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The High Cost of Free Parking
By Donald Shoup
Summarized by
Tri-State Transportation Campaign
350 W 31st Street, New York, NY 10001
p: (212) 268-7474 f: (212) 268-7333
www.tstc.org
The matter of parking is largely taken for granted, until you’re circling the block looking for that
elusive space. Even for many transportation professionals and urban planners, parking tends to
be little more than an afterthought. But a major new treatise by UCLA professor Donald Shoup
makes a strong case for more attention to parking. Shoup determines that in the United States,
off-street parking consumes an area roughly the size of Connecticut. If global car ownership
rates catch up with those in the U.S., and assuming just one off-street space per car, an area the
size of England would need to be paved to house the world’s car fleet (during the 95 percent of
the day when it’s not on the road).
Shoup contends that many of the woes associated with America’s car culture can be linked
directly to the lack of rational attention to parking. More specifically, he argues that the
oversupply of free parking (he estimates 99 percent of parking in the U.S. is free) is an
enormous public subsidy that makes driving less expensive than it should be, further skewing
travel choices. In fact, transportation suffers from the same “tragedy of the commons” relative to
parking observed with regard to fisheries and other free and un-owned resources. Zoning
requirements for overly-abundant off-street parking and failure to charge appropriately for curb
parking result in extra air pollution, higher oil consumption, traffic congestion, and sprawl.
Less obviously, parking requirements increase the cost of housing, as well as goods and
services. For urban areas, Shoup summarizes these effects quoting Mumford: “The right to have
access to every building in the city by private motorcar in an age when everyone possesses such
a vehicle, is actually the right to destroy the city.”
For those who don’t have the time to read The High Cost of Free Parking’s hefty 700 pages, we
have summarized Shoup’s major findings into three sections following the outline of his book:
zoning codes’ influence on the proliferation of free parking, the cruising-for-parking
phenomenon, and Shoup’s policy recommendations.
The Problem With Zoning
According to the American Planning Association, cities set parking requirements for at least 662
different land uses – everything from “adult entertainment” establishments to nunneries (e.g. 1
space per patron, plus 1 space per employee on the largest working shift for adult entertainment
and 1 space per 10 nuns for the nunnery). Shoup says the requirements are often simply pulled
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out of thin air. There are two primary sources for these requirements: the parking requirements
of neighboring communities and the Institute of Transportation Engineers’ (ITE) Parking
Generation manual. Both sources are problematic, but the second is all the more troubling in its
faults because it purports to be scientific.
Parking Generation recommends the exact number of parking spaces needed per square foot for
dozens of different land uses, and supports those figures with scatter plots and studies. But
Shoup shows that the recommendations are in fact derived from far too few studies to be
reliable. Half of the parking generation rates are based on four or fewer studies and 22 percent
are based on a single study. But even if an adequate number of studies had been analyzed, the
rates would still be skewed high because nearly all of the studies examine the demand for free
parking during times of peak demand in suburban locations with few, if any, alternatives to
driving. Shoup compares this to the demand for free pizza. The slices go a lot more quickly if
they are free than if they are sold at an appropriate price.
Shoup says “city planners sometimes mistake Pandora’s box for a toolkit.” With the best of
intentions, planners have “cured” parking shortages with a tonic that has made matters worse.
The practice of setting off-street parking requirements in city zoning codes has become fully
entrenched. Even for low-income housing projects where a majority of residents can’t afford a
private vehicle, zoning codes require vast parking lots to meet a demand that will never
materialize. Those lots not only add to the cost of a development, they also require that land
which could otherwise be used for housing (or landscaping, etc). Overall, parking requirements
increase the cost and diminish the supply of housing, and this effect is not limited just to low-
income developments. A San Francisco study found that requirements for off-street parking
increased housing prices by an average of $47,000 and increased the household income
necessary to purchase a house from $67,000 annually to $76,000.
Shoup calculates that parking requirements impose a public subsidy for drivers that came to at
least $127 billion in 2002 (total annual land, capital and operating costs of U.S. off-street
parking) and may be closer to $374 billion. For comparison, in 2002 federal Medicare spending
was $231 billion and for the military was $349 billion. Shoup calculates that the value of off-
street parking, at approximately $12,000 per vehicle, roughly equals the total capital cost of all
vehicles plus all roads in the U.S..
On a per-mile driven basis, the subsidy for parking amounts to between 5 and 14 cents. Shoup
calculates that gasoline taxes would have to be raised by $1.27 to $3.74 per gallon to offset this
subsidy, and notes that charging appropriately for parking may be as, or even more effective, not
to mention technologically simpler, than other pricing techniques aimed at reducing driving. He
cites a study of Boston finds that a $1 parking surcharge would roughly double the average
traffic speed in the central business district, the same benefit that would result from a $1
congestion fee.
Although part three of The High Cost of Free Parking is dedicated to Shoup’s recommendations,
in part one he discusses two solutions which could be implemented relatively easily in the near
term: fees in lieu of parking requirements, and offering developers the option to reduce travel
demand as an alternative to building a portion of required parking. Fees in lieu of parking
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requirements allow cities to collect funds from developers to build shared parking facilities. The
idea has significant benefits for urban design, largely because it would consolidate parking rather
than requiring each establishment to provide a separate lot. Further, because different land uses
require parking during different times of the day, a smaller amount of parking can be shared
among several establishments.
The second solution, reducing demand, offers developers a cost-effective alternative to building
more parking. Shoup suggests that employers or developers can offer “eco-passes” as a way to
encourage transit use, walking, or bicycling instead of driving. Other demand reduction options
are “cash-out parking” (a travel demand management technique which Shoup conceived of years
ago) whereby employers offer workers cash in lieu of a free parking space (the employee can
spend it to park, or pocket it if another commuting means is available) and car-sharing. Beyond
the obvious benefit of diminishing the need for parking and freeing up land for higher end uses,
this approach reduces vehicle trips, cutting air pollution, lowering oil consumption, and easing
congestion.
Cruising for Parking
Parking has been getting attention recently in New York City. First was the July city council
vote to make parking free on Sundays and Mayor Bloomberg’s subsequent veto. In August,
some city parking meters began accepting parking cards for payment. Meanwhile, the Tri-State
Campaign and some Bronx groups have expressed concern over plans to build thousands of
additional parking spaces around Yankee Stadium, a change which will encourage more fans to
drive.
In Part 2 of his book, Professor Shoup explores the trials and tribulations of cruising for free curb
parking. This is an experience car-owning New Yorkers, facing alternate-side-of-the-street rules,
not to mention visitors to the city, are very familiar with. Shoup asserts that cruising for parking
is much more than just run-of-the-mill aggravation. In fact, cruising for parking results in a
tremendous amount of excess driving and all of its concomitant ills — air pollution, crashes
and traffic congestion.
Because it is available to drivers on a “first-come, first-served” basis, free parking suffers the
problem of communal ownership. Once drivers secure a space, they have no incentive to give it
up in a timely fashion.
Based on review of 16 mostly American and European studies of cruising conducted between
1927 and 2001, Shoup concludes that cars searching for free parking contribute to over 8% of
total traffic. The relevant New York City study was conducted in 1995 by John Falcocchio, Joe
Darsin and Elena Prassas. They concluded the average time drivers took to find a curb space
between 8 and 10 a.m. was 7.3 minutes, increasing to 10.6 minutes between 11a.m. and 2 p.m.
According to their research, cruising for curb parking created about 8 percent of the total vehicle
miles traveled in west Midtown.
Shoup has developed a model to explain why a driver would choose to cruise for free curb
parking rather than pay for off-street parking (interested readers can turn to page 323 of his book
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for the equation). He says the decision to seek free parking is based on the price of off-street
parking, the amount of time a driver intends to park for, the time spent searching, the cost of gas
burned while cruising, the number of people in the car, and the value of the driver and his
passengers’ time. If the cost of off-street parking outweighs all of those other variables, the
driver will cruise for parking at the curb.
Some will likely disagree that all time-wasting, gridlock-contributing motorists indulge in such
an involved calculus, but it at least provides a baseline for how some drivers may approach
parking.
The most compelling chapter in this section examines the impacts of cruising for parking. Shoup
uses UCLA’s Westwood Village and its backwards pricing policy as his example. Westwood has
plenty of moderately priced off-street parking available, but metered curb spaces are free in the
evening when the district sees its highest traffic levels.
Shoup and his assistants conducted 160 park-and-visit tests by bicycle and found that the average
search time for parking is 3.3 minutes for all times, but is nearly 10 minutes during evening
hours. The average search time of 3.3 minutes may seem insignificant, but added up across all
of Westwood’s drivers, it amounts to 426 hours per day (a little more than 10 work weeks).
Shoup found that the average distance driven while cruising for a free parking space in
Westwood was half a mile. Added across all cruising drivers, the behavior contributes 3,600
vehicle miles traveled in the district each day. Over the year, that totals 945,000 extra miles
traveled, or two round trips to the moon, using 47,000 gallons of gasoline and producing 728
tons of CO2. The cumulative impact of cruising across all commercial districts in the U.S. is
obviously far higher.
Beyond zoning requirements that cause overbuilding of off-street parking, many areas deal with
parking shortages by setting time limits. These are ineffective because drivers routinely violate
the rules. (A Seattle survey found the average parking duration in 1-hour spots was 2.1 hours.)
Some areas have explored providing information measures to broadcast locations of available
parking.
But Shoup asserts that the most appropriate way for cities to address curbside parking shortages
is to price the spaces – he says that would result in 14 percent (about 1 in 7) of spaces being
open. Like congestion pricing schemes, rates could vary throughout the day depending on
demand (enabled by new technology like NYC’s muni-meters).
But pricing free curbside parking isn’t rocket science. Indeed, the parking meter, first introduced
in Oklahoma in 1935, is the obvious example. Shoup suggests political hurdles to introducing or
hiking prices can be overcome by shifting responsibility for setting rates from politicians to
bureaucrats, though this may seem to be a fairly ivory-tower, or at least Californian, point of
view.
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Shoup’s Parking Policy Recommendations
In the third and final section of his opus, The High Cost of Free Parking, UCLA Professor
Donald Shoup identifies ways to overcome technological and political barriers in the way of
charging market-priced rates for parking.
The first obstacle is relatively easy to address. Shoup describes several new takes on the
traditional parking meter, which was invented by a member of the Oklahoma City Chamber of
Commerce in 1935. Most American parking meters haven’t changed much in the 70 years since.
But recent years have seen significant advances.
Pay-and-display and pay-by-space meters are used in New York City, Aspen and Berkeley and
differ from traditional meters in that they control multiple spaces. They also have the benefit of
allowing cash, credit card, smart card and even cell phone payments. Personal in-vehicle meters,
also employed by Aspen and in Arlington, VA, allow parkers to pay without stepping out of their
cars. Drivers key the appropriate parking zone, insert their parking smart card, and display the
meter in the windshield. Payment is deducted until the driver returns and switches off the meter.
In several European cities, drivers pay for parking with their cell phones by calling a city parking
number and keying in license plate and parking zone (cell payment is also a popular way to pay
London’s congestion charge). An in-vehicle transponder allows control officers to determine if
the car is paying and parked legally. The EU is also exploring using Global Positioning System
satellites to pay for parking.
Beyond their convenience, the principal advantages of modern payment methods is that parking
rates can be adjusted to respond to demand. During peak parking periods, rates can be adjusted
upward to ensure a rough balance between supply and demand, reducing some trips and also
cutting back on cruising for parking.
Of course the bigger obstacle to charging for parking (evident in the recent tempest over NYC
metered Sunday parking) is politics. Resistance to increasing parking rates and putting a price
on previously free parking is strong. Shoup says it can be overcome via parking benefit
districts.
Under such a plan, the district would receive some or all of parking revenue, rather than see it
disappear into a city’s general fund coffers. The district would use the funds for transportation
and community improvements such as sidewalk cleaning, landscaping, storefront facades,
bicycle and walking paths, etc. The establishment of parking benefit districts helps make
metered parking more palatable to curbside shop owners and residents. Both groups can see a
clear link between the coins deposited in parking meters and improvements in their districts.
Two southern California cities currently employ parking benefit districts: Old Pasadena and
San Diego. Old Pasadena’s Parking Meter Zone (PMZ) brought in $1.3 million in 2001 and
helped transform a dying commercial district into a vibrant and popular destination for shoppers
and diners. The PMZ chair credits parking revenue for turning Old Pasadena around, saying,
“This might seem silly to some people, but if not for our parking meters, it’s hard to imagine that
we’d have the kind of success we’re enjoying. They’ve made a huge difference. At first it was a
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struggle to get people to agree with the meters. But when we figured out that the money would
stay here, that the money would be used to improve the amenities, it was an easy sell.”
San Diego returns 45 percent of parking meter revenues (amounting to almost $2.2 million in
2002) to three Parking Meter Districts. An Uptown District uses its funds to revitalize
commercial streets, improve the walking environment, establish focal points for transit services
and increase off-street parking. San Diego’s meters carry the mantra: “Small Change for Big
Changes.”
In residential areas, concerns about charging for curb parking can be ameliorated by giving
residents the right to park for free. In this way, only “outsiders” are paying for parking, and their
contributions go toward improving the neighborhood.
NYC recently introduced new parking meters which accept pre-paid smart cards for payment.
This makes parking more convenient. But unfortunately, peak premiums seem a distant prospect
while NYCDOT promotes cheap and easy curb parking. A new ad on its website invites
Manhattan motoring: “Driving to the Theater District? Use On-Street Parking – Only $2.00 per
hour.”
That said, Mayor Bloomberg, in announcing the new meters, noted that the new technology
could allow DOT to one day charge variable, demand-driven parking rates.
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