land for parking and maintain the parking. Those costs end up increasing the price of the goods and services we pay businesses who are forced to provide such parking by local government.

And as Donald Shoup informs us, free parking is a “fertility drug” for cars. That is, more people drive a car than would have done so had there not been subsidized parking. Shoup indicates that parking is, by far, the largest subsidy in America. Because government laws requiring parking have distorted the parking market, businesses feel compelled to provide “free” parking.

Government must therefore eliminate the parking requirement law, and correct its decades-long mistake by again intervening in the market to adopt laws that require businesses to provide less parking, and charge market prices for those who use the parking (by using, say, parking meters). At private employment places such as a large office building, government must incentivize or require ”parking cash-out” to correct prior market distortions.

In sum, parking problems are almost entirely based on the inefficient pricing of parking, rather than a supply insufficiency. Improper pricing of parking distorts the market for driving and parking a car (which signals us to drive and park a car excessively and inefficiently).



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1 Comment

Filed under Urban Design

One response to “The Parking Problem

  1. Ian Collen

    worthwhile to bookmark, thanks

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