Thursday, December 1, 2011

Park It

Just in time for peak retail season, I want to take a deep look at the effects of car parking. I'm not the supreme expert on this - that would be Donald Shoup - but I do read a lot of research studies. Unfortunately, these studies have been no match for the Fear of Not Finding a Parking Space.

As a bicycle rider (and occasional driver), I can certainly sympathize with parking anxiety. After all, car parking spaces probably outnumber bicycle parking by twenty katrillion to one. I often think ahead about the parking conditions at my intended destination, and adjust my travel accordingly. And that's the point.

Parking options have a huge impact on travel choices. When you know there will be plenty of free parking where you are going, hopping in the car seems like the easiest choice - in fact, preferable to walking or bicycling across a huge parking lot. Let's say you are meeting a friend somewhere for dinner. If there is lots of free parking there, maybe you will both drive and meet each other there. Now suppose there is parking available, but you have to pay for it. That might inspire you to pick your friend up on the way and split the cost. Next, suppose that you will have to pay for parking, and you will have to hunt around for several blocks to find an open space (on the street or in a garage). At this point, you might start to wonder if there are other ways to get there - isn't there a train station a few blocks away, or maybe I could try that new bike path?

The opposite psychological effect is true too - if you take transit somewhere but have to walk past several parking lots to reach your destination, you might think that it would be easier to drive next time. Of course, if your city is just building low-density strip malls, office parks, and disconnected subdivisions, parking doesn't have a huge impact because the alternatives to driving are so poor anyway. But if they are trying to do a little smart growth or transit-oriented development, parking has to be on the table, for the above reasons and more. The situation in Atlanta where parking is now raising its head is in the development codes for the BeltLine.

Minimum parking requirements can be found everywhere. Even the city of Houston, which does not use zoning in the traditional sense, still mandates how much parking has to be provided for each type of residence, store, restaurant, business, etc. In the debate over government regulation versus free-market activity, parking is a doozy. A grocery store developer may have to purchase 4 times more property than the actual footprint of the store in order to build the mandated amount of parking. It's an enormous financial burden on businesses and the construction industry, and it ultimately forces them to give away, for free, something that has inherent value.

Parking requirements are generally based on peak usage, as calculated by some relatively limited studies. And by limited, I mean they looked at a handful of locations, maybe a few decades ago, maybe somewhere in suburban southern California, and then they require that much parking for a store in Buckhead relative to square footage, or number of seats, or whatever. It's neither scientific nor context based, but it is universal. The result is that, except for a couple of days before Christmas, we have waaaaay too much parking. And there is very little flexibility in these requirements. If you build a bar next to an office building, they each have to have enough parking for their peak usage, even though their peak hours occur at different times and they could easily share the same supply of parking.

Since each property has to provide its own proprietary on-site parking, property owners get very protective of its use. So if you drive to the store, and then want to eat at the restaurant right next to it, you may have to drive there or risk getting booted by the store's security force. Of course, property owners have a lot of incentive for being so possessive - parking spaces are expensive! You have to buy the land for them, and construct them, and if land is expensive you can build a multi-story parking structure at great expense. The figures I've heard for the price of each parking space is about $8,000 for an onstreet space in a nice residential neighborhood, about $10,000 for a surface lot space, and $30,000 to $50,000 for each space in a parking garage. The developer (or the department of transportation, for onstreet spaces) spends a ton of money to build that mandated parking, but guess what - they can't recoup their costs directly. Why? Remember Econ 101? We've mandated a huge oversupply of parking, and when supply greatly exceeds demand, prices drop to almost nothing. We have a parking glut.

Of course, developers don't just take a loss on all of that expense. They pass at least some of it on to their buyers or tenants. If it's commercial property, those costs show up in your bill, even if you walked there. If you buy a condo, you can't say "I don't need those parking spaces, so knock $60,000 off the selling price, please." We all subsidize those parking spaces, even if they are sitting empty.

We subsidize them in another way, too. Since there is no functioning market for parking, all of those spaces are effectively non-revenue generating. Think about what that means for the tax base. If 10%, or 50%, or 80% of each parcel is occupied by free parking, you are taking that much land out of the picture for development. If you can only develop 50% of your city's buildable land, rather than 100%, then you have to raise everyone's taxes in order to pay for the same mileage of roads, sewer lines, police patrols, etc.

Eliminating parking requirements would not mean an end of parking. It would just revert parking provision to the free market, and it would be a very gradual process to boot. There are only so many new developments that go up each year; existing properties really wouldn't be affected. But imagine the new scenario - a developer wants to build 100 units of residential property in a new five-story development. In the past, she would have been forced to build 200 parking spaces along with it (on average). Now, she can undertake her own research to determine how many parking spaces she actually thinks are needed. She sees that there is a bike path, shopping district, good sidewalks, and several transit lines (bus and rail) nearby, so she thinks that many of her residents will only own one car and that their guests will only drive 50% of the time. So, she can already save some money on parking. But then, a local parking company approaches her, and says they heard about her development and a couple others in the area, and that they would like to provide the parking facilities. Now, the parking company may use or refine parking projections from the residential developer and other proposed projects. The developer does not have to build or sell parking spaces at all; she can sell her residential units at a lower price point and offer buyers the opportunity to purchase one or more parking spaces in the new garage a few doors down. Buyers have more control over their transportation options and local businesses see a little more foot traffic. These changes will be especially important in a district like the BeltLine, where residents and businesses may already be paying a locational premium to be near the transit, trails, parks, and stores planned for this area, and who may intend to use the BeltLine instead of buying a car (or a second car).

One of the big fears about elimination of parking requirements is that developers will underbuild parking, and that this will result in shoppers or office workers filling up residential onstreet parking instead. There are two perspectives on this. On the one hand, you can offer residential parking permits or a similar mechanism to prohibit parking on residential streets. On the other hand, you can ask whether it is advantageous to reserve onstreet parking for local residents (and I say this as a homeowner in a mostly-single family neighborhood adjacent to the BeltLine). After all, you buy or rent the home, not the public street in front of it - the parking spaces themselves are paid for with a mix of property taxes, local sales taxes, and some gas taxes. Most people have room to add more parking to their lot if they are willing to give up some of their yard for it. Older neighborhoods may not have consistent off-street parking, but they could have alleys and decent access to transit, bikeable destinations, and sidewalks. One could also argue that by provided so much free parking to residents, we are simply enabling them to store unnecessary personal property at public expense (rarely-used second or third cars) and discouraging them from exploring other transportation options.

These ideas need to be discussed if we are going to successfully redevelop Atlanta, or anywhere, for walkable, bikeable development. There is a lot of confusion and some deep-seated fear of change. I highly recommend that you find a copy of The High Cost of Free Parking and read if from cover to cover before attending your next public meeting - you'll never see the city the same way again!


  1. An important topic. The first (teaser) chapter of "HCOFP" is available on Dr. Shoup's website, as well as a number of other articles...

  2. This is very well written. I am saving it for re-reading and passing on to others.