Wednesday, September 1, 2010

Donald Shoup responds to the Antiplanner on 'free parking'

Wednesday, September 01, 2010

Prof Shoup has tweeted a link to a 10-page open-letter (PDF) with his detailed response to Randal O'Toole's 'Antiplanner' post entitled, Free Markets for Free Parking. Shoup's letter seeks to correct some misunderstandings and misrepresentations of his work in 'The High Cost of Free Parking'.

Plentiful parking in the suburbs. If it were purely a private, market-driven choice would there be so much? Or do minimum parking requirements have something to do with it?

I have extracted some highlights from Prof Shoup's letter below. I have chosen mostly sections that focus on the theme of minimum parking requirements. I particularly like the swimming pool comments in the third exchange.


[UPDATE: Streetsblog NYC has now posted the whole Shoup letter in a readable format (not pdf).]


O'Toole:  “Shoup’s work is biased by his residency in Los Angeles, the nation’s densest urban area. One way L.A. copes with that density is by requiring builders of offices, shopping malls, and multi-family residences to provide parking. Shoup assumes that every municipality in the country has such parking requirements, even though many do not.”
Shoup:  Even Houston, which does not have zoning, has minimum parking requirements, and they resemble the parking requirements in almost every other city in the United States. Houston requires 1.25 parking spaces for each efficiency apartment in an apartment house, for example, and 1.333 parking spaces for each one-bedroom apartment. Here is the link to the minimum parking requirements in Houston’s municipal code: http://tiny.cc/iaj35
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Since you say that many cities do not have minimum parking requirements, can you provide a list of some of these cities?


O'Toole:  “Shoup assumes that . . . without such requirements there would be less free parking. This last assumption is extremely unlikely, as entrepreneurs everywhere know that (outside of New York City) 90 percent of all urban travel is by car, and businesses that don’t offer parking are going to lose customers to ones that do.”

Shoup: Removing a minimum parking requirement means that a city will never force developers to supply more parking spaces than are profitable, but developers would be free to provide as many parking spaces as they like. If developers did always voluntarily supply at least as many parking spaces as cities now require, the minimum parking requirements would be unnecessary. The only research I have seen found that developers usually do not provide more parking spaces than cities require (pp. 78–84 of The High Cost of Free Parking). Recent econometric research also strongly suggests that minimum parking requirements force developers to provide more parking spaces than they would voluntarily provide in a free market: http://mpra.ub.uni-muenchen.de/20403/1/MPRA_paper_20403.pdf


O'Toole:  “Shoup portrays such free parking as a ‘subsidy’ because not all people drive and so the ones who don’t drive end up subsidizing the ones who do. But any business offers a variety of services to its customers and employees, and no one frets about subsidies just because they don’t take advantage of every single service. How often do you actually swim in the swimming pools or work out in the exercise rooms of the hotels you stay at?”

Shoup
: You use swimming pools and exercise rooms as examples of bundled services at hotels, but cities do not require hotels to provide swimming pools and exercise rooms. Suppose, however, cities did require all hotels to provide swimming pools and exercise rooms, perhaps as a part of a public health campaign. Cities could require all these swimming pools and exercise rooms to be of at least a minimum size related to the number of rooms or gross floor area in a hotel. For example, cities could require every hotel to provide a swimming pool with at least 2,500 gallons of water per guest room. If cities did have minimum pool requirements, I expect that almost all hotels would bundle the use of the pools into the room rents. Would you then say that all these swimming pools are the result of free choices made in a free market? Would you say the market had demonstrated that hotel guests like to swim? Would you say the minimum pool requirements do not subsidize swimmers at the expense of nonswimmers? But let’s get back to parking; even swimming pools have parking requirements, and here is the minimum parking requirement for swimming pools in one city: 1 parking space for every 2,500 gallons of water in a swimming pool (Table 3-4 in The High Cost of Free Parking).
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The issue is not simply whether parking is subsidized. Even without minimum parking requirements some firms would choose to offer free parking, just as some hotels offer swimming pools and some coffee shops offer wi-fi. The real issue is whether the government should mandate the parking supply.
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O'Toole:  “Shoup also supposes (and Cowen accepts) that universal parking fees would greatly reduce the amount of driving people do. ‘Minimum parking requirements act like a fertility drug for cars,’ Cowen quotes Shoup as saying.”

Shoup: Please cite any occasion on which I have recommended “universal parking fees.” I am not even sure  what you mean by this term. If you mean all parking everywhere must have a substantial price at all times, I most certainly do not recommend that.

Figure 12-1 in The High Cost of Free Parking shows what I mean by the right price for parking, and the right price will often be zero. For example, if half of all the parking spaces at a suburban shopping mall are  empty even when parking is free, it would not make sense to charge for parking. On the other hand, if all of the curb parking spaces in a congested business district are occupied and drivers are circling every block in search of a vacant curb space, the price of curb parking is too low. Here is the link to a video that shows how to set the right prices for curb parking: http://sfpark.org/


O'Toole
:  “But this doesn’t change my main point, which is that it is one thing for Cowen to argue that cities should not price parking below market rates where there is a market for parking. I have no problem with this. But it is quite another thing to argue, as many urban planners following the Shoup model do, that private businesses should be required to charge for parking (or be limited in how much parking they are allowed to provide) in areas where the market rate for parking is zero.”

Shoup
: Please cite the source of a Shoup model that would require businesses to charge for parking. Opposing minimum parking requirements is very different from proposing minimum pricing requirements.

I have supported the policy of “parking cash out” whereby employers who offer commuters free parking at work also offer commuters the option to choose the cash value of a parking space if they do not take a free parking space at work. This policy does not mandate parking charges because commuters who choose to drive can still park free. Parking cash out gives the same subsidy to every commuter, regardless of travel mode choice, while free parking gives a subsidy to drivers and nothing to other commuters.


O'Toole
:  “The empirical question is: do shopping malls, office parks, and companies like WalMart provide parking for their customers and employees because of zoning mandates, as Shoup claims? Or would they and do they provide parking just because it is good for their businesses? Texas counties are not allowed to zone, yet shopping centers and office parks in unincorporated Texas still provide plenty of parking. Much to planners’ annoyance, many developers elsewhere routinely provide more parking than zoning codes demand. This suggests that free parking is a free-market choice, and Cowen, who generally supports free markets, should have no objection to it.”

Shoup
:  Your “empirical question” attacks a straw planner. I have never said that developers provide parking only because of zoning. I have said that zoning often forces developers to provide more parking than they would voluntarily choose to provide in a free market, where they take into account both the cost of providing the parking spaces and the revenue the spaces will generate. So please cite the evidence for your statement that many developers routinely provide more parking than zoning codes demand.

Why do you say that planners are annoyed when developers voluntarily provide more parking than zoning codes demand? Most off-street parking requirements are a minimum with no maximum. Minimum parking requirements imply that planners care only about having enough parking spaces, and that there can never be too many. Furthermore, the planning approvals for specific projects often require developers to provide more parking spaces than the zoning code requires. Few planners are annoyed when developers provide more parking than the code requires; they are annoyed when developers try to provide less parking than the code requires.

All the evidence I have seen suggests that developers often request planning variances to provide fewer parking spaces than the zoning codes require, because these requirements can seriously overestimate the peak demand for free parking. Developers must commission expensive transportation studies to justify a planning variance.

There is a lot more in Prof Shoup's 10-page open-letter (PDF). Take a look for yourself.
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