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You're Paying for "Free" Parking

June 15, 2010 By Conrad deFiebre, Transportation Fellow

Hidden in plain sight is a huge nonuser subsidy for driving, one that researchers say rivals U.S. spending on Medicare and national defense. But it's so engrained in our motoring behavior that it's practically invisible, at least until it's used up:

Somewhere around 99 percent of auto trips in the United States - to shopping, work, church, recreation or whatever - make use of 9-by-19 foot chunks of real estate for which motorists pay nothing directly. That doesn't mean the spaces are actually free; the costs of acquisition, paving and maintenance are spread among drivers and nondrivers alike in taxes, store prices and other economic mechanisms that emit no price signals to curtail demand for parking.

Not surprisingly, then, there's a whole lot of that demand. City planners even stoke it with requirements that new commercial developments provide enough parking to meet peak use. As one economist has put it, that's like defining the demand for food as the most ever consumed at free buffets.

Estimates of the annual capital and operating costs of "free" parking have ranged into the hundreds of billions of dollars, hardly an exaggeration when you consider that parking spaces in the United States probably cover more area than the state of Connecticut. No one knows for sure, but a recent Purdue University survey of just four states - Wisconsin, Illinois, Michigan and Indiana - counted 43 million parking spaces covering up to 673 square miles, not including curbside, residential driveways or more than one level of multistory ramps. That's 1.8 parking spots for every adult resident.

A dozen years ago, the University of Minnesota's Center for Transportation Studies estimated the annual costs of parking in the Twin Cities region at $1.1 billion to $3.9 billion. It projected the costs in 2020 at $1.7 billion to $6.1 billion. Of those totals, paid parking comprised no more than 6.4 percent.

Nationwide, it's been shown that the value of all parking places may exceed that of all U.S. roads or, alternately, all the cars on them.

Of course, all our cars wouldn't be worth much if we had no place to park them at our destinations. That's because, as UCLA economist Donald Shoup has pointed out in his book, "The High Cost of Free Parking," every transportation system requires three things: vehicles, right of way and terminal capacity. For rail transit, that's passenger cars, tracks and stations. For air travel, it's planes, FAA-regulated airspace and airports.

In these cases, passenger fares pay for at least part of all three elements. For motorists, the cost equation is much more complex. Drivers pay the full price of private vehicles, about half the costs of right of way (according to a recent Pew SubsidyScope report) and next to nothing for terminal capacity, AKA parking, even though it's practically everywhere and greatly valuable as a result.

Economists tell us this price imbalance leads to inefficiency, inequity and the environmental ravages of unchecked car culture. For example, if your employer lets you park free at the office or factory, you receive a subsidy that commuters who walk to work don't enjoy. And guess what? "Employer-paid parking encourages solo driving," Shoup says.

Research over more than two decades in seven urban areas showed that 60 percent more employees drive solo to work if the employer picks up the parking than when workers pay. Employer-paid parking also increases by 36 percent the number of cars driven to work. But Shoup found that when employers gave equal cash subsidies to motorists and pedestrians alike, the number of cars driven to work declined by 11 percent, employees drove 652 fewer miles a year on average and burned 26 fewer gallons of fuel.

Shoup also recommends that cities increase meter rates for curb parking to levels that will produce 15 percent vacancy, enough to eliminate the needless congestion plus wasted time and fuel resulting from drivers cruising for bargain-priced parking. Studies in many cities have attributed an average of 30 percent of all downtown traffic to such cruising.

"Because motorists pay nothing for parking, they own and use cars as if parking costs nothing, and traffic congestion results," Shoup writes. He adds: "Minimum parking requirements are a hidden tax on development to subsidize cars. If urban planners want to encourage housing and reduce traffic, why tax housing to subsidize cars?"

The invisible subsidy for parking was noted by scholars as early as the 1920s. But over the decades little has changed to reduce drivers' sense of entitlement to free parking. If government and businesses act to get all the prices and incentives for driving and parking right, there'll be lots of angry motorists.

But eventually, once we're weaned of the dole of "free" parking, we'll have a multimodal transportation network that's more efficient, equitable and able to meet the economic challenges of the 21st century.

 

  

 

Photo credit: Nina Slupphaug, Minnesota 2020

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