I don't like parking minimums. They usually waste space and money by forcing developers to build more parking than their customers need or want.
I'm not a big fan of parking maximums, either. The standard argument for them is that unrestricted parking encourages car-dependency and discourages walking, mass transit and pedestrian-friendly streets. A city cannot force people to use a particular mode of transportation, though. It can try, but when its fiat doesn't match market demand, people simply go elsewhere and the city does more harm than good. It's better to let rising density and property values and good mass transit gradually and organically evict low-value uses like parking. Reasonable design standards, like mandating ground-floor uses, can prevent parking from destroying the public space.
But I've recently heard an enticing argument for parking caps in downtown Austin. It runs along these lines:
Downtown Austin has "too much" parking -- there are far more parking spots than cars, far more supply than peak demand. Yet developers continue to build more on-site parking than their own projects need, even ignoring the ample supply of parking within walking distance.
All of this unnecessary parking is wasteful. Developers waste hundreds of thousands or millions of dollars on parking spots that will never be occupied. And practical problems with providing more than eight or nine stories of parking limit the height, scale and habitable space of new buildings.
So why do developers do it?
Developers do it because their lenders make them do it. Developers typically put up only 20% of the money for a project. Equity partners front a second tranche of 20% or so, and lenders finance the remaining 60%. This means that lenders have the greatest exposure. Which makes them extremely risk averse. They don't want a project to fail just because it lacks enough parking.
Lenders can read a parking study like anyone else. Lenders know perfectly well that there is already ample parking in downtown Austin. But they worry that if their project does not have plenty of on-site parking, it will be undercut by the next project that does. So they require lots of parking -- even though the project might be cheaper and more profitable with less parking.
Excess parking downtown is thus the result of a sort of prisoner's dilemma. Each lender would be better off if all lenders required less parking, but without an ironclad assurance that they will do so, each lender must assume that the others will require extra on-site parking. And then it must do so, too.
The argument for a parking cap, then, is that it would resolve this dilemma by giving lenders the assurance they need to require less parking. Then developers could build less parking, and new developments would be cheaper to build and provide more capacity to boot.
It's a neat argument. I don't know whether lenders really would be as willing to put of money for projects with code-mandated maximums. But that seems to me to be a discrete, empirical question that ought to have a definite answer.
