May 26, 2005 - From the May, 2005 issue

Free Parking, Argues UCLA Professor Don Shoup, Is Ultimately No Bargain for Cities

UCLA Professor of Urban Planning Donald Shoup has focused his research on public finance, transportation, and the land market. He has extensively studied the issue of parking as a key link between transportation and land use.In this interview with TPR, the professor talks about his latest book, The High cost of Free Parking, which documents the negative effects of free parking on city form. More information about the book is available at http://www.planning.org/bookservice/highcost.htm.

You recently published a book called The High Cost of Free Parking. Could you tell our readers the basic premise of the book?

I argue that cities have made catastrophic mistakes in their parking policies, and as a result we commit far too much land to empty parking lots. This waste of land increases the cost of housing and everything else. The flip side of the problem is that cities have an enormous land bank available for housing, once they change their parking policies. If a developer wants to use part of the parking lot in an office park or a shopping mall as a site for housing development, the city should get out of the way by removing parking requirements.

On page 14 of the book is a picture of an office park in San Jose, which goes on for miles because of all the surface parking lots. Off-street parking requirements encourage this pattern of development. If cities allow landowners to build housing on these vast parking lots, employees could walk to work, and we would have real jobs-housing balance. But cities first have to get out of the way by eliminating off-street parking requirements.

The book also discusses how parking requirements, in addition to distorting land use patterns, are inequitable. What do you mean by "inequitable"?

Well, 95 percent of all adult commuters park free at work, and this is one of the reasons why most of us drive to work. For instance, in downtown Los Angeles the county offers free parking to its employees. The federal building next door to the county charges for parking. According to a survey, 72 percent of all the county employees drove to work alone, while only 40 percent of the federal employees drove to work alone.

Free parking encourages people to drive to work alone and it is unfair to people who don't drive to work. It gives a big subsidy to people who drive, but nothing to the people who walk or bike or got dropped off or took the bus. In addition, the cost of parking doesn't go away just because the driver doesn't pay. The cost is initially paid by the developer and gets passed to the tenant and then to the consumer in the form of higher prices for goods and services. We all pay for parking as soon as we get out of our cars. This is unfair to people who don't drive. They also pay for parking through higher prices for goods. So the people who are least able to pay are forced to pay to subsidize parking for those who have a greater ability to pay.

In the book you point out that government doesn't specify the number of restaurants the city should have-that is left to the market-and therefore, shouldn't dictate the number of parking spaces that are built. How did government get in the business of either requiring free parking space or dictating the amount of parking spaces that businesses must supply?

When cars were new and only the rich owned them, there was no shortage of free parking spaces at the curb. When automobile ownership spread while curb spaces remained free, the parking problem appeared. The parking meter wasn't invented until 1935, so there was no way to charge for curb parking, and it seemed sensible to require off-street parking at all establishments. Planners believed that the private market failed to provide enough off-street parking, not that the government failed to charge for curb parking.

Did complaints from residential areas about spillover parking from commercial districts lead to off-street parking requirements?

Spillover was certainly a major impetus for parking requirements, especially because everyone wants to park free everywhere. When people say there is a shortage of parking, what they mean is that there is a shortage of free parking right in front of where they want to go. Where curb parking is free and there are too many cars looking for too few spaces, planners have a problem to solve. It seemed only sensible to require plentiful off-street parking, but planners didn't put enough forethought into what kind of city this would produce. As early as the 1930s people were complaining that Los Angeles looked like a series of parking lots with a few buildings in them.

To remedy the problems caused by free parking you recommend charging market rates for curb parking, and you tie this to parking benefit districts. Could you explain this idea?

I recommend three fundamental changes for parking in business districts. The first is to charge the right price for curb parking, by which I mean the price that will leave about 15 percent of curb spaces vacant to ensure easy access. There will always be an available parking space wherever you want to go. The right price will vary by time of day and by day of the week. If you charge a price that is too low, no spaces will be available for customers who want to park. If you charge a price that is too high, many spaces will be vacant, and stores will lose potential customers. If only a few spaces are vacant, the price is right.

The second policy is to eliminate off-street parking requirements. Let parking be a commercial decision, not a government decision. Merchants should decide how much parking they want to provide and whether they want to validate it for their customers.

Urban planners have no expertise in parking. They do not know the right number of parking spaces for any land use. They learn nothing about parking in planning schools, but they are called upon to set the parking requirements for hundreds of different land uses such as convents, barbershops, bingo parlors, and housing. Planners have to set these parking requirements with no real data or theory for how to do it. But if cities charge the right prices for curb parking spaces, they won't need to require off-street parking because vacant spaces will be available everywhere, at a price. The quantity of off-street parking should be decided in the market, which can provide as much off-street parking as developers and drivers are willing to pay for.

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My third recommendation is crucial. In order to make both of these other two policies politically feasible, cities should dedicate the parking meter revenue to pay for public services on the blocks where the meters are located. In this way, merchants and property owners would see that there is an advantage to charging market-rate prices for curb parking. The revenue could be used to fix and clean their sidewalks, put utility wires underground, clean the streets, pay for new lighting, and pay for façade improvements – whatever the neighborhood wants to spend the money on.

Most meter revenue now goes straight into the city's general fund, which is a political black hole. The meter revenue is collected, but it seems to disappear into thin air. As a result, there is no constituency for increasing meter rates to the market level, because no one can identify the benefits they will receive. If cities charge market-rate prices for curb parking, use all the revenue to improve the metered neighborhoods, and eliminate off-street parking requirements, then merchants and motorists can do the planning for parking, without having governments make decisions for them.

A lot of people might agree that a parking benefit district would be a good idea for a commercial area, but some people might be surprised to find out that you also think this could work in residential areas that have spillover from commercial areas.

Pasadena and San Diego are wonderful examples of how parking benefit districts work in commercial areas. Old Pasadena was a slum thirty years ago. It was skid row, and few people thought it would ever revive. It had wonderful buildings in terrible condition, with many vacant storefronts. There was little off-street parking, and the city wanted to put in parking meters to provide some turnover in the curb spaces, which were mainly occupied by the employees who worked there. The merchants said, "No way. We don't want parking meters here. The few customers we have will leave." But as soon as the city told the merchants and property owners that all the meter revenue would stay in Old Pasadena, they agreed to install the meters, charge a dollar an hour (which was high for Southern California) and run the meters until midnight and on Sunday. The merchants realized that this was going to be a great source of funds for repairing the sidewalks, putting in historic light fixtures, planting new trees, and cleaning up the alleys. The meter money helped make Old Pasadena the great success it is now.

Could this work in a residential area? Currently, to avoid spillover parking, homeowners can petition to form a parking permit district, where the parking is reserved for the residents. This leads to a lot of empty spaces during the daytime when the residents are at work. To take advantage of this situation, some cities (like West Hollywood and Santa Cruz, California) sell a few daytime permits to non-residents who work nearby. Non-residents pay much higher prices than the residents do. Converting a conventional parking permit district into a parking benefit district creates a market for curb parking. This market takes advantage of empty spaces, provides parking opportunities for non-residents, and finances added public services for residents

Do you think the residents of the neighborhoods near UCLA would buy into this idea?

First, the city has to offer this opportunity before the residents can consider it. If the residents knew that all the revenue would pay to repair their broken sidewalks, I think some would accept the offer. Melrose Avenue would be a great candidate for parking benefit districts. Everyone says that it is difficult to find a place to park there. If you look down at the filthy sidewalks on Melrose and compare them to the immaculate sidewalks in Old Pasadena, where the parking meter money pays for steam cleaning twice a month, you can see an opportunity. Some of the sidewalks in the residential areas off Melrose also need repair, and they have permit parking. If the city of L.A. offered to set up parking benefit districts in the neighborhoods off Melrose, so that employees working on Melrose could buy a few permits per residential block and all the money was used to repair the sidewalks, some blocks might say yes. No one is harmed if the city offers this as an option.

Part of the book talks about the shared parking surcharge, by which developers or other businesses could pay into a fund to build a shared parking structure, rather than supply parking individually. Are you offering that as a compromise strategy?

Many cities offer developers and merchants the option to pay a fee in lieu of providing the required off-street parking. Pasadena has an in-lieu program that has allowed many new restaurants and stores to open up in older buildings without having the required parking. Los Angeles won't allow most older buildings to be converted into restaurants because they don't have the required parking.

Parking requirements have two main functions. First, they say how many parking spaces new buildings must provide. Second they determine what uses the city will allow in older buildings. If an older building doesn't have all the parking spaces required for a proposed new use, the city won't allow the use. Well, how did so many restaurants open up in Pasadena without any parking? The owners pay a fee to the city for the required parking spaces that they don't provide, and the city built three public parking garages that are available to everybody. This arrangement leads to much better urban design. Instead of having to drive between every store and park in each store's private lot, you park your car once and then walk around. The in-lieu fees help to create this park-once environment.

The book focuses a lot on L.A. What has the reaction been to the book? Have you heard from any local officials? Is anyone saying, let's do this?

About forty newspaper articles have been written about the book, along with several interviews on National Public Radio. One city in the Silicon Valley is planning to charge market-rate prices for curb parking and use the money to fund public improvements to downtown as soon as they can do it. Their challenge is to draft the legislation to commit the revenue to the metered district, and to arrange for variable time-of-day pricing. Most city councils must now pass an ordinance any time the price of curb parking is changed. I think city councils ought to instruct the parking administrators to establish an 85-percent occupancy target and let them set the prices accordingly.

Cities should realize that market-priced curb parking is a potential source of public revenue, and that it can be politically popular if the revenue is dedicated to the metered neighborhoods. Market-rate prices for curb spaces will solve the parking problem, and the meter revenue will provide new public services. Some cities are able to collect more money from curb parking than from property tax. Again, Old Pasadena is a perfect example of what can happen. You just have to go there to see that it is far superior to Westwood Village or Melrose Avenue, which are two of the more attractive places in Los Angeles. More than $1million a year for added public services in Old Pasadena comes from curb parking, and this revenue has helped make it such an astonishing success.

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