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The High Cost of Free Parking


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Great topic considering the off street parking meetings being held this month. Link

Sanitary sewer and off street parking are the two biggest factors that determine building forms in my work experience in Houston. I first heard of The High Cost of Free Parking from the director of community development in Bellaire a year or so ago. I was suggesting a Chicago style privatization of curbside parking in lieu of having to build a glorified parking garage for such a small commercial building atop and in our discussion the director referred my idea to this book. The author clearly is pro market-priced curbside parking, something I was assured would never gain immediate political support in Bellaire. I'm on lunch so I'll try to come back to this thread at a later date.

Oh and another good read on the subject and mentioned in High Cost is Travel By Design: The Influence of Urban Form on Travel

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  • 3 weeks later...

Perhaps you are referring to this article from the first issue (Aug 1982) of Cite?


gnu, thank you very much for finding that article - couldn't for the life of me remember the source (and considering that it's been 27+ years since I read it, little wonder!)

To be clear, I've never argued that parking revenues were behind the wholesale destruction of neighborhoods like Midtown.

Then please forgive me for having misunderstood every single one of your posts. It sure seemed like that was your whole point.

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  • 3 months later...


The "direct" test is hardly definitive. So the authors also ran an indirect test. They used fancy econometric techniques to estimate the marginal value of a parking spot for commercial properties in the suburban parts of Los Angeles County. In other words, they determined how much value the "last" parking spot adds to the sales price In a competitive market, developers should add parking until the value of that last spot equals the cost of building it. Developers who build parking at a loss are either very stupid or -- more likely -- doing it only because the city makes them do it.

It turns out that 88% of commercial properties in suburban Los Angeles have parking spots that cost more to build than they're worth. The percentages vary wildly by type of property, though. "Only" 80% of industrial properties have more parking than one would expect. But 99% of restaurants and gas stations -- 99% -- and 91% of shopping centers have more parking than they'd voluntarily build.

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But Donald Shoup makes another important point in The High Cost of Free Parking. Merely looking at current costs and prices understates the full impact of minimum parking requirements. MPRs have legacy costs. One legacy is that decades of free parking have artificially driven up the demand for driving and artificially depressed the demand for dense, walkable development. Parking lots increase the distance between businesses, which makes walking less practical, which in turn makes driving more attractive. Thus, the marginal value today of a parking spot is much higher than it would have been without decades of MPRs.
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Speaking from the vantage-point of someone that has been a developer's analyst...the findings are intuitive. A developer will never intentionally under-park a project; it strongly correlates to a higher cap rate, and is good enough reason to pass on a property being offered for sale.

Still, it isn't particularly helpful to know what percentage of properties are over-parked. That stat will seem to exaggerate the problem (i.e. lies, damned lies, and statistics). It'd be much more helpful to know the percentage of excess spaces.

Edited by TheNiche
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