Donald Shoup on “The High Cost of Free Parking”

One more from the outstanding organization, Strong Towns (StrongTowns.org) — an insightful interview with an original thinker.

Chuck Marohn (CM): Hey everybody, this is Chuck Marohn. [My guest] is a professor of Urban Planning at UCLA, the author of the book The High Cost of Free Parking. I’ve got on the podcast today special guest Donald Shoup. Professor Shoup, welcome to the podcast.
 
Professor Donald Shoup (DS): Well, thanks for the invitation.
 
CM: I’d like to ask you to give us some of the ways that free parking has a high cost.
 
DS:  Well, everybody wants to park free, including me and probably you.

But the problem is that when we park free the cost doesn’t go away, you know. The cost is still there, of a parking structure or a parking lot, and if the driver doesn’t pay for it, somebody else pays for it. That somebody ends up being everybody, even people who are too poor to own a car.
 
So, I’m not against free parking.

What I do criticize are parking subsidies. A parking subsidy is a fossil fuel subsidy. It’s a subsidy for people who use gasoline to get to the parking space. And even the parking spaces are, if they’re made out of asphalt, they’re made out of fossil fuels.
 
I don’t tell people that I oppose free parking, but I certainly do think that parking subsidies have a high cost. The one person who did try to estimate the difference between the cost of just off-street parking and what the drivers pay found that the subsidy for off-street parking is between 1 and 4 percent of the gross national income. So that’s about what we pay for Medicare. So I think that it’s a huge amount of money that we spend for the parking subsidies that probably go to the wrong people.

And the further problem is that, if parking is subsidized more people will drive rather than walk or bike or ride public transit or carpool. So it’s not just that there’s a lot of money spent on it, but that it causes us to travel in the wrong way or even too much. So I think the world would be a lot better off if you paid for your parking and I paid for mine.
 
CM: Why is it so important to get the price right? You know, you advocate for metering parking and charging for parking, why is that such an important response to get the amount of parking right?
 
DS:  Surveys show that 99 percent of all automobile trips end up at a free parking space. It doesn’t seem like that to most of us, especially if you work at a university where people pay for parking or in some parts of downtowns. But throughout the United States, most people expect to park free at the end of a trip. And that means that we’re trying to manage the transportation without the use of prices.
 
We’re trying to manage the whole parking supply without using prices. And there’s no other part of the economy that we do that with. You couldn’t imagine managing the gasoline supply without charging for gasoline, or the food supply or the housing supplier, or anything else.
 
We have expensive housing for people and free parking for cars. So I think we have our priorities the wrong way around.

And the right way around would be to allow the price system to show drivers how much parking spaces cost. That is, if they park at a very expensive underground garage, the parking would be expensive. If they’re out in a suburb and they park on the street where there’s nobody else parked there, the parking would be free.
 
So I think we would allow prices to influence both the supply and the demand for parking. Because the parking is free, we’ve had to mismanage a lot of the rest of our society. To prevent parking shortages, all new buildings have to come well supplied with parking. The parking requirements are everywhere for everything. You know, you can’t build a restaurant without ten parking spaces per thousand square feet for example, which means that the parking lot is seven times the size of the restaurant.
 
It isn’t just that the parking’s free is the problem, it’s what we have to do in response to all that free parking to make the system work at all. Because if we had free parking without off-street parking requirements, then all the street parking would be congested and, of course, as you know, most, curb parking is free. In Manhattan most of the curb parking is free!

Prices are really essential for managing an economy, except, you know, in the Soviet Union, they tried to do without them. We saw how that worked out.
 
CM: Yeah, that didn’t work out well. Right. What happens to a city?  What have you seen happen when a city gets rid of their parking minimums and starts to put a real price on parking?  What are some of the transformations that take place?
 
DS:  Well, there haven’t been many American cities that have done this. A few have done it in their downtowns. If they eliminate off-street parking requirements, or even put a cap on the amount of parking, say that they limit the amount of parking that a new building can have, and places like New York and Chicago and San Francisco have parking caps rather than minimum parking requirements in their downtowns. And places like LA and Houston and, and Phoenix and Detroit have minimum parking requirements. And I think we can see pretty easily where would you want to visit. What city would you like to be a tourist in in the downtown?
 
CM: Right.
 
DS: Say for a conference hall or a concert hall, either one, in downtown, we can look at the difference between San Francisco and LA. LA has minimum parking requirements, and San Francisco has parking caps. And LA requires, for a concert hall, 50 times more parking than San Francisco allows as the maximum. So somebody’s got to be wrong, and I think if you look at downtown LA or downtown San Francisco you’d say that LA has got it wrong.
 
CM: Right.
 
DS: So if your question was, well, what happens when cities change their policies, I think that more cities are beginning to think that these minimum parking requirements do a lot of harm.
 
They raise the cost of housing because the housing has to come with parking. They distort urban design. The building has to be built with a lot of parking inside them, you know, on a podium or in the parking lot. They help pollute the air because of all the cars coming to the parking spaces. They congest traffic. They increase fuel consumption. And now we have to worry about the increased carbon emissions because of the amount of carbon that comes out of the cars on their way to these parking spaces.
 
So I’ve made these arguments in my book, The High Cost of Free Parking, and in other places. I’m an urban planner and I write, I go to planning conferences and I’ve made these accusations, let’s put it that way, roundly condemned the way the cities are planned now, and I have never heard an urban planner say that “No, minimum parking requirements do not increase the cost of housing. They do not increase the cost of everything else. They do not increase traffic congestion. They do not increase air pollution. They do not increase carbon emissions.”
 
It’s just silence. You know, I’m happy to debate anybody who wants to defend the way we do it in most of our planning for parking in the United States.

But I think younger people are coming around to agree with me. You know, the planning students.

They understand that, in their planning education, the professors never have any instruction on how to set up parking requirements for a nail salon or a food store or an animal grooming studio or anything else. Any of the hundreds of uses for which we have been bombarding requirements, they have no instructions on how to do that because the professors don’t know anything about it.
 
All they learn as planning students is that minimum parking requirements get in the way of everything they want to do, like have affordable housing or transit oriented developments or something like that.

So I think as these younger people come into positions, influence, maybe they’ll say well, look what London did. They’ll say — getting back to your question — what happens if we switch from minimums to maximums.

London, like some other cities, converted from parking minimums to parking maximums, and the parking maximums were lower than the previous minimums. But when the people looked at the results, they found that very few people ever built up to the maximum, but previously, almost everybody built to the minimum.
 
CM: Right.
 
DS: And now when they had a new maximum and no minimums, the average parking supply in the new development, was half of the previous minimum. They didn’t build up to the new maximum, but they built about half of the previous minimum, implying that the previous minimum was doubling the amount of parking.
 
CM: Right.
 
DS: So I’m not against parking. I think that developments obviously should provide some parking for people who are willing to pay for it. But I think, because we all want to park free, we’ve engineered a world, or planned a world, where almost everybody can park free.

Most housing comes with parking bundled into the rent or into the purchase price. It seems free, you can park, it seems like free, and you have to have the parking, and wherever you go, they have to have parking.

So I think we have sort of a nirvana, a fool’s paradise, where everybody parks free at everybody else’s expense. You know, I think that’s the mistake we’ve made. It is a fool’s paradise. Everybody parks free at everybody else’s expense, and we think it’s a good idea and we ought to plan our cities for that purpose.
 
CM: I do see, sometimes, politicians who hear your message and say, yeah, this is what we should do and we should do this because we also have these big budget shortfalls and wouldn’t this be a great way to raise revenue? There are some pitfalls there in, in terms of making this politically acceptable. Can you talk a little bit about that?
 
DS: How do you mean raise revenue?
 
CM: Okay, I, I’ll give you a concrete example. Here in St. Paul, I’m from Minnesota, and in St. Paul right now, they’ve got some budget shortfalls. And one of the ways they’re looking to solve the budget shortfall is, we’re gonna increase the cost of parking and hey, we should do this anyway because Professor Shoup said we should, and it makes a lotta sense, But I’ve heard you say there are some problems with doing that. There are some problems within using this as a budget-fixing tool, right?
 
DS: Yes, well St. Paul only got half of the message. And I think you should, every city should charge the right price for curb parking. Who could object to charging the right price? And by right price I mean the lowest price the city can charge and still leave one or two open spaces on every block, on both sides of the block. So wherever you go, you can see just what you want: an open space waiting for you. So nobody can say there’s a shortage of parking.
 
And in the cities that have done this, like LA and San Francisco and their downtowns, more prices went down than up, because you have to charge a different price at different times of the day. If you have the same price all day long, it’s often too high in the morning and too low in the afternoon. So when they began setting prices by, not by a political judgment, but by looking at the data, it turned out that more prices went down because most parking was overpriced in the morning, so coffee shops or restaurants were losing business, or any store that was open in the morning was losing business. Now, St. Paul wanted to put in parking meters partly because there’s a parking shortage along, is it Grand Avenue?
 
CM: Yeah, Grand Avenue, yep.
 
DS: I think they made a big mistake by saying we’re doing it because the city needs the money. They actually counted the money in the next year’s budget. So clearly they were taking money out of the neighborhood and spending it everyplace else. I don’t think that’s fair.
 
What has been politically successful is, if you went to Grand Avenue and said that “We’ll offer you these parking meters, but all of the meter revenue will go to pay to repair your sidewalks, or plow snow, or plant street trees, or install street lights and street furniture, or have added police protection, or whatever is your No. 1 priority, something you would like to see done on Grand Avenue but you don’t have the money for. Here’s a way to pay for it.
 
If you have the meters, you’ll get all the improvements you want. If you don’t have the meters, you won’t get the improvements you want. And we’ll run the meters just as long as it’s necessary to manage parking. Say, if the demand falls at 7 p.m., then the price either goes down or becomes free at 7 p.m. And if the demand doesn’t increase until 10 a.m., the price remains free until 10 a.m.
 
So I think if they combine it as a package, a package of prices and public services, the merchants and the property owners would begin to see it in a different way, and it’s totally different from saying we’re gonna give you parking meters but we’re gonna take all the money.
 
So I think it’s pretty elementary that the city made a mistake saying that we want the money and therefore we’re going to put in parking meters. Of course that’s gonna be unpopular. But in cities that do offer meters and public services as a package, they’re very welcome.
 
There was one city in California I visited – you know, I have a second life going around and talking about parking in cities [telling them] what I think they oughta do – and this was Ventura, California, and I said if you put in the meters it would pay for whatever this neighborhood wants. They were going to pay for street sweeping and additional street furniture. And afterwards, I stayed for a few days, and went to a number of restaurants. And every time I went into a restaurant, somebody – the manager or headwaiter – who had been to my talk came up to me and said “Oh, I love your ideas Professor Shoup,” and I said “Well, what do you like about it, was it [that] it would reduce traffic congestion, or air pollution.” They would look at me as though I was the dumbest person on earth. And they said no, we want the money.
 
CM: Right.
 
DS: See, if you hadn’t offered them the money, they wouldn’t have wanted the meters. But an interesting side effect that I think is probably is occurring elsewhere is that, when they put the meters in, they had to have enforcement officers so they got police interns. They call them police cadets. You know, people who would want to be police officers but they can’t get in, But now they get interns, they hire them to enforce meters be ambassadors for the area to show people how to use the meters and guide people around. And they were costumed as police officers because they really were sort of like police officers. And the crime rate fell by half, just because there were uniformed officers walking on the street to manage the meters.
 
And the further thing that they did was that they used the wifi to connect the meters to City Hall to validate credit cards so they adjust prices up or down remotely. You don’t have to touch the meter to change the prices of the [meters]; prices are different at different times of day. And they realized that there’s not that much use of the wifi. So they opened up the wifi to everybody in the metered area. And now, the restaurants and the coffee shops all abandoned their contracts with AT&T or Verizon to provide wifi in their coffee shops. And whenever anybody opens a laptop, they get wifi free. Free wifi, courtesy of the parking service.
 
CM: Wow.
 
DS: So if, around the world, everybody begins to identify parking meters with free wifi, they’ll say “I see what you mean” and the people who don’t own cars will benefits and all the merchants will benefit, and the customers will benefit and it really doesn’t cost anything extra. You just have to increase the size of the router on the light poles connected to the power grid. Increase the size of the router and I think it will lead to a change in the way we think about parking, if we identify it with free wifi.
 
CM: Is there any difference between – I mean, I know there’s a big difference between a Manhattan and a small town – but in terms of your insights on parking and the cost of parking, is there a different kind of approach you would take in a smaller midsize city than you would in a large city?
 
DS: Every city thinks it’s unique.
 
I’m sure St. Paul thinks it’s unique and different from Minneapolis and different from Osceola or any other little town nearby.
 
I think most cities are very much alike when it comes to parking. If you have a parking problem and there’s a shortage of parking on Main Street in a small city, that’s the same as the parking shortage on Grand Avenue in St. Paul and you could do the same solution.
 
It just means there won’t be nearly so many parking meters in the small city, and they won’t charge as high a price. But you have to manage parking. And I think that when you go to older cities – the one I was telling you about in California, Ventura, California, had a beautiful old 19th Century street, but it was in tough shape. It needed a lot of public spending to improve it, and I think the meters can help there. And they didn’t have any meters so everybody complained about a parking shortage.
 
There was a lot of traffic on the streets, and as soon as they put in the parking meters and set the price, you know, so that there, there were one or two open spaces, almost all of the traffic congestion disappeared because most of those cars were hunting for a free parking space. So I think a small town can benefit as well. It’s just that there won’t be as many spaces that have a charge. It will solve the problem in a big city or a small city. Some of the biggest cities like – Amsterdam does a great job or London does a great job, they have to charge a high price to create some vacancies, but they do it. They can do a lot of good with the money they receive.
 
CM: I’ve got one last question for you and I appreciate you taking the time. It seems like, for a while, you, you had to have felt like a voice in the wilderness. And now, it really feels like there’s a lot of momentum around these ideas and that your insights are showing up in more and more places, they’re becoming more and more mainstream. Give us a little bit of your perspective on the genesis of these ideas and where you think we’re at today and where you think we’re going to be in a short period of time.
 
DS: Well, I think economists recommended the right price for curb parking for a very long time. But it hasn’t gotten much traction because nobody wants to pay for parking. I think one of the key items in making this idea popular and discussable, and I think successful, is to use the meter money to pay for services on the metered blocks.
 
What St. Paul didn’t offer to do. So I think some cities are getting just half of the message, that we ought to get the price right, and they don’t get the other half of the message. To make it politically popular and really useful, you have to spend the money in a very flamboyant way on the metered street. Very ostentatious. You put signs on the parking meters saying “Your meter money makes a difference in Pasadena” or “Turning small change into big change” and then showing it’s for street cleaning and sidewalk repair and tree planting, so that everybody knows that they can see their meter money at work and so they can see the meters are working for them rather than against them.
 
So I think as soon as that idea becomes just as popular as idea of charging the right price, I think these ideas will spread faster. And it’s contrary to what most cities have done in the past. But because most meter money disappears under the general fund, that’s why we have so few parking meters. That [is why] most parking is free, most curb parking is free in most cities.
 
And I think that if we learn how to recycle the parking revenue to improve the neighborhood, that is, [spend it] where the charges are, that — I — well, I’ll go overboard here –
 
I think if we get the price of curb parking right, if we spend the money to pay for public services on the metered blocks, and if we remove these awful off-street parking requirements, I think many cities will enter into a golden age because there’s so much money.
 
The land is so valuable that it’s worth so much and that value could go to improve our cities so much, and the minimum parking requirements do so much damage, if we could get all three things right: getting the price right, the distribution of the revenue right, and get rid of minimum parking requirements, I think we’d see — and all over the world, let’s put it that way – I’m kind of ambitious, you know. I’ve, uh, spoken all over the world. And in many countries, let’s say, like China, they’re more receptive than they are here, because fewer people own cars, and it’s quite obvious that only the car drivers will be paying. And the car drivers are richer, so it’s not fair, it’s obviously unfair to have free parking when only a few rich people own cars. But if this gets around, I think that these ideas will be successful all over the world.
 
CM: In China they’re better capitalists than we are sometimes.
 
DS: But this isn’t capitalism. This is a market. I think that the government sets the prices, the government owns the parking spaces and, and the government spends the revenue. So it’s more like socialism than capitalism. It’s like successful socialism.
 
CM: Market-based socialism.
 
DS: There’s, there’s an enormous amount amount of very valuable land that the cities own and it’s squandering the results.
 
It’s really mismanaging and I think the example that you showed in St. Paul is an example of this mismanagement. The transportation experts say that parking meters would prevent employees from parking all day long in front of their restaurants and complaining about that there’s no parking for customers, and it would provide a lot of revenue for things that the neighborhood wants, even to build an off-street parking structure if that’s their first priority. But it rarely is, because parking is so expensive. They’d rather have clean sidewalks than a new parking structure. And so I think that once they get the parking right, that cities will right themselves.