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Minimum Parking Mandates Are Inefficient

Samuel Staley
August 24, 2010, 10:02am

A new study of Los Angeles by German economists, unpublishd so far in an academic journal, finds that minimum parking mandates require more off-street parking than the market would organically generate. Thus, we pave over a lot more land than we need to in order to satisfy bureaucratic adherence to rules that are not likely grounded in a real examination of supply and demand. This, of course, is the point UCLA planner Don Shoup has been making for years, including his influential book The High Cost of Free Parking. We've also spotlighted this policy reform in The Road More Traveled: Why the Congestion Crisis Matters More Than You Think and What We Can Do About It.

I was alerted to the study by the folks over at MarketUrbanism.com, who picked up the reference from Tyler Cowan's blog post at the Marginal Revolution.

Here is the abstract and reference info:

Do Parking Requirements Significantly Increase The Area Dedicated To Parking? A Test Of The Effect Of Parking Requirements Values In Los Angeles County

Franco, Sofia, Cutter, Bowman and DeWoody, Autumn (2010): Do Parking Requirements Significantly Increase The Area Dedicated To Parking? A Test Of The Effect Of Parking Requirements Values In Los Angeles County. Unpublished.

Abstract

Minimum parking requirements are the norm for urban and suburban development in the United States (Davidson and Dolnick (2002)). The justification for parking space requirements is that overflow parking will occupy nearby street or off-street parking. Shoup (1999) and Willson (1995) provides cases where there is reason to believe that parking space requirements have forced parcel developers to place more parking than they would in the absence of parking requirements. If the effect of parking minimums is to significantly increase the land area devoted to parking, then the increase in impervious surfaces would likely cause water quality degradation, increased flooding, and decreased groundwater recharge. However, to our knowledge the existing literature does not test the effect of parking minimums on the amount of lot space devoted to parking beyond a few case studies. This paper tests the hypothesis that parking space requirements cause an oversupply of parking by examining the implicit marginal value of land allocated to parking spaces. This is an indirect test of the effects of parking requirements that is similar to Glaeser and Gyourko (2003). A simple theoretical model shows that the marginal value of additional parking to the sale price should be equal to the cost of land plus the cost of parking construction. We estimate the marginal values of parking and lot area with spatial methods using a large data set from the Los Angeles area non-residential property sales and find that for most of the property types the marginal value of parking is significantly below that of the parcel area. This evidence supports the contention that minimum parking requirements significantly increase the amount of parcel area devoted to parking.


Samuel Staley is Research Fellow


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