America Has a Lot of Parking Spaces. It’s a Problem.
(Bloomberg Opinion) -- Just over 76 percent of U.S. workers usually drove alone to their place of employment in 2016, according to the Census Bureau— a percentage that has changed little over the past decade. Those 115 million drivers all needed somewhere to put their cars, sport utility vehicles and pickups while they were on the job. They also needed somewhere to put those cars when they got home, and probably when they went to the grocery store or out to dinner.
They were able to do this because American cities and towns tend to have lots more parking spaces than cars. Thanks to a new inventory of parking spaces that data scientist Eric Scharnhorst of the parking analytics and consulting startup Parkingmill conducted on behalf of the Mortgage Bankers Association’s Research Institute for Housing America, we now know how many more, at least in the five cities that Scharnhorst has studied so far. The chart below shows parking spaces per household in each city; there are about 1.9 cars and light trucks per household nationwide.
The curious presence of Jackson, Wyoming — population 10,532 — on this list of otherwise much-bigger communities is due in part to the fact that Scharnhorst lives there. As a resort town, Jackson needs more parking spaces per household than most places, but with 68 percent of the spaces in its residential core empty during peak tourist season in 2017, according to a study commissioned by the town, it does seem to have too many. Jackson also suffers from the big-city scourge of high housing costs, and Scharnhorst figures they’re being driven higher by the fact that so much of the town’s acreage is devoted to parking. That’s the key message of the report: By setting aside so much space for cars, cities are curtailing the construction of new housing and making it less affordable.
Even in New York City, which is unique in the U.S. for its high share of car-free households (54.4 percent in 2016),there are rules that require a minimum number of off-street parking spaces with new commercial and residential developments outside of Manhattan, and on-street parking is mostly free.
Minimum off-street parking requirements and on-street parking priced well below what the market could bear are of course common in other U.S. cities as well. The distortions brought on by all this parking subsidization have become the subject of a growing literature in recent years, starting with University of California at Los Angeles economist and urban planning professor Donald Shoup’s “The High Cost of Free Parking,” first published as a journal article in 1997 and then as a book in 2005. Here’s a snippet of Shoupian wisdom from 2010:
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.
In cities like Des Moines, where land is relatively cheap and parking bounteously abundant (“Visitors to Des Moines commonly remark about the enormous scale of our parking structures,” city planners reported a decade ago), reducing minimum parking requirements would likely bring more efficient land use but not huge changes in how people get around. Developers would surely continue to build off-street parking, for example, just not necessarily in the same quantities and places as now required by city ordinance. This is true in most of the country, I would imagine, especially in the suburban areas where the majority of Americans reside. In crowded coastal cities, though, treating parking in an economically rational way probably means markedly fewer parking places (definitely fewer free ones), and even changes in lifestyle.
Scharnhorst provides a helpful way to think about this difference by calculating the replacement cost of existing parking spaces based on land values and construction costs. Here’s the per-stall cost for each of the five cities he studied:
Seattle’s per-stall cost is so high in part because such a big share of its existing parking spaces (32.7 percent) are in expensive-to-build parking structures, which makes comparisons with other cities a little misleading. It’s definitely fair, though, to say that parking spaces are worth a lot more in Seattle than in Des Moines. As already noted, commuting to work alone generally requires two parking spaces. In Des Moines, those two spaces are worth $7,958; in Seattle, $44,842. People also make more money in Seattle than Des Moines, with the 2016 median household income $83,476 in the former and $49,203 in the latter, but the disparity in parking-space value is far greater.
What’s been happening in Seattle is that a city that was for the most part built around driving is becoming so expensive and crowded (the city’s population rose 31 percent from 2005 to 2016) that something has to give. And sure enough, commuting patterns in Seattle have been changing, although driving remains by far the most common way to get to work there:
Other major West Coast cities and metropolitan areas find themselves in similar predicaments. They are for the most part products of the automobile age, but they have grown so crowded that having everybody drive everywhere for everything is no longer really working. Even older cities on the East Coast, such as New York and Philadelphia, have encountered new traffic and parking pressures as population has shifted back toward the urban core.
Investments in public transportation and innovations ranging from ride-hailing services to self-driving cars to electric scooters can all reduce these cities’ dependence on cars that need to be parked somewhere. But in the end, asking car owners to bear the full costs they impose does seem like an essential part of the solution. Trying to get rid of auto subsidies can generate a lot of opposition, though. Even in New York City, where most people don’t own cars, it has so far proved politically impossible to charge for most street parking or impose a congestion fee on vehicles entering the most crowded parts of the city (this is partly because such changes have to be approved by the state Legislature, but a lot of the opposition to congestion pricing has come from lawmakers who represent New York City).
Finally, while there’s been much talk in recent years (some of it by me) about whether Americans are beginning to sour on cars or not, Scharnhorst’s parking-cost estimates are an indication that this is likely to be more of a city-by-city question. Des Moines residents probably won’t be reducing their car use anytime soon. Seattle residents may have no choice.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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