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Parking fact of the day
On average [in the U.S.] a new parking space has cost 17 percent more than a new car. Drivers may not realize it, but many parking spaces cost more than the cars parked in them, especially because cars depreciate in value much faster than parking spaces do...the parking supply is worth more than the vehicle stock.
That is from Donald Shoup's The High Cost of Free Parking, a detailed, economically insightful, data-rich, and lengthy, impassioned plea for charging people for parking spaces. Here is Dan Klein's excellent review of the book.
Posted by Tyler Cowen on February 25, 2006 at 06:01 AM in Books, Data Source | Permalink
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» Book review: The High Cost of Free Parking from Freedom Democrats
Thanks to Marginal Revolution for pointing me to Donald Shoup's The High Cost of Free Parking, "a detailed, economically insightful, data-rich, and lengthy, impassioned plea for charging people for parking spaces." MR also includes a link to a in-depth (1 [Read More]
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» Free as in free pollution parking from Mike Linksvayer
Tyler Cowen cites Donald Shoups The High Cost of Free Parking, which claims that On average [in the U.S.] a new parking space has cost 17 percent more than a new car. If I were lured by the temptation of urban policy I would certa... [Read More]
Tracked on Feb 26, 2006 1:31:16 AM
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Tracked on Feb 26, 2006 12:00:41 PM
» Economics of Free Parking from EconLog
Daniel B. Klein writes a review of The High Cost of Free Parking, by Donald Shoup. Shoup shows that the... [Read More]
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Comments
As a bicyclist, one thing that bugs me about curbside parking is that it makes a "parking lane" out of a would-be traffic lane. This often forces slow traffic (small vehicles: bikes, Segways, motorized wheel-chairs) into the same lane as fast traffic (large vehicles: cars and trucks), to everybody's detriment.
From the review, it doesn't seem that this topic was covered in the book. I'd love to see an analysis of this trade-off.
Posted by: Adam at Feb 25, 2006 9:41:39 AM
If a parking space is 20 by 10 (200 sq ft) and an acre of land
is 200 by 200 (40,000 sq ft) and in a suburban area, land sells
for $80,000 per acre, then a parking space would cost $400, plus the cost
of paving.
The only way a space can cost more than a car is if you are talking
urban areas with ridiculously expensive real estate. Another
reason not to live in cities, if you ask me...
Posted by: Michael at Feb 25, 2006 12:19:34 PM
$80,000 won't buy an acre in any Northeastern suburb I'd want to live in. More like $320,000, making the parking space cost $1600 (a bit more given the inevitable area around the space in order to get in, etc, much more given driveways or given extra lanes of street to accomodate a few parked cars, or search time if you have a few lanes of street full of parked cars). However, the suburbs are the natural habitat of cars, and I doubt anyone recommends doing away with free parking in suburbs. Any healthy urban area has a cost of land which is trivially much greater than the cost of average cars that can sit on that land even before considering search costs.
Posted by: michael vassar at Feb 25, 2006 2:06:46 PM
Klein's analysis of Shoup's "strategic" writing is interesting. He implies (to my reading, anyway) that Klein is almost-but-not-quite lying, largely by omission, so as not to spook his intended audience of car-hating suburb-hating free-market-hating urban planners. This explains why Klein doesn't suggest the obvious solutions: 1) private property rights, and 2) burning down the cities.
As a suburban dweller, I have to say I'm surprised that free parking is an issue. Out here, parking is both free and plentiful. The reason, of course, is that land is sufficiently cheap and in sufficiently private hands that developers voluntarily build huge amounts of parking; enough to satisfy the peak demand (the day before Thanksgiving for supermarkets, the day after Thanksgiving for retail stores, Mothers' Day for restaurants, etc) and far more than enough to satisfy average demand.
"But look at all that unused capacity! You could put entire office buildings on all that empty blacktop! Look at the wasted resources, the dead-weight loss! For God's sake, man, at least put in parking meters so you can establish a market price for parking and thus allocate resources efficiently!" You just don't get it, do you? Land is *cheap* out here. The relatively small cost of all that blacktop is cheerfully paid for by the business owners, who make it up in sales not lost by driving away customers who would grumble about paying $1.00 to park before spending $200 on the weekly groceries.
Why is land cheap out here? Because the population density is low - a square mile of land will sell for a lot less when there's only 2,000 people paying for it instead of 10,000. Why is density low? Because we don't need to live close to each other or to things like stores and offices. Why not? Because we can drive there. Why? Because there is abundant free parking everywhere we go. Why? Because land is cheap.
Now do you get it?
Posted by: eddie at Feb 25, 2006 5:31:07 PM
Sorry, that should have been "He (Klein) implies that *Shoup* is almost-but-not-quite lying" and "This explains why *Shoup* doesn't suggest the obvious solutions".
Posted by: eddie at Feb 25, 2006 5:37:30 PM
//The reason, of course, is that land is sufficiently cheap and in sufficiently private hands that developers voluntarily build huge amounts of parking; enough to satisfy the peak demand (the day before Thanksgiving for supermarkets, the day after Thanksgiving for retail stores, Mothers' Day for restaurants, etc) and far more than enough to satisfy average demand.//
The notion that a developer "voluntarily" builds more parking than he is required to is confounding to say the least. Perhaps you can enlighten us with specific examples, but from what I have observed, most developers are rational and only seek to meet the local jurisdiction’s requirements for parking. Most requirements are based on studies of established land use parking demands, and in some cases, can require that "worst-case" off-street parking capacity be provided. Why a developer would provide more parking than required is wanting in more thorough explanation.
Posted by: Rick at Feb 26, 2006 2:08:23 AM
As a suburban dweller, I'm wondering where the suburbs with cheap land are. Land is over a million bucks an acre where I live. And no developer voluntarily puts in one more parking space than zoning requires.
Posted by: Cardinal Fang at Feb 26, 2006 3:06:08 AM
The High Cost of Free Parking is anti-'sprawl' screed with what I can imagine is little tether to
actual reality. In the cities where land is expensive most people are required to pay for parking
and extremely so. As a result, many people living in New York do not even own cars. A rental space
in S.F. will cost you $400 /month or as much as $20/day. So how parking is still free in many of these
places I have no clue.
But even worse is the idea that parking in say Walmart's lot is "free." The fact is, it isn't, just
the cost isn't incremental. Of course not, Walmart doesn't want to scare away anyone away to Target
because they have free parking. (Which seriously, the easy way to probably destroy Wal-mart would
be for Wal-Mart to impose a parking fee while all other Big-Boxes don't.) Now, does the consumer
still pay for parking? Of course, but now it's included in the price of goods purchased.
Even if Wal-Mart doesn't own the lot and leases, Wal-Mart's lease will at least indirectly reflect the
parking. Which eventually get pushed out to the consumer. Yes it will dispersed, but that's
exactly, what Wal-Mart wants, as opposed to pushing away otherwise potential consumers.
Although never let reality get in the way of an anti-sprawl urban planner for which "light rail" is
always the answer. Not that it matters much, you can lay reality in front of those types forever
and they still will just believe "believe with all my heart" that trains and bikes will just solve
all our transportation woes.
Posted by: Joel B. at Feb 26, 2006 11:46:52 AM
"As a suburban dweller, I'm wondering where the suburbs with cheap land are. Land is over a million bucks an acre where I live."
Well, cheap is relative, isn't it? $1 million per acre is expensive compared to $2,914 per acre for Iowa farmland (http://www.extension.iastate.edu/news/2005/dec/061205.htm), but it's pretty cheap compared to $626 million per acre in Manhattan (http://www.newyorkmetro.com/nymetro/news/reasonstoloveny/15362/).
Digging up concrete numbers on the spur of the moment is hard, but what I did find shows a huge amount of variation along three axes: purpose, location, and time. Residential is cheaper than commercial, out-of-town is cheaper than in-town, Iowa is cheaper than New York, and everything was cheaper yesterday than today. If you think land is expensive where you are, go shopping for land closer to the city and let us know if it's more affordable.
"Perhaps you can enlighten us with specific examples, but from what I have observed, most developers are rational and only seek to meet the local jurisdiction’s requirements for parking."
I'll admit ignorance and defer to your observations. But even if the jurisdiction had no requirements at all, don't you think that shopping malls would build enough parking to let their tenants' customers reach their doors? That office parks would build enough parking to let their tenants' employees get to work?
Posted by: eddie at Feb 26, 2006 1:48:07 PM
Making those links easier to click on:
http://www.newyorkmetro.com/nymetro/news/reasonstoloveny/15362/
http://www.extension.iastate.edu/news/2005/dec/061205.htm
Posted by: eddie at Feb 26, 2006 1:50:47 PM
The issue of parking opens deep wounds for those who have any affiliation with George Mason University in Fairfax, Virginia. The university has been kind enough to offer parking, but not nearly enough for the amount of residential and commuter students that attend. To even be allowed to park on campus at any time, one must have a parking decal, or be faced with a parking ticket of an excess of $75. These little decals cost quite a bit each semester, and they don’t necessarily guarantee a parking space. In order to be ensured a space the cost of a decal doubles. To many students these prices seem ridiculous. However, I understand what the university is doing. There is simply too much demand and not enough supply. By raising the price of a decal, demand goes down and equilibrium can be met between supply and demand. Also, the university is trying to recoup opportunity loss. By putting in parking spaces the university losses the chance to build another academic building and allow even more students to come in and crowd the parking lots. So, all in all, George Mason is a brilliant school, but their parking sucks.
Posted by: Ann R. at Feb 26, 2006 9:46:37 PM
Here at the academic institution where I work in the Emirates all close-in parking is owned by the school. Parking was free, but the institution has grown. Now the institution gives every student and employee a voucher that they can redeem for cash, or for a parking decal. That system avoided the uproar that would have been created when the parking went from free to paid.
I've advocated that transferable decals be allocated by GPA thereby lowering the opportunity cost of good students (attracting more to the mix), and creating some study incentive for other privileged students who have a guaranteed job waiting for them as long as they get a degree - regardless of university career GPA. It makes for a fun example for discussion when teaching principles.
I remember back at Brown when Dan Spulber joined the department of economics and his university service was to serve on the parking university committee. It was quite amusing to witness how those meetings left Dan apoplectic.
Presumably university administrators create parking committees as a faculty time sink. Certainly that was the only rationale Dan could come up with as far as a constructive purpose for the use of the time of the other committee members. His time, of course, was wasted. Unless the experience inspired later work on organization decisionmaking.
Posted by: John B. Chilton at Feb 27, 2006 9:28:20 AM
Eddie and others: you are mistaken about how planning works in most suburbs. The statement " land is sufficiently cheap and in sufficiently private hands that developers voluntarily build huge amounts of parking;" Is genereally incorrect.
Ever hear of zoning ordinances? There is little voluntary about how many parking spaces a store provides. Any store that wanted to experiement with less parking would be forbidden by P&Z commision.
The suburbs have endles sprawls of asphalt because bureaucrats say so, not because of Adam Smith's Invisible Paver.
Posted by: tylerh at Feb 27, 2006 3:18:07 PM
Following up on my prior post, here a some links explaining how parking is determined throughout the country:
Arlington, VA, requires 2 1/2 parking spots per dwelling unit.
http://www.arlingtonva.us/Departments/CPHD/planning/studies/pdf/zoapipestem_plot_101603.pdf
Hillsboro, OR, sets the minimum and Maxium number of parking space for all sort of development
http://www.ci.hillsboro.or.us/Planning_Department/ZONE_ORD_VOL2/ZORD2TOC.pdf
Mason county, WA, provides a loving detail of how to provide parkin in this .pdf
http://www.co.mason.wa.us/code/Community_Dev/parking_standards_nov_2002.pdf
While this review quiz reveals the numbers generally used throughout the country:
http://www.cwp.org/COW_worksheet.htm
Posted by: tylerh at Feb 27, 2006 3:36:32 PM
For a reference point: We paid $41K for a 1/4 acre lot in the northwest suburbs of Minneapolis in 2000. I think same size lots go for about $100K now.
Posted by: George George at Feb 27, 2006 5:11:15 PM
The listing is long-gone now, but I remember seeing a listing for a parking space, in a gated garage, in the North Beach neighborhood of San Francisco, for sale. Asking price was $75,000. Compared to parking rental rates in the neighborhood, that's actually approaching reasonable.
(I believe it was part of a condominium building with excess parking spaces, so the purchaser was purchasing a share in the condo entitling him to park in a designated space in the garage, rather than living in one of the units.)
Posted by: Anthony at Feb 27, 2006 6:18:23 PM
In what universe, I wonder, is charging for parking something you have to beg for? My parking space at home is an itemized component of my monthly rent. Parking at work is only free for me because I work in the middle of the night (when there is an overwhelming surplus of parking space) and leave at 7am...if I worked days, it would be not merely charged, but prohibitively expensive.
Posted by: Matt at Mar 1, 2006 8:10:41 AM
There is no complaint if Walmart or Target want to offer free parking. The problem is that so much hidden money is shuffled around to pay for the entire car-based transporation system. Visibility of actual costs is the goal. Have the people who use the system pay for their use--or, clearly document the government financing so we can all see it.
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With all the environmental dammage caused by cars and trucks I think the moneies raised from parking taxes and gas tax should be used to enforce a strickter laws to protect the environment from older vehicles high emmissions.
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