The need to “unbundle” parking

In typical fashion, I am reading about 14 different books at the moment – one of which is the excellent “The High Cost of Free Parking” by Donald Shoup. In some respects, this is one of the most important planning/transport books that has been written in many many years in my opinion – because it looks at an issue that has a huge impact on the structure of our cities and on the way transportation functions, but for some reason has been almost completely ignored by both land-use planners and by transportation analysts. Of course, that issue is parking.

One of the fundamental arguments in transportation circles is about subsidies. Public transport gets subsidised in an obvious way (to the tune of about 55% of its operating costs in Auckland), whereas (the argument goes) roads pay for themselves. Of course roads do not actually pay for themselves: with the most obvious element of this being that local roads are generally 50% paid for by councils. But in general the simplistic argument is: roads pay for themselves to a very significant extent, it is obvious people really do want to drive because that’s what they’re doing, and that because people are obviously willing to pay for the privilege of driving, we should continue to provide more roads. Steven Joyce has run this argument on many occasions, even going so far as to say that “funding is not the big issue” for projects like the Puhoi-Wellsford “holiday highway”, presumably because in his mind, the roads are “paying for themselves” through petrol taxes, road-user charges and so forth.

The counter-argument to this “roads pay for themselves” mindset is to show that actually they don’t. There are many ways in which roads to not “pay for themselves”, such as uncosted externalities like CO2 emissions, noise and air pollution, impacts on land values of areas around big, noisy roads and – my particular focus for this blog post – the uncosted impact of parking. Here’s what Shoup says about the effect of having parking generally provided for free, with its “cost” being absorbed by non-drivers:

Each person plays many different roles in life – tenant, homeowner, worker, consumer, investor, and motorist. We pay for parking in all these roles except, usually, as motorists. Because we pay for parking indirectly, its cost does not deter us from driving. Off-street parking requirements “externalise” the cost of parking by shifting it to everyone but the parker. Only when we pay for parking directly does its cost affect our decisions on whether to drive for particular trips.

To make this point clear, consider what would happen if cities required landlords to include the cost of electricity in the rent for housing. Although tenants would pay for electricity indirectly, it would appear free to them. They would buy and use refrigerators, air conditioners, and other appliances without thinking about the cost of electricity. Faulty regulation by the city – rather than the bad behaviour by landlord or tenants – would cause this profligate waste.

Suppose also that a shortage of electricity suddenly developed – with rolling blackouts and economic disruption. An obvious reform would be to separate the cost of electricity from the rent for housing. This unbundling would make residents aware of the cost of electricity, which would begin to influence their decisions about buying and using electric appliances. A further reform would be to vary the price of electricity by the time of day, so that residents would shift their consumption from peak periods when demand is high  to off-peak periods when demand is low.

Cities do not, of course, require landlords to include the cost of electricity in the rent for housing. In reality, many building codes require and individual electric meter for each apartment (rather than one master meter for the whole building) to discourage waste. But cities do require an ample  supply of parking spaces for every building, and this saves everyone the trouble of thinking about parking and its cost. Parking appears free because its cost is widely dispersed in slightly higher prices for everything else. Because we buy and use cars without thinking about the cost of parking, we congest traffic, waste fuel, and pollute the air more than we would if we each paid for our own parking. Everyone parks free at everyone else’s expense, and we all enjoy our free parking, but our cars are choking our cities.

Requiring all land-uses to provide the level of parking that their use will supposedly generate means that the cost of parking is “rolled in” to what you pay for everything else. Where I live has one parking space (a ratio which would be illegal now, with all residential development generally requiring two parking spaces) and the cost of providing that space is “rolled into” my rent. Effectively, I pay for that space whether or not I was to end up using it. While that cost might not be particularly huge in the scheme of things, in the kind of intensive development that many of our land-use plans envisage, parking requirements will have a severe limiting effect on the level of development that is possible, and add a huge cost to undertaking such development.

The value of land that is dedicated to parking is quite staggering actually, and of course while a shopping centre (for example) is always going to want to provide some parking to encourage people to use the place, if they had the choice of using that land for a more economically productive purpose and using the money saved to somehow get more people to their mall via public transport, walking and cycling it would be interesting to see the results. As an example of what I’m talking about, here’s a site in Manukau City that is almost exclusively used for parking: even though its value is in the tens of millions of dollars: Similarly in Albany, we see that the majority of the Westfield mall’s site is simply paved in asphalt – even though it is hugely valuable: Beyond the simple “land cost” in these two examples, we should also think about the effect that providing all that parking has on the ability of Albany and Manukau City to become the regional centres that they are supposed to be. When half your land is paved in asphalt to simply park vehicles, the chances of actually achieving your desired land-use outcomes become pretty remote. Furthermore, all this parking encourages people to drive to these locations: meaning that we have to build huge roads to cater for them all – once again ruining our urban environment and contributing to our auto-dependency.

A reasonable response to my take on the above examples would be “but Westfield seem to want all this parking, and I would agree that Westfield (in New Zealand at least) seem quite insatiable in their desire to provide their shopping malls with as much parking as possible. But have they really paid for the effects of providing such a vastly huge amount of parking? What was their contribution to the huge four-lane wide roads that wind their way around Albany making the place as truly horrible pedestrian experience? What was their contribution to the widening (or future widening) of the Northern Motorway to handle all these vehicles that flock to their mall on the weekend? It is this issue, that allowing developers to provide heaps of parking is what truly generates traffic flows and inevitably congestion, that has quite an interesting effect on how we should look at parking policy.

Ultimately, I think that having “minimum parking requirements” in our land-use planning rules is completely stupid and counter-productive: perhaps being the single most significant element in creating the auto-centric soulless urban environments that we supposedly want to avoid. The planning rationale for doing away with minimum parking requirements is obvious, that they contribute to exactly the kind of city we don’t want. The economic rationale for doing away with minimum parking requirements is also obvious: that we are forcing a huge cost onto developers who (in some cases) would rather spend that money and land-space on something more productive. Taking away arbitrary regulations that destroy economic wealth should be a huge priority for a government that wants to ensure each mode pays its way as much as possible – don’t you think?

The trickier issue is related to the extent to which we should actively limit the supply of parking – because of its effects in creating traffic congestion. Either way, it’s clear to me that if we’re going to moan about the subsidies public transport receives, it’s hypocritical to not accept the huge subsidies that cars receive as the result of the cost of parking not being unbundled. It’s not like bus and train companies can park their vehicles for free overnight, and they take up vastly less urban space than cars do.

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