January's episode of Reinventing Parking introduced six surprising parking reform ideas.
This post explains the fourth idea, "Alternative to maximums: make parking count as floor area".
This is a lightly edited transcript of that part of the episode, which starts at the 14:05 point.
Alternatives to parking maximums
The idea in this section is about actively deterring excessive parking supply but doing so in a less rigid way than parking maximums.
Let me explain a little before I get to the idea.
Sometimes parking reform needs to go beyond just refraining from promoting oversupply
Conventional post-world-war-two parking policy treats off-street parking as a benefit for society that the market will inevitably under-provide, so that governments need to promote, subsidize or mandate to make sure there is enough.
Today, most of us believe that off-street parking is not a social good to be promoted but a costly private good and that it also has large negative side-effects, so that we should leave its provision to the private sector, and that there is more danger of over-provision than under-provision.
Abolishing parking mandates is about refraining from boosting parking provision. But maybe we should go a little further than just refraining.
After all, over-provision often still occurs even without parking mandates. And in many places, we still have enormous parking gluts where we might want to speed up the process of reducing the parking supply.
Why we might want alternatives to parking maximums
One approach is parking maximums.
But parking maximums are controversial even within the parking reform movement. Setting parking maximums is inevitably rather arbitrary, just like setting parking minimums is arbitrary. And parking maximums usually impose a hard limit for each project.
It would be nice to have a less rigid way to discourage excessive parking supply.
One idea is to levy a fee on every off-street parking space provided to discourage excessive provision. Mexico City has done something like that, although the actual implementation hasn’t quite worked out apparently.
Here is another alternative to rigid maximums.
Cities could make some or all off-street parking count as floor area in planning permission processes.
And this idea has at least two real-world examples: Singapore and São Paulo.
Until 2019 Singapore had parking minimums but no maximums. HOWEVER, only parking up to the minimum requirement was exempted from counting as floor area. Parking in excess of the mandates was counted when a planning application was considered (at least for non-residential uses).
Providing parking beyond the required minimums had a very high opportunity cost for developers. To provide more parking they would have to provide less office or retail floor space, uses which have much higher returns than parking. Ouch.
As a result, most of the real estate industry in Singapore used to think of the parking mandates, which were minimums at that time, more as targets. They were treated as both minimums AND maximums at the same time.
In São Paulo something similar has been in place since 2014 with the explicit goal of discouraging excessive parking provision in buildings within transit corridors.
Below a certain threshold provision level, parking does not count towards the allowed Floor Area Ratio under the zoning rules. But parking beyond the threshold DOES count.
Again, for parking spaces beyond the threshold, developers must now choose between parking spaces and more lucrative uses of floor space. Furthermore, any development fees associated with building floor area in the city also applies to the excess parking.
Exempting parking from counting as floor area is really a hidden subsidy and boost to parking supply.
Cities that have grown out of their old-fashioned desire for abundant parking should consider eliminating that out-of-date parking-supply boost by making parking count as floor area.
I think this deserves some attention. It might be a promising and less rigid way to deter excessive parking provision than parking maximums.
What do you think?
Listen to the audio episode here:
IF YOU LIKED THIS
Subscribe, if you haven't already (it's free):