Donald Shoup speaks at Buffalo University on January 10. Photo: Bettybarcode/Flickr

Memo to the City of Los Angeles: stop trying to ruin Donald Shoup for the rest of us.

Back in 2008 and early 2009, city officials claimed to be following the teachings of the UCLA professor and Parking Rock Star/Guru when it announced increases in parking meter fees from throughout the city.  This has led to a misunderstanding of Shoup’s teachings throughout the Southland.  Instead of a complex urban theory where funds raised from increased revenues spur redevelopment and lead to a reduction in local vehicle miles traveled, L.A.’s officials recognized Shoup’s theory as “charge more for parking.”

This fallacy, that the City of Los Angeles is somehow following Shoup’s guidelines for parking and urban planning was on display in an otherwise sparkling profile of Shoup in this Saturday’s Los Angeles Times.

Cities are starting to listen. Los Angeles, San Francisco, Redwood City, Glendale, Ventura, Portland, Ore., and the District of Columbia are among those implementing or contemplating changes to hew more closely to Shoup’s vision.

But Los Angeles isn’t really following the concepts outlined in Shoup’s 2005 tome “The High Cost of Free Parking,” they’re just raising rates.  At the 2010 StreetSummit, Shoup himself distanced himself from L.A.’s parking schemes and even argued that there are many places where metered  parking fees are too high.

In the picture at the top of the article, we can see Shoup’s three top concepts for parking reform, let’s see how the city is doing.

1. Charge the right price for curb parking. The lowest price that will leave one or two vacant spaces on each block – performance based pricing.

According to Shoup himself, the city isn’t doing a very good job of this.  After watching a Shoup presentation last March, I wrote:

First, Los Angeles almost never charges an appropriate rate for street parking.  Shoup notes that it’s not uncommon to see a street with full meters and no place for a new driver to park their car, and then walk a block to see empty meters.  The basics of supply and demand will tell you that one street is charging too much for meters and another not enough.  Shoupian parking theories are a lot more complicated than “let’s raise rates,” and the city’s clumsy handling of last year’s raises certainly didn’t qualify.

In other words, the city isn’t meeting the grade.

2. Return the meter revenue to the neighborhood that generated it.

Nope, the city uses meter money to plug a hole in the general fund.

3. Reduce or remove off peak parking requirements.

There is almost no inertia to reduce parking requirements for development.  Just look at the enormous parking garages that seem to spring up next to every Transit Oriented Develop highlighted by Metro.

Unfortunately, this misunderstanding of Shoup’s theory leads to emotional attacks that aren’t reality based.  And when there’s an opportunity for someone to make a research-free attack on someone arguing that drivers should pay their fare share of the public’s cost for their transportation decisions, City Watch columnist Charles Tarlow will be there.

Back in the spring of 2008, Tarlow went on a one person crusade against Congestion Pricing on Los Angeles’ freeways.  Tarlow didn’t let the reality that where congestion pricing has been tried it has won the approval of all economic classes in the region stop him from arguing that charging drivers for congestion free trips is a scam to benefit the rich.

Today, Tarlow argues against Shoupian theory because its asking drivers to sometimes pay more to temporarily store their private property on public streets.  Tarlow doesn’t interrupt his rant to talk about the public benefits of true Shoupian theory beyond the benefit for drivers of having more access to meters.  Instead, following the lead of the Times’ and politicians such as then Transportation Committee Chair Wendy Greuel, he boils down the entire “Cost of Free Parking” to:

Sadly, parking is a serious problem in our city  and “Shoupdog” is only offering an exclusionary solution to our very public problem.  Raising the price of parking reserves that public resource for those who can afford it and takes parking away from everybody else.

Who would do such a thing?

As with his rants against congestion pricing, Tarlow is wrapping his argument in class warfare and claiming the mantle of supporting the car-owning poor.  As with congestion pricing, actual poor people would benefit most from Shoupian theory in a couple of ways.

The most obvious way is that a city that charges an appropriate rate for on-street parking and reinvests that money in the community will most likely have a thriving transit system.   For example, Boulder, Colorado pays for its award winning rapid bus system with parking meter fees (amongst other things).   Working poor in Boulder have a lot more transportation options than they would if Boulder embraced the Tarlow theory that car ownership is something that should be encouraged at the expense of everything else for people of all economic incomes.

Secondly, by eliminating parking requirements for new development, the cost of parking can be removed from the cost of renting or owning improved housing.  In other words, people who can’t afford a car or don’t want to drive one won’t be paying for a parking space they don’t want.

Dear Randal,

In your September 1 post on Cato@Liberty, you mentioned that the Cato Institute offers free parking to its employees.

When it comes to parking, which policy does public radio prefer, and which one is favored by the libertarian think tank?

I checked and found that not all employers in Cato’s neighborhood offer free parking. For example, consider National Public Radio, which is on Massachusetts Avenue three blocks from Cato. NPR charges all its employees the market rate for parking in the building. NPR has 125 parking spaces and it uses fair market prices to ration these scarce spaces among its 400 employees.

The different parking practices at NPR and Cato reveal quite different policy preferences. NPR prefers the free market while Cato prefers free parking.

Cato’s free parking severely distorts transportation prices. The market price of commuter parking in the commercial garage closest to Cato is $255 a month, so Cato’s free parking subsidizes the cost of driving to work by $255 a month. Because employer-paid parking is a tax-exempt fringe benefit, Cato pays the free parkers a tax-exempt subsidy of $3,060 a year ($255 x 12).

If the round-trip commute distance to Cato is 32 miles (the national average), and if commuters drive to work 22 days a month, Cato’s free parking reduces the cost of driving to work by 36¢ a mile ($255/22 days/32 miles). According to the American Automobile Association, the average operating cost of driving a car is about 18¢ a mile. Because the per-mile subsidy for parking is twice the per-mile cost of driving, Cato’s free parking reduces the out-of-pocket cost of driving to work by two-thirds. Free parking therefore grossly distorts market prices in favor of commuting by car.

In your campaign for market policies in transportation, I hope you will try to persuade the Cato Institute to charge market prices for parking, or at least to offer commuters the option to cash out their parking subsidies. Perhaps you might also write a post on Cato@Liberty about Congressman Earl Blumenauer’s bill (H.R. 3271) that would encourage many employers to offer parking cash out. I suspect that might even make the news on All Things Considered.

Donald Shoup
Department of Urban Planning
University of California, Los Angeles

Last week we published a reply from UCLA planning professor Donald Shoup to Cato Institute senior fellow Randal O’Toole, in which Shoup clarified his positions on parking policy and explained several ways in which government regulations favor the provision of free parking. In response, O’Toole ran this post on the Cato@Liberty blog. Streetsblog is pleased to publish Shoup’s follow-up, which suggests Cato estimate the price distortions that give incentives for the libertarian think tank’s employees to commute by car. By doing so, Cato headquarters could serve as a laboratory for leveling the commute subsidy playing field, an idea embedded in Oregon Congressman Earl Blumenauer’s Green Routes to Work Act.

Dear Randal,

UCLA planning professor Donald Shoup, author of The High Cost of Free Parking

Thanks for your Cato@Liberty post clarifying several points where we agree about parking policies.

You wrote that the Cato Institute offers free parking to its employees. The market price of commuter parking in the commercial garage closest to the Cato Institute is $255 a month (in Colonial Parking at 901 New York Avenue). At this market price, can you calculate the total market value of all the free parking Cato provides to its automobile commuters?

After examining the data, you may find the market value of the Cato Institute’s free parking is surprisingly high. My rough guess is at least $10,000 a month. That is one example of what I mean by the high cost of free parking.

But maybe I am wrong. I hope the Cato Institute will tell you the number of commuters who park free so that you can answer this simple question. What is the fair market value of all the free parking for commuters who drive to the Cato Institute?

My point is not to criticize the Cato Institute for its free parking, because 95 percent of all automobile commuters park free at work in the United States. My point is that you could do a great service to free-market transportation policy by using the Cato Institute as a case study to analyze how employer-paid parking distorts commuter transportation choices.

According to Randal O'Toole, the Cato Institute does provide free parking for employees at its Washington, DC headquarters. Photo: Wikimedia Commons

Valued at market prices, free parking at the Cato Institute reduces the cost of driving to work by $255 a month. If commuters drive the national average round-trip distance of 32 miles a day for 22 days a month, free parking thus reduces the cost of driving to work by 36¢ per mile ($255/22 days/32 miles). According to the AAA, the average operating cost of a car is about 18¢ per mile. Because the parking subsidy at work is twice the operating cost of driving to work, free parking at Cato reduces the out-of-pocket costs of driving to work by two-thirds. Free parking is therefore a huge price distortion in favor of commuting by car.

The Internal Revenue Code creates an incentive for this price distortion because free parking at work is exempt from both income and payroll taxes. Parking cash out can eliminate this price distortion. Parking cash out is a market-oriented policy whereby employers who offer free parking at work also offer commuters the option to choose its cash value in lieu a parking space. Parking cash out does not mandate parking charges because commuters who choose to drive can still park free. Parking cash out simply gives the same subsidy to every commuter, regardless of travel mode choice, while free parking gives a subsidy to drivers and nothing to other commuters. Parking cash out expands choice, which I assume is a core value of the Cato Institute.

A bill now in Congress would alter the Internal Revenue Code to reduce the price distortion in favor of free parking. Section 5 of H.R. 3271 (Blumenauer) would include parking cash out as a condition to qualify for the tax exemption for employer-paid parking. That is, the free parking would be a tax-exempt fringe benefit if employers offer commuters the option to cash it out. The bill would allow commuters to make their transportation choices at fair market prices.

Data from the Cato Institute can illustrate how H. R. 3271 would allow market parking prices to influence transportation choices, without eliminating free parking. I hope the Cato Institute will therefore provide the data necessary to estimate the total market value of all the free commuter parking it provides, and how parking cash out would affect the prices for commuting to its building. After all, if the Cato Institute will not make data available to analyze how market prices can improve transportation choices, who will?

Donald Shoup
Department of Urban Planning
University of California, Los Angeles

Sent in response to this post by Randal O’Toole on Cato@Liberty:

Donald Shoup on Free Parking
Posted by Randal O’Toole

Donald Shoup, the author of The High Cost of Free Parking, has posted a response to my first post about Tyler Cowen’s op ed against free parking. Shoup points out that I erroneously attributed proposals to him that are in fact only urged by his followers, such as maximum-parking requirements and requirements that all businesses charge for parking. I apologize for that.

In fact, Shoup’s book argues that cities should eliminate minimum-parking requirements and charge market rates for on-street parking. I favor these things as well. Where we may disagree is about the effects of these policies.

My post pointed out that many municipalities do not have minimum-parking requirements, but businesses still offer plenty of free parking to their employees and customers. Shoup asks for “a list of some of these.” Virtually all counties in Texas, most counties in Nevada, and many counties in Indiana have no minimum-parking requirements, and I am sure I could find counties in many other states as well. Unlike California, where Shoup lives, and Oregon, where I live, these states do not restrict urban development to within city limits or urban-growth boundaries, and developments in unincorporated parts of these counties offer plenty of free parking.

Much of Shoup’s response seems to assume that my posts were defending minimum-parking requirements. “City planners have no training that would enable them to estimate the demand for parking, and no financial stake in the success of a development,” says Shoup. “They know much less than developers do about how many parking spaces to provide for each project.” As I pointed out in my later posting on this issue, I entirely agree. My goal was to defend private provision of free parking.

That said, I think Shoup’s worries about the “high cost” of parking are overblown. As I pointed out in my first post, surface parking is cheap, and even structured parking is not terribly expensive in the long run. Most of Shoup’s analysis is not of the high cost of free parking but the high cost of minimum-parking requirements, and there the cost is only of the spaces that developers are forced to provide that they wouldn’t otherwise provide. Shoup and I seem to agree that businesses who want to free parking should be allowed to do so.

Unfortunately, many urban planners disagree; they want to set maximum-parking limits, and they often cite Shoup in their plans and proposals. The negative effects of such limits are likely to be as bad if not worse than minimum-parking requirements. Planners promote such limits in order to discourage driving, which planners say is bad.

Shoup himself relies on anti-auto rhetoric. “Ubiquitous free parking helps explain why American motor vehicles, by themselves, consume one-eighth of the world’s total oil production,” Shoup says, for example. “America’s extravagant consumption of imported oil to fuel our cars is not sustainable, economically or environmentally, and anything that is not sustainable must eventually stop.” But we can find many alternatives to “extravagant consumption of imported oil” without limiting people’s mobility the way many urban planners want to do.

Planners with Portland’s Metro, for example, have set a goal of allowing congestion on most of the region’s highways to reach level of service F (meaning stop-and-go driving). They also promote “traffic calming” (a euphemism for congestion building), “boulevarding” (a euphemism for taking lanes away from autos in busy thoroughfares), and other anti-auto policies. But their own analyses found that these policies would have very little effect on the amount of driving people do. The biggest effect came from a plan to require that all businesses in the region charge for parking — yet even that effect was small, estimated to reduce per capita driving by about 2 percent. Even though such a plan has not been put into effect, at least a few years ago Metro’s transportation models assumed that it would be put into effect sometime in the next couple of decades.

As I have shown at length, trying to save energy or reduce auto emissions by reducing driving is not cost effective, and the resulting reduction in mobility could have serious negative effects on our economy. Instead, it is much more cost effective to make the cars we drive more energy efficient and/or capable of using alternative fuels, and if oil prices go up that will happen without government coercion anyway.

Although Shoup teaches in an urban planning school, he is actually an economist, and he and I share many areas of agreement. I won’t even mind if it turns out that I am wrong: if cities get rid of minimum-parking requirements without imposing maximum-parking limits and it leads businesses to charge for parking that are now offering it for free, that’s just the market at work. My only concern is that many planners are using Shoup’s work to promote their own coercive agendas. I hope he responds to them as vigorously as he responded to me.

One more thing: Shoup asks, “Can you tell me if the Cato Institute offers free parking for its employees? If so, does it also offer commuters the option to cash out their parking subsidies?” I do not work in Cato’s Washington, DC, office, but as far as I know it does offer free parking to at least some of its employees and does not provide a cash-out option. Cato is currently expanding its building and I understand it is installing showers for cyclists, as required by DC zoning codes, and is not providing a cash-out option for cyclists (or other employees) who do not plan to use those showers. As a cyclist, I’ll probably use those showers from time to time on my visits to DC. Perhaps someday Dr. Shoup and I will write a paper titled, “The High Cost of Free Showers.”

Randal O’Toole • September 1, 2010 @ 4:30 pm

We’re reprinting this reply [PDF] from UCLA professor Donald Shoup, author of the High Cost of Free Parking, to Randal O’Toole, the libertarian Cato Institute senior fellow who refuses to acknowledge the role of massive government intervention in the market for parking, and the effect this has had on America’s car dependence. It’s an excellent guide to the misdirection, mistakes, logical fallacies, and falsehoods that form the foundation of O’Toole’s arguments.

Dear Randal,

I would like to comment on your August 16 post on the Cato@Liberty blog about “Free Markets for Free Parking.”

Shoup (left) and O’Toole (right). One of these gentlemen has written the definitive volume on parking policy. The other says he has yet to read
it.

You were responding to Tyler Cowen’s article in the New York Times, “Free Parking Comes at a Price,” in which Tyler explained some of the ideas in my book, The High Cost of Free Parking.

In commenting on Tyler’s article, you made several mistakes in describing my ideas and proposals. I will explain these mistakes, and if you agree with the explanations I hope you will post corrections on Cato@Liberty.

Before I examine your misunderstanding of what I have written, I will first summarize the three basic parking reforms I recommend in The High Cost of Free Parking: (1) remove off-street parking requirements, (2) charge market prices for on-street parking to achieve about an 85-percent occupancy rate for curb spaces, and (3) return the resulting revenue to pay for public improvements in the metered neighborhoods.

I will quote ten extracts from your post, and comment on each of them.

1.

“Shoup’s work is biased by his residency in Los Angeles, the nation’s densest urban area. One way L.A. copes with that density is by requiring builders of offices, shopping malls, and multi-family residences to provide parking. Shoup assumes that every municipality in the country has such parking requirements, even though many do not.”

Does
the Antiplanner, who is “dedicated to the sunset of government
planning,” really believe that government planners know exactly how many
parking spaces to require for every economic activity at every site in
every city?

Even Houston, which does not have zoning, has minimum parking requirements, and they resemble the parking requirements in almost every other city in the United States. Houston requires 1.25 parking spaces for each efficiency apartment in an apartment house, for example, and 1.333 parking spaces for each one-bedroom apartment. Here is the link to the minimum parking requirements in Houston’s municipal code.

Does the Antiplanner, who is “dedicated to the sunset of government planning,” really believe that government planners know exactly how many parking spaces to require for every economic activity at every site in every city, no matter how much the required parking spaces may cost and no matter how little drivers may be willing to pay to use them? Does the Antiplanner really support Houston’s minimum parking requirement of 1.333 spaces for each one-bedroom apartment because he believes that Houston’s government planners can accurately predict the “need” for parking at every apartment to one-thousandth of a parking space?

Since you say that many cities do not have minimum
parking requirements, can you provide a list of some of these cities?

2.

“Shoup assumes that . . . without such requirements there would
be less free parking. This last assumption is extremely unlikely, as
entrepreneurs everywhere know that (outside of New York City) 90 percent
of all urban travel is by car, and businesses that don’t offer parking
are going to lose customers to ones that do.”

Removing a minimum parking requirement means that a city
will never force developers to supply more parking spaces than are
profitable, but developers would be free to provide as many parking
spaces as they like. If developers did always voluntarily supply at
least as many parking spaces as cities now require, the minimum parking
requirements would be unnecessary. The only research I have seen found
that developers usually do not provide more parking spaces than cities
require (pp. 78–84 of The High Cost of Free Parking). Recent econometric
research also strongly suggests that minimum parking requirements force
developers to provide more parking spaces than they would voluntarily
provide in a free market [PDF].

3.

“Shoup portrays such free parking as a ‘subsidy’ because not all
people drive and so the ones who don’t drive end up subsidizing the
ones who do. But any business offers a variety of services to its
customers and employees, and no one frets about subsidies just because
they don’t take advantage of every single service. How often do you
actually swim in the swimming pools or work out in the exercise rooms of
the hotels you stay at?”

Every
person plays many different roles in life — tenant, homeowner, worker,
consumer, investor, and motorist. With bundled parking, we pay for
parking in all these roles except, usually, as motorists.

You use swimming pools and exercise rooms as examples of bundled
services at hotels, but cities do not require hotels to provide swimming
pools and exercise rooms. Suppose, however, cities did require all
hotels to provide swimming pools and exercise rooms, perhaps as a part
of a public health campaign. Cities could require all these swimming
pools and exercise rooms to be of at least a minimum size related to the
number of rooms or gross floor area in a hotel. For example, cities
could require every hotel to provide a swimming pool with at least 2,500
gallons of water per guest room. If cities did have minimum pool
requirements, I expect that almost all hotels would bundle the use of
the pools into the room rents. Would you then say that all these
swimming pools are the result of free choices made in a free market?
Would you say the market had demonstrated that hotel guests like to
swim? Would you say the minimum pool requirements do not subsidize
swimmers at the expense of nonswimmers? But let’s get back to parking;
even swimming pools have parking requirements, and here is the minimum
parking requirement for swimming pools in one city: 1 parking space for
every 2,500 gallons of water in a swimming pool (Table 3-4 in The High
Cost of Free Parking).

Every person plays many different roles in life — tenant,
homeowner, worker, consumer, investor, and motorist. With bundled
parking, we pay for parking in all these roles except, usually, as
motorists. Because we pay for parking indirectly, its cost does not
deter us from driving. Because off-street parking requirements force up
the supply of parking spaces, they “externalize” the cost of parking by
shifting it to everyone but the parker. Only if we pay for parking
directly does its cost affect our decisions whether to drive or not.

If cities require an ample supply of parking spaces for
every building, this saves everyone the trouble of thinking about
parking — or its cost. Parking appears free because its cost is widely
dispersed in slightly higher prices for everything else. Because we buy
and use cars without thinking about the cost of parking, we congest
traffic, waste fuel, and pollute the air more than we would if we each
paid for our own parking. Everyone parks free at everyone else’s
expense.

The issue is not simply whether parking is subsidized.
Even without minimum parking requirements some firms would choose to
offer free parking, just as some hotels offer swimming pools and some
coffee shops offer wi-fi. The real issue is whether the government
should mandate the parking supply.

When
the US Census Bureau surveyed owners and managers of multifamily rental
housing to learn which governmental regulations made their operations
most difficult, parking requirements were cited more frequently than any
other regulation except property taxes.

If a city like Houston will not allow any developer to build a
one-bedroom apartment without also providing at least 1.333 parking
spaces, is it any surprise that most landlords bundle the cost of
parking into higher rents for housing? As a result, we have free parking
and expensive housing. Cars are more affordable but housing is less
affordable. When the US Census Bureau surveyed owners and managers of
multifamily rental housing to learn which governmental regulations made
their operations most difficult, parking requirements were cited more
frequently than any other regulation except property taxes. (p. 141 in
The High Cost of Free Parking).

Off-street parking requirements collectivize the cost of
parking, because they allow everyone to park free at everyone else’s
expense. American drivers park free at the end of 99 percent of all
their automobile trips. If the cost of parking is hidden in the prices
of other goods and services, no one can pay less for parking by using
less of it. Off-street parking requirements thus change the way we build
our cities, the way we travel, and how much energy we consume. All the
required parking spaces spread the city out, and the greater travel
distances make driving almost a necessity. Free parking also reduces
the price of driving wherever we want to go, so the increased travel
distances combined with the reduced price of driving make cars the
obvious choice for most trips: 87 percent of all trips in the U.S. are
now made in personal motor vehicles. (pp. 621–625 in The High Cost of
Free Parking)

Off-street parking requirements produce the free parking
that everyone wants, but ubiquitous free parking helps explain why
American motor vehicles, by themselves, consume one-eighth of the
world’s total oil production. We import two-thirds of this oil and we
are paying for it with borrowed money. America’s extravagant consumption
of imported oil to fuel our cars is not sustainable, economically or
environmentally, and anything that is not sustainable must eventually
stop.

4.

“Shoup also supposes (and Cowen accepts) that universal parking
fees would greatly reduce the amount of driving people do. ‘Minimum
parking requirements act like a fertility drug for cars,’ Cowen quotes
Shoup as saying.”

Please cite any occasion on which I have recommended
“universal parking fees.” I am not even sure what you mean by this term.
If you mean all parking everywhere must have a substantial price at all
times, I most certainly do not recommend that.

Figure 12-1 in The High Cost of Free Parking shows what I
mean by the right price for parking, and the right price will often be
zero. For example, if half of all the parking spaces at a suburban
shopping mall are empty even when parking is free, it would not make
sense to charge for parking. On the other hand, if all of the curb
parking spaces in a congested business district are occupied and drivers
are circling every block in search of a vacant curb space, the price of
curb parking is too low. Here is the link to a video that shows how to set the right prices for curb parking.

5.

“Shoup claims that a single parking space costs, on average, 17
percent more than the cost of an average car, and as a result, the cost
of parking greatly exceeds the value of all automobiles in the country.
This is ridiculous… Even structured parking typically costs only about
$10,000 a space.”

Table 7-3 in The High Cost of Free Parking shows that
parking spaces built on the UCLA campus have cost, on average, 117
percent of the price of a new car in the years that the parking spaces
were built, but I did not rely on this figure to calculate that the cost
of parking exceeds the value of all automobiles in the country.

Using
data on the capital and operating costs of parking lots and parking
structures, I estimated that the subsidy for off-street parking in 2002
was between $127 billion and $374 billion, or between 1.2 percent and
3.6 percent of the gross domestic product. In comparison, in 2002 the
federal government spent $231 billion for Medicare and $349 billion for
national defense.

I relied on Census data to estimate that the cost of all parking
spaces exceeds the value of all the automobiles in the country. The
Department of Commerce estimated that the average value per vehicle was
$5,507 in 1997. This average value may seem low, but the average age of
all vehicles in 1995 was 8.3 years, and 62 percent of all vehicles were
more than five years old. The depreciation of the older vehicles
explains the low average value of $5,507 per vehicle. (Table 7-2 in The
High Cost of Free Parking)

There are more parking spaces than vehicles because
drivers must be able to park wherever they go, and many parking spaces
are vacant much of the time. Cities typically require enough parking
spaces to satisfy the peak demand for parking at every land use — at
home, work, school, restaurants, shopping centers, movie theaters, and
hundreds of other places — so that drivers can have convenient access to
all addresses at all times. To see the result, think of what happens
when almost all vehicles are parked at home in the middle of the night:
almost all the spaces necessary to meet the peak demand for free
parking at all other land uses are empty.

Cities require a specific number of parking spaces for
every land use, but no city collects data on its total parking supply.
No one knows the total number of parking spaces in the US, but the
eminent land-use planner Victor Gruen estimated that every car has at
least one parking space at home and three or four waiting elsewhere to
serve the same car. More recently, Davis et al. (2010) used detailed
aerial photographs to estimate the number of parking spaces in surface
parking lots in Illinois, Indiana, Michigan, and Wisconsin. Parking lots
were identified as paved surfaces with stripes painted on the surface
or where more than three cars were parked in an organized fashion.
Although the estimates did not include any on-street parking spaces, or
any parking spaces in structures (other than the top floor if the
structure has an open roof), or any residential parking spaces that are
not in parking lots, the total area occupied by parking lots in the four
states would cover about half the state of Rhode Island. In two cities
in Indiana for which there were detailed observations, parking lots
covered three times more land than parks.

Using this limited category of parking spaces (only the
spaces in off-street surface parking lots), Davis et al. estimated that
the parking supply ranged between 2.5 spaces per car in Indiana to 3
spaces per car in Michigan. Presumably, most cars also have one parking
space at home, and many more parking spaces are on the streets and in
structures.

To be extremely conservative, suppose there is one
parking space at home for every car and only two additional parking
spaces elsewhere (at work, school, supermarkets, and so on), for a total
of three parking spaces per car. Let us also take your
back-of-the-envelope estimate of $2,200 for the land and construction
cost of a surface parking space, an extremely low value. The cost of
the parking spaces available per car would be $6,600 (3 spaces per car x
$2,200 per space). In this case, the per-car cost of parking exceeds
the average value of a car ($5,507). If so, the total cost of the
parking supply exceeds the total value of all cars. And this estimate
does not include the cost of any parking spaces on the streets or in
structures.

Please cite the source of your statement that “Even
structured parking typically costs only about $10,000 a space.” The
national average construction cost for an above-ground parking structure
in 2010, according to Carl Walker Associates, is just over $16,000 per
space (excluding land value). Underground parking structures are even
more expensive. The most recent underground parking structure built at
UCLA, for example, cost $31,500 per space (Table 6-1 in The High Cost of
Free Parking). Yale is about to spend $20 million to build a 200-space
underground parking structure for its new School of Management, which is
a cost of $100,000 per space. Your rough estimates of $2,200 per space
for surface parking and $10,000 per space for structured parking are
probably far too low for parking lots and structures in many cities.

If the total cost of all parking spaces in the US exceeds
the total value of all the cars parked in them, and if drivers park
free for 99 percent of all their trips, the total subsidy for parking
(the total cost of parking not paid for by drivers in their role as
parkers) is huge. Using data on the capital and operating costs of
parking lots and parking structures, I estimated that the subsidy for
off-street parking in 2002 was between $127 billion and $374 billion, or
between 1.2 percent and 3.6 percent of the gross domestic product. In
comparison, in 2002 the federal government spent $231 billion for
Medicare and $349 billion for national defense. (Chapter 7 in The High
Cost of Free Parking)

Free curb parking may be the most costly subsidy that American cities provide for most of their citizens.

In addition, there is the subsidy for all the on-street parking
spaces. Consider a 36-foot wide residential street with two 10-foot-wide
travel lanes and two 8-foot-wide parking lanes: curb parking takes up
44 percent of the roadspace. Clearly, curb parking spaces account for a
significant share of the total cost of roads, and an accurate estimate
of the total subsidy for parking would take curb parking into account.
The US Department of Commerce estimates that the value of roads is 36
percent of the value of all state and local public infrastructure (which
also includes schools, sewers, water supply, residential buildings,
equipment, hospitals, and parks). Because curb parking occupies a
substantial share of road space, it must be a substantial share of all
state and local public infrastructure. Drivers do not pay gasoline
taxes while their cars are parked, except perhaps on the gasoline lost
through evaporative emissions, which pollute the air. Since drivers do
pay gasoline taxes while they are driving, curb spaces are subsidized
much more than the travel lanes are. Free curb parking may be the most
costly subsidy that American cities provide for most of their citizens.
(p. 206 in The High Cost of Free Parking)

6.

“Strangely, one of the examples Cowen uses in his
article is Manhattan, where (he claims) ‘streets are full of cars
cruising around, looking for cheaper on-street parking, rather than
pulling into a lot.’ Give me a break! I defy Cowen to find any free
parking anywhere in Manhattan, where ownership of a single parking space
can cost more than a median home in other parts of the country.”

I see that you retracted this no-free-parking-in-Manhattan claim in a later post.

Unfortunately, this retraction includes several new errors of fact.

7.

“Many streets in Manhattan offer free parking, albeit often with
the caveat that you have to move your car from one side of the street
to the other every night.”

New York does not require owners who park on the street
to move their cars every night. It requires owners to move their cars
twice a week so the city can sweep the streets under them. Most of the
curb parking spaces in Manhattan are free, on some of the most valuable
land on earth. As you say, a parking space in Manhattan can cost more
than a house in other parts of the country, so these free curb spaces
must provide an awesome subsidy for cars. And the competition for this
awesome subsidy requires cruising to find a rare vacant space. This
cruising for free parking wastes time and fuel, congests traffic, and
pollutes the air.

A study of cruising in one 15-block business district in
Los Angeles found that, over the course of a year, the search for
underpriced curb parking created about 950,000 excess vehicle miles of
travel—equivalent to 38 trips around the earth, or four trips to the
moon. And here’s another inconvenient truth about underpriced curb
parking: cruising those 950,000 miles wastes 47,000 gallons of gasoline
and produces 730 tons of carbon dioxide. If all this happens in one
small business district, imagine the cumulative effect of all cruising
in throughout the United States. (Chapter 14 in The High Cost of Free
Parking)

8.

“But this doesn’t change my main point, which is that it is one
thing for Cowen to argue that cities should not price parking below
market rates where there is a market for parking. I have no problem with
this. But it is quite another thing to argue, as many urban planners
following the Shoup model do, that private businesses should be required
to charge for parking (or be limited in how much parking they are
allowed to provide) in areas where the market rate for parking is zero.”

Please cite the source of a Shoup model that would
require businesses to charge for parking. Opposing minimum parking
requirements is very different from proposing minimum pricing
requirements.

I have supported the policy of “parking cash out” whereby
employers who offer commuters free parking at work also offer commuters
the option to choose the cash value of a parking space if they do not
take a free parking space at work. This policy does not mandate parking
charges because commuters who choose to drive can still park free.
Parking cash out gives the same subsidy to every commuter, regardless of
travel mode choice, while free parking gives a subsidy to drivers and
nothing to other commuters.

Case studies of employers who offer parking cash out in
Southern California show that it reduced vehicle travel to work by 12
percent — equivalent to removing one of every eight cars from the road
during peak commute hours. Parking cash out cost the employers only $2 a
month per employee because they saved almost as much on parking
subsidies as they paid in cash to commuters. Federal and state income
tax revenues increased by $65 a year per employee because many commuters
voluntarily traded their tax-exempt parking subsidies for taxable cash.
Employers said that parking cash out is simple and fair, and that it
helps recruit and retain workers. Parking cash out thus produces
benefits for commuters, employers, taxpayers, cities, and the
environment. It accomplishes all these goals simply by letting
commuters choose how to spend their own money.

Can you tell me if the Cato Institute offers free parking
for its employees? If so, does it also offer commuters the option to
cash out their parking subsidies?

9.

“Cowen’s complaint about Manhattan is not about free parking but
that the government is pricing on-street parking below the market. If
that were the extent of Shoup’s argument, I would have no problem, as I
noted in my blog last week. But Shoup’s goal isn’t market pricing of
public parking; it is to create artificial shortages of private parking.
He doesn’t want to simply eliminate the minimum-parking requirements
that are found in many zoning codes; he wants to replace them with
maximum-parking limits so that places like WalMart will not be allowed
to provide their customers with as much parking as they like.”

You have misunderstood what I recommend. Here are four
quotes about parking requirements in The High Cost of Free Parking:

“Most markets depend on prices to allocate resources — so
much so that it’s hard to imagine they could operate in any other way.
Nevertheless, cities have tried to manage parking almost entirely
without prices. . . cities have without a second thought imposed
planning requirements to ensure affordable parking. Rather than charge
fair market prices for on-street parking, cities require ample
off-street parking for every land use.” (page eight)

Why
do you say that planners are annoyed when developers voluntarily
provide more parking than zoning codes demand? Most off-street parking
requirements are a minimum with no maximum. Minimum parking requirements
imply that planners care only about having enough parking spaces, and
that there can never be too many.

“Planners cannot even agree on whether to require or restrict
off-street parking. Consider the diametrically opposed approaches in
the Los Angeles and San Francisco CBDs: Los Angeles requires parking,
while San Francisco restricts it. For a concert hall, Los Angeles
requires, as a minimum, 50 times more parking spaces than San Francisco
allows as the maximum. . . If some physicians prescribed bloodletting
and others prescribed blood transfusion to treat the same disease,
everybody would demand to know what is going on. But when city planners
do essentially the same thing, nobody questions the contradiction.” (p.
121)

“Despite their ambivalence on whether to require or restrict
parking, planners always regulate it. This behavior recalls a Soviet
maxim: ‘What is not required must be prohibited.’” (p. 121)

“Although market prices can allocate parking spaces
fairly and efficiently, cities now require off-street parking everywhere
— imposing enormous costs on the economy and the environment. Cities
can and should regulate off-street parking to improve its quality, but
they should deregulate its quantity and instead charge market prices for
curb parking. If cities deregulate off-street parking and charge the
right price for curb parking, market forces will improve transportation,
land use, the environment, and urban life. You will not pay for my
parking, and I will not pay for yours. Instead of planning without
prices, we can let prices do the planning.” (p. 499)

I did not mention WalMart anywhere in The High Cost of Free Parking.

10.

“The empirical question is: do shopping malls, office parks, and
companies like WalMart provide parking for their customers and employees
because of zoning mandates, as Shoup claims? Or would they and do they
provide parking just because it is good for their businesses? Texas
counties are not allowed to zone, yet shopping centers and office parks
in unincorporated Texas still provide plenty of parking. Much to
planners’ annoyance, many developers elsewhere routinely provide more
parking than zoning codes demand. This suggests that free parking is a
free-market choice, and Cowen, who generally supports free markets,
should have no objection to it.”

Your “empirical question” attacks a straw planner. I have
never said that developers provide parking only because of zoning. I
have said that zoning often forces developers to provide more parking
than they would voluntarily choose to provide in a free market, where
they take into account both the cost of providing the parking spaces and
the revenue the spaces will generate. So please cite the evidence for
your statement that many developers routinely provide more parking than
zoning codes demand.

Why do you say that planners are annoyed when developers
voluntarily provide more parking than zoning codes demand? Most
off-street parking requirements are a minimum with no maximum. Minimum
parking requirements imply that planners care only about having enough
parking spaces, and that there can never be too many. Furthermore, the
planning approvals for specific projects often require developers to
provide more parking spaces than the zoning code requires. Few planners
are annoyed when developers provide more parking than the code requires;
they are annoyed when developers try to provide less parking than the
code requires.

All the evidence I have seen suggests that developers
often request planning variances to provide fewer parking spaces than
the zoning codes require, because these requirements can seriously
overestimate the peak demand for free parking. Developers must
commission expensive transportation studies to justify a planning
variance. Consider the results in a study commissioned by Home Depot
for of the peak parking occupancy at its stores in the Southwest United
States. The Parsons Transportation Group observed the parking occupancy
at hourly intervals at 17 Home Depot stores on a Saturday, the busiest
day of the week, and found “no correlation between the square footage of
a store and its resultant peak parking demand.” Parsons used the sales
data at each store to predict its peak parking occupancy on the
5th-busiest day of the year, which was selected as the “design day” for
the parking supply. As Parsons explained, “Choosing the 5th-busiest day
as the design day would mean that some customers may not be able to
find a parking space immediately during the peak hour of the busiest
four or five days of the year; however, they should have no problem
finding a parking space in the lot at any other time.”

Parsons then compared these estimates of peak parking
occupancy with the number of spaces that cities typically require at the
rate of 5 spaces per 1,000 square feet of floor area. The average
municipal parking requirement based on floor area was more than double
the estimated peak parking occupancy on the 5th-busiest day at a Home
Depot store. That is, the study commissioned by Home Depot found that
cities required twice the number of parking spaces needed to meet the
peak demand for free parking at Home Depot stores at the busiest time of
the year. (pp. 35–37 in The High Cost of Free Parking)

City planners have no training that would enable them to
estimate the demand for parking, and no financial stake in the success
of a development. They know much less than developers do about how many
parking spaces to provide for each project. Planners may, at best,
know a little about the peak demand for free parking at a few land uses,
but they know nothing about the marginal cost of parking spaces at any
site, or about how to estimate the demand for parking as a function of
its price. Markets will quickly reveal the demand for parking if cities
cease requiring off-street spaces. Developers, landlords, and
residents will all be able to make their own independent decisions about
the right number of parking spaces. Market-priced parking will allow
cities to evolve naturally in response to developers’ costs and
citizens’ preferences, while minimum parking requirements force
evolution toward car dependency and sprawl. In planning for an
uncertain future, flexible prices are far better than rigid
requirements. Could things be any worse if there were no planning for
parking at all?

The vision behind most planning for parking is a drive-in
utopia, and cities legislate this vision into reality for every new
building, regardless of the cost. Off-street parking requirements that
satisfy the peak demand for free parking are, in reality, free parking
requirements. Planners may believe in the immaculate conception of
parking demand, and economists may believe that market choices reveal
consumer preferences for travel by car. But the demand for parking was
not immaculately conceived, and it does not result from consumer
preferences revealed in a free market. Free parking is not always a
free-market choice. Instead, governments and the market coupled long ago
to produce today’s swollen demand for cars and parking.

After he has studied the evidence and reconsidered the
issues, I hope the Antiplanner at the Cato Institute may decide to
condemn rather than condone a complex web of wasteful and harmful
minimum parking requirements that severely restrict the use of private
property.

Well, that’s about it for pointing out mistakes in your
blog post. Because you have said that you did not read The High Cost of
Free Parking, I can understand why you have some misconceptions of what
is in it. If you had read the book, you would probably have found much
with which you agree. I do not expect that you will want to read a
733-page book on parking, however, so here are the links to a few sites
that will give you a quick view of what’s in the book.

• A video of how San Francisco sets market prices for curb parking
• A video of a presentation on parking at Yale
• A proposal for pricing curb parking [PDF]
• An op-ed piece in the New York Times
• The first chapter of The High Cost of Free Parking [PDF]
• Book reviews of The High Cost of Free Parking [PDF]
• Roughly right or precisely wrong in ACCESS [PDF]
• People, parking, and cities in ACCESS [PDF]
• Turning small change into big changes in ACCESS [PDF]
• Cruising for parking in ACCESS [PDF]
• Playing with parking fees and matchbox cars
• Parking cash out in ACCESS [PDF]
• A video about parking cash out
• My website

I did not spend all this time simply to send you a
personal message about your blog post. If you take responsibility for
the accuracy of the facts you have confidently stated on Cato@Liberty,
and if the Cato Institute stands behind the accuracy of what its staff
members post on its blog, I hope you will use the information in this
message to correct all the errors in your original post. If your post is
so careless with the facts and so filled with errors, and it is not
corrected or retracted, what should one assume about all the other posts
on Cato@Liberty?

Donald Shoup
Department of Urban Planning
University of California, Los Angeles

Original post by Randal O’Toole on CATO@LIBERTY:

Free Markets for Free Parking
Posted by Randal O’Toole
August 16, 2010 @ 7:49 am

I am disappointed that the distinguished George Mason University
economist, Tyler Cowen, has fallen for the “high-cost-of-free-parking”
arguments of UCLA urban planner Donald Shoup. Shoup is an excellent
scholar, but like many scholars, he has the parochial view that the city
that he lives in is a representative example of what is happening
everywhere else.

Should free parking be a thing of the past?

Shoup’s work is biased by his residency in Los Angeles, the nation’s
densest urban area. One way L.A. copes with that density is by requiring
builders of offices, shopping malls, and multi-family residences to
provide parking. Shoup assumes that every municipality in the country
has such parking requirements, even though many do not, and that without
such requirements there would be less free parking. This last
assumption is extremely unlikely, as entrepreneurs everywhere know that
(outside of New York City) 90 percent of all urban travel is by car, and
businesses that don’t offer parking are going to lose customers to ones
that do.

Shoup portrays such free parking as a “subsidy” because not all
people drive and so the ones who don’t drive end up subsidizing the ones
who do. But any business offers a variety of services to its customers
and employees, and no one frets about subsidies just because they don’t
take advantage of every single service. How often do you actually swim
in the swimming pools or work out in the exercise rooms of the hotels
you stay at?

Shoup also supposes (and Cowen accepts) that universal parking fees
would greatly reduce the amount of driving people do. “Minimum parking
requirements act like a fertility drug for cars,” Cowen quotes Shoup as
saying. Metro, Portland’s regional planning agency, submitted this
question to its transportation model and concluded that requiring all
offices, shopping malls, and multi-family residences to charge for
parking would reduce driving by about 2 percent. The model showed that
charging for parking has a greater effect on driving than spending
billions on light rail, building scores of transit-oriented
developments, or increasing the urban area’s population density by 20
percent. But 2 percent still isn’t going to do much to relieve
congestion or solve any of the other problems Cowen associates with
driving. Plus he never really explains why he thinks reducing mobility
is a good idea in the first place.

Shoup claims that a single parking space costs, on average, 17
percent more than the cost of an average car, and as a result, the cost
of parking greatly exceeds the value of all automobiles in the country.
This is ridiculous. Most free parking is surface parking, which costs
about $2,000 a space plus the cost of land. In areas that have not used
urban-growth boundaries and similar tools to create artificial land
shortages, vacant suburban land with urban services typically costs
about $20,000 an acre. Since each acre can hold about 100 parking
spaces, the total cost is about $2,200 per space. From the point of view
of a business owner, this cost can be amortized over 30 years at 6
percent, for an annual cost of about $160. If that parking space is used
by just two customers a day, the cost is about 22 cents per customer.
That’s pretty trivial, and the costs of collecting fees for such parking
would probably be greater than the parking itself. Even structured
parking typically costs only about $10,000 a space (or, using the above
assumptions, $1 per customer), but structured parking is rarely provided
for free.

Strangely, one of the examples Cowen uses in his article is
Manhattan, where (he claims) “streets are full of cars cruising around,
looking for cheaper on-street parking, rather than pulling into a lot.”
Give me a break! I defy Cowen to find any free parking anywhere in
Manhattan, where ownership of a single parking space can cost more than a
median home in other parts of the country.

Cowen’s complaint about Manhattan is not about free parking but that
the government is pricing on-street parking below the market. If that
were the extent of Shoup’s argument, I would have no problem, as I noted
in my blog last week. But Shoup’s goal isn’t market pricing of public
parking; it is to create artificial shortages of private parking. He
doesn’t want to simply eliminate the minimum-parking requirements that
are found in many zoning codes; he wants to replace them with
maximum-parking limits so that places like WalMart will not be allowed
to provide their customers with as much parking as they like.

The empirical question is: do shopping malls, office parks, and
companies like WalMart provide parking for their customers and employees
because of zoning mandates, as Shoup claims? Or would they and do they
provide parking just because it is good for their businesses? Texas
counties are not allowed to zone, yet shopping centers and office parks
in unincorporated Texas still provide plenty of parking. Much to
planners’ annoyance, many developers elsewhere routinely provide more
parking than zoning codes demand. This suggests that free parking is a
free-market choice, and Cowen, who generally supports free markets,
should have no objection to it.

Randal O’Toole • August 16, 2010 @ 7:49 am
Filed under: Energy and Environment

It's no secret that Livable Streets advocates are big fans of the theories of Donald Shoup.  The Shoupista that introduced him on Saturday referred to him as "Shoup Dogg," and Streetsblog prefers to sing "Shoup there it is."  These kind of salutations for an Economics professor who dresses the part of the academic activist from his tweed jacket to a t-shirt that reads "All may park, ALL MUST PAY" may seem silly; but his message for Angelenos is not.  Our parking policy doesn't just make bad economic sense, it's also playing a major role in holding our city back.  The UCLA professor is considered one of the foremost expert at parking policy, and when it comes to his host city; he doesn't like what he sees.

But first, a quick overview of the Shoupian theory, made famous by the book "The High Cost of Free Parking."  When cities undercharge for street parking, they encourage people to "cruise for parking" instead of just parking close to where they need to go.  This creates an average increase of a half mile per trip, which rapidly adds up for even a cozy community such as Westwood.  Also, the municipality is missing out on a revenue stream that should be reinvested in the community and become a fund for urban renewal.  A local example of a city getting it right is the revival that South Paadena has seen in recent decades because of an intelligent use of their parking resources.

So what is Los Angeles getting wrong?  After all, didn't then City Council Transportation Committee Chair Wendy Greuel name-drop Donald Shoup every chance she had when the city raised it's parking rates and increased meter hours last year?

Parking rock stars don't do their own tech support.

First, Los Angeles almost never charges an appropriate rate for street parking.  Shoup notes that it's not uncommon to see a street with full meters and no place for a new driver to park their car, and then walk a block to see empty meters.  The basics of supply and demand will tell you that one street is charging too much for meters and another not enough.  Shoupian parking theories are a lot more complicated than "let's raise rates," and the city's clumsy handling of last year's raises certainly didn't qualify.

Second, the city used its revenue to partially plug a hole in the general fund, and gave none of it back to the local community.  These are the basics of Shoupian policy, that meters must be priced appropriately and repeatedly, and that the money has to go back to the community.

So how can the city fix this mess?  The first thing is that the City Council shouldn't be passing meter rates for every street.  Instead they should be passing a goal for metered parking that reads something like, "by xxx every block in the city should average nearly 87% occupancy for its metered spaces."  This would allow for the LADOT to adjust rates appropriately for every metered block in the city until the city is maximizing its revenue and use of its spaces.  Similarly, the Council should pass a resolution that a certain percentage of the parking revenues are returned to communities from which they come.

That leads us to our third problem, the city is still reliant on the ground-breaking technology of the 1930's, the parking meter.  Yes, there are some smart spaces available, but not enough of them.  Using electronic machines would allow LADOT to adjust the parking rates so that it costs more to park at peak hours than non-peak.  "Congestion parking" is needed to insure the maximum usage of spaces.  "How many other payment systems have remained the same since 1935?" Shoup rhetorically asked?  There was no need for anyone to hazard a guess.

Fourth, the city doesn't make good use of its neighborhood parking programs.  While as a resident of certain areas of the city I can buy a permit to park on my local street, everyone else either gets a ticket or can only be there for certain hours; a non-resident working in the same area cannot.  Thus, in many places local streets are deserted in the middle of the day and laborers are crammed into parking lots that aren't really necessary.  Charge those people for non-resident passes, and return the money to the community, and you eliminate a need for off-street lots and create a new revenue stream for the community.  As Shoup himself noted, "Nobody wants a lot of freeloaders parking in their neighborhoods."

But perhaps most damningly, Los Angeles doesn't just encourage developers to provide parking; it requires them to do so.  Have you ever seen an overhead shot of Downtown Los Angeles?  Dang!  That's a lot of parking!

Before the question and answer portion of the program, Shoup's students made a brief pitch for "cash out parking" in light of the changes in state law.  Streetsblog has long been a fan of this program, and I encourage you to read more about it, or just listen to Gary's interview above.

Some ideas just refuse to die.  Less than a year after the City of Los Angeles moved to end it’s free-meter parking for hybrids program, a new proposal to allow only the highest tech and cleanest cars to park for free has resurfaced.  The Council resolution asking LADOT to study the program was introduced by Council President Eric Garcetti and sponsored by Downtown Council Woman Eric Garcetti and "Tom LaBonge for Bill Rosendahl."  Despite the presence of LaBonge and Rosendahl as sponsors of the legislation, they led Transportation Committee in expressing concerns with the newest free-parking for expensive, high-tech, cars scheme.

Garcetti’s resolution would apply to many less vehicles than the program that was scrapped earlier this year.  Instead of all hybrids that qualified for the state’s HOV exemption sticker, only the cleanest cars would qualify.  Only electric and zero-emission vehicles would qualify, cars which get a white sticker, pictured above, from the state.  While the state no longer hands out the more ubiquitous yellow stickers to fuel-efficient hybrids, it is still handing out the white stickers to those that can afford it.

One of the main objections that Council Transportation Committee Chair Bill Rosendahl had with the old free-parking plan when he single-handidly stood up to unanimous opposition on the Council and eventually succeeded in ending that program; was that the program was not encouraging people to buy hybrids but rewarding them for doing so.  Because there were no more yellow stickers being handed out, the program wasn’t providing an incentive for people to buy hybrid cars.  This argument resonated with the Council and the program was halted.

While that argument won’t have the same strength this time, there are still plenty of reasons to not give away parking to zero emission vehicles as an incentive for people to buy them.  While there are plenty of economic reasons and transportation reasons to not give away parking.

First, the economic ones.  While the city doesn’t yet know how much revenue they would lose if the program went forward, we do know that there would be some loss.  Conversely, we have no idea if the program would lead to one more zero-emission vehicle being purchased.  As the State Senate and Assembly begin debate on whether to renew the "Access Ok" program due to expire in 2011, Caltrans has admitted there is no way to track whether or not even one vehicle has been purchased as a result of their giveaway.  When asked, Amir Sedadi, representing LADOT, couldn’t give a firm answer as to how many cars had been purchased as a result of the city’s parking giveaway.

This argument had the most traction with the Councilmen present.  Councilman LaBonge, who is trying to reduce the parking meter hours for business areas in his district, expressed concern that this program would require higher rates for other drivers.  When reminded, Councilman Rosendahl remembered his quote to the Daily News last January that:

…there’s plenty of other great benefits to having a clean-fuel car. 
With the city budget in the shape it’s in, we can’t afford to leave any
‘gold in the gutter.’

From a transportation angle, such a proposal would also add Vehicle Miles Traveled (V.M.T.) to metered areas.  As Donald Shoup has taught, and Santa Monica has learned, when you give away parking you reduce the chance that people will pay for it elsewhere.  In other words, cars will cruise for spaces adding an average of a mile to each trip taken to a metered area by a white-stickered car.

Joe Linton raised a different concern at the hearing, quoting an old riddle.  "When does a Prius and a hummer have the same carbon footprint?  When they’re parked."  Linton’s point was that a parking space has a carbon footpring and environmental cost by itself and giving them away in the name of clean air is a bit of an oxymoronic idea.

I should note that the LADOT was officially "in favor of such a program" but Sedadi didn’t seem very enthusiastic about the program.  Several times he dodged a question from Councilman LaBonge about "what he would do," instead insisting he was happy to do whatever the Council wanted.

In the end, the LADOT was tasked with reporting back to the council about the costs and benefits of the plan at an unspecified date in the future.  The Transportation Committee seemed happy to wait to see if the state re-programs their "Access Ok" program before moving forward.  But waiting for the state might not be the best way to go.  Even if they do re-up the program, the lobbyists pushing for its extension are lobbyists for the auto-industry not environmental groups according to a report from the Sacramento Bee.

A coalition of activists for seniors and the disabled went to federal court to try and force Caltrans to meet federal safety standards for sidewalk, intersection and other pedestrian amenities.  The group charges that when doing road construction, our state DOT is ignoring the federally mandated fixes and upgrades that are required by the American with Disabilities Act (ADA). 

An attorney for the plaintiffs tells the Times that data from Caltrans from 2001 to 2006 shows that the agency failed to install about 1,000 required curb ramps during road improvements. The 1,000 missing improvements doesn't include curb ramps that were installed but don't comply with federal law.

Caltrans and urban officials from around the state seem aware of the problem.  The Times explains:

Government officials and powerful municipal organizations such as the League of California Cities have contended that access lawsuits will burden financially strapped state and local agencies that are already struggling to comply with the law. Caltrans estimates that it would cost about $2.5 billion to make improvements statewide...

...Caltrans has spent $10 million -- an amount that will be spent annually for the next several years -- to build and upgrade curb ramps as well as improve sidewalks.

I'm certainly not a math expert, but at this pace it will take Caltrans a mere 250 years to bring California into compliance with the ADA, assuming no conditions get worse over the next two and a half centuries.

While that $2.5 billion seems to be a huge amount of money, certainly thrown out by the League of California Cities to scare people away from supporting the safe streets and sidewalks that all Californians deserve, consider that LA County itself will be spending $8 billion of Measure R funds to increase highway capacity and encourage car-driving commutes over the life of the gas tax.

Locally, the City of Los Angeles has its own ADA problems.  Back in January Donald Shoup broke down the many issues that the City faces as it tries to come into compliance and the many ways its dropping the ball.

Photo: Nahh/Flickr

In the late fall of 2008 and early in 2009, the City Council and Mayor Villaraigosa decided to fill a hole in the city’s budget by raising the cost of parking curbside at city-owned parking meters. The wildly unpopular move is estimated to generate $18 million dollars for the city, but the backlash from constituents has turned several Councilman who voted for the raise into "low-cost-parking" advocates including Tom LaBonge and Dennis Zine.

To help justify their plan, they tried to push the idea that they were following a Smart Growth model based on the teachings of UCLA Economics Professor and Parking Guru Donald Shoup.  Shoup has explained how street parking is undervalued throughout America and by capturing those revenues and putting it back into the communities from which it comes cities can begin to remake themselves.

The City of Los Angeles seems to have forgotten that last part, and now is facing a political backlash because the meter hike they pushed through is being rightly viewed as increased fees with all the negative things that come with them and no benefit seen in the community. 

While increasing meter rates isn’t a bad idea by itself; the political reality is that people don’t like to pay more money without seeing something in return.  In this case, Los Angeles blew a chance to build a political alliance for increasing meter fees and politicians burned by this experience are going to be less likely to take a stand in the future.  That’s not Don Shoup’s vision.

In short, by not using the parking fees to improve transportation or reinvesting in the community, the city neglected to develop a group of people that push for meter increases because of what can be done with those dollars, so when newspapers write stories on the increases it’s not at all surprising that a reporter can’t find a person willing to explain why raising rates isn’t a bad idea.  Take today’s Daily News:

Business owners, shoppers and restaurant and
theater patrons throughout the San Fernando Valley are up in arms about
the increased parking meter rates that have been introduced over the
past year – and demanding something be done about it.

Councilman Dennis Zine agrees and has asked officials to
re-evaluate the rate hike, which was intended to raise an extra
$18 million for cash-strapped city coffers. He believes the rate
increase may have been counterproductive.

Even as activists around the city prepare to make a point that as a society we’re wasting open space in the name of cheap parking during Park(ing) Day in just 10 days, the city bungled raising meter rates so badly that it created a backlash against any future meter raises, even those that might be usable for Livable Streets means.

For the politicians looking to close a loophole in the city’s budget through privatizing street parking, the biggest question is going to be “how much money can the city get” for leasing enforcement and collection of paid street parking.

Reporting from this week’s City Council hearing, Joe Linton writes, “The city is facing a $35M deficit in the current fiscal year.  The deficit projected for next fiscal year was projected at $433M (out of a $7B budget), but that forecast is being revised to about $530M.”  If Chicago got $1.16 billion for leasing control of its 36,000 meters, Los Angeles should be able to get at least that much for it’s 43,000 metered spaces, right?

Not necessarily.  First, given the backlash that the city experienced for just raising the hourly rate for many meters, can we really expect the Council to either let the investor decide the new rates or agree to a series of rate increases that would place L.A.’s parking rates at the top of the country’s?

Even if the City Council does move forward with a plan that would drastically raise the cost of street parking, UCLA Traffic Professor Donald Shoup raises another question about how much money the city can really expect to get in a privatization deal because of a state law that requires.  In an e-mail, the parking guru writes:

I suspect that LA will have a hard time finding bidders for a parking meter concession because so many drivers with disabled placards now park free at meters.  Section 22511.5 of the California Vehicle Code states, “A disabled person or disabled veteran is allowed to park in any metered parking space without being required to pay parking meter fees.” If disabled placard (DP) holders can park free for an unlimited time at meters, I suspect that few investors will want to bid for the meter revenues.  In a casual walking-around survey in downtown, it looked like about half of all the metered spaces were occupied by cars with disabled placards. 

If a concessionaire tries to increase the meter rates, the results will probably be disappointing. Increasing the meter rates will increase the incentive to abuse placards and will also reduce the willingness of those without placards to pay for parking at the curb. The result may be that DP parkers (many of them fraudulent) will use all the curb spaces, and almost no one will pay for parking. The increased incentive to abuse placards may even reduce curb parking availability for genuinely disabled drivers. Bad placards will drive out genuine placards.

It will be interesting to see how much investors will bid for a Los Angeles parking meter concession.  The first thing investors ought to ask is what is the current parking meter revenue as a percentage of potential revenue if the all the metered spaces were occupied and the drivers paid the meters.  I suspect that the ratio of current revenue/potential revenue is probably quite low.

Just to place this discussion into perspective, assuming the city doesn’t reduce the FY 2011 deficit of $530 million, if the we very well could be looking at not even getting three years of a balanced budget off of a sale, and in fact could very well not even make it until July of 2011.