Austin Contrarian

Sometimes parking regulations don't matter

I think minimum parking requirements are bad policy.  If I had my way, the City would abolish its minimum parking requirements tomorrow. 

I'm a Shoupie.

But it's worth reminding oneself every now and then that the regulations on the books -- even the bad ones -- don't always matter. Minimum parking requirements don't matter when the market demands (or, at least, the developer perceives the market to demand) more than the minimum.

Greystar's proposed mixed-use project at 1200 S. Lamar (the South Alamo drafthouse site) is a case in point. According to the parking calculations on the site plan, the project will provide almost 60% more parking than code requires.

I'm sure this demand for parking is being driven by the Alamo Drafthouse. Anyone who's been to the South Lamar Alamo -- or tried to get take out from Suzi's China Kitchen -- on a Saturday night knows that the Alamo gobbles up parking.

There is good evidence that parking regulations do matter in general. They can matter a great deal in specific instances. How much extra space do we reserve for empty asphalt thanks to city regulation? We don't know and we can't know unless the city gets rid of its minimums. But it's important not to be seduced into believing that every massive parking garage or expansive surface lot is a manifestation of bad city regulation.

The City gets it right, sort of

From today's Statesman:

A new city program would let neighborhoods apply to have parking meters installed on their streets. In exchange, the city would spend some of the revenue on improvements to the area, such as sidewalks, lighting, landscaping and bike lanes.

Obvious candidates would be neighborhoods near busy commercial corridors, such as South Congress Avenue or Guadalupe Street, that are regularly clogged with overflow parking by customers or students, said Steve Grassfield , the city's parking enterprise manager.

If the City Council OKs the program today , a neighborhood group near the University of Texas plans to apply to convert as many as half the free parking spaces in West Campus — 400 out of an estimated 800 — into metered or permitted spaces.

This is a good idea.  City Council should approve it.

It is not a good idea, though, to retain the Residential Permit Parking Program.  The RPPP is a horrible way to ration street parking because (1) it excludes drivers who might put a very high value on the parking spaces in favor of residents who might put a low value on them; and (2) it is a giveaway of public property to neighborhoods. 

As long as RPPPs remain an option for neighborhoods, I imagine most will choose RPPPs over meters.   From their perspective, merely getting a cut of meter revenue isn't enough; they must get enough revenue to compensate them for giving up the RPPP option.  The Statesman article implies this is the case.  Staff just announced the program, though, so we'll have to see whether they retain their skepticism. 

Complaining is cheap

The City is proposing to tighten the standards for its Residential Permit Parking Program.  This is the program by which the City transfers to homeowners, for free, effective ownership of a portion of the public right-of-way in front of their houses.  The new standards would "raise the bar on documenting need" by, for example, requiring traffic studies.

To the extent this reflects a new-found hostility by City planners to neighborhood demands to exclude outsiders, I'm of course entirely sympathetic.  I will also be happy if the new standards make it more difficult for neighborhoods to participate in the RPPP.

But as a matter of policy, this makes no sense.  Parking near busy commercial and popular entertainment centers is scarce.  It is valuable.  The scarcer the parking on commercial corridors, the more valuable the parking spots on residential streets.  The City's new standards are simply another way of telling neighborhoods and nearby businesses, "We want to make sure that public demand for parking is really, really high before we ban it."   It is as if the City wants to verify that a parking ban will inflict maximum harm.

And parking bans do harm neighboring businesses.  It is of course true that spillover parking annoys some homeowners.  There is no sense trying to tell them they should not be annoyed -- if you are annoyed, you are annoyed, and that's the end of the matter.  But this kind of externality is perfectly symmetric.  Banning parking because it annoys a homeowner inflicts a cost on neighboring businesses by stripping them of a portion of their existing, limited supply of parking.

What the City ought to do is minimize the net cost of these externalities.  Who cares more?  If homeowners value empty asphalt more than neighboring businesses and their customers value parking spaces, then we should assign the spots to the homeowners.  And vice versa.

I suspect that in high-demand areas like South Congress, the businesses and their patrons value the spaces more.  But there's an easy way to settle this:  meter the spaces.  The meter income will tell us what value the public places on the spaces.  Price the spaces accordingly and then allow homeowners to buy the spaces in front of their homes.  The spaces will go to the party who values them the most. 

Homeowners would dismiss this policy as unfair because, seriously, who will or can pay a big chunk of money to keep the street clear in front of his home.  But that's the point.  Complaining is really, really cheap.  The City today is transferring property rights from the public to groups of homeowners without any compensation to the public, based on nothing more than cheap talk.  We can't tell how much someone really cares until we make him pony up some dough. 

My own rebuttal to O'Toole

Stephen Smith at Market Urbanism points to a debate at Cato Unbound where Donald Shoup and Randal O'Toole vie for the title of free market defender of parking policy.  Shoup contends, of course, that legal parking minimums distort urban property markets, encourage congestion and promote sprawl.

O'Toole makes a number of arguments but Smith responds to O'Toole's contention (more accurately, his insinuation) that parking minimums do not actually interfere with the market because they are not binding.  Stephen gives a detailed rebuttal to this passage in particular:

To find out what cities would be like without minimum-parking requirements, we must turn to Texas, where counties aren’t even allowed to zone, much less impose minimum-parking requirements. This means developers are free to build for the market, not for urban planners. While cities are allowed to zone, for the most part they maintain minimal restrictions so as not to lose potential tax-paying developments to areas outside their jurisdiction. The result, as anyone who as toured Dallas, Houston, or San Antonio knows, is large amounts of low-density development supported by plenty of off-street parking, all without minimum-parking requirements (at least outside of city limits).

 I'm firmly on Shoup's side here and so want to offer my own rebuttal to this argument:

1.  O'Toole says there's "plenty" of off-street parking in the unincorporated portions of Texas counties, which do not require parking.  (But perhaps they do.)  The specific issue, however, is whether cities generally require more parking than the market would provide.  Saying there's "plenty" in the unincorporated areas isn't good enough; he has to show that property owners there actually build as much or more than the neighboring city minimums.  He doesn't even make this claim -- which is the one relevant to his argument -- and anectodal impressions from a driving "tour" wouldn't be rigorous evidence anyway.

2.  Stephen makes this point, which I'll restate:  Even if rural property owners build more than city minimums, this does not imply that urban developers voluntarily build to the minimum.   A parking space in the city takes up as much land as a parking space in the countryside.  But urban land is more valuable and so that urban parking spot has a higher oppurtinty cost.  As urban land rises in value, developers working at the margin will choose less parking and more building; given fixed parking minimums, rising urban property values will eventually make the minimums binding. 

3.  We don't have to rely on basic microeconomic reasoning.  Three economists have conducted an empirical, econometric analysis of L.A.'s parking space.  They found that parking minimums are usually binding for commercial uses in L.A..  Indeed, they are binding for 99% of gas stations and restaurants.   One empirical study of one market is not conclusive evidence that parking minimums are binding everywhere, of course, but it is more persuasive than O'Toole's drive-by appraisal.

4.  Finally, but most obviously, parking minimums are contested by property owners all the time.  To wit.  What's O'Toole's message to these property owners?  "Come on, you know you want it"?

I don't want to unfairly characterize O'Toole's position.  The above passage was just one of a number of points he makes.  He says he fully supports eliminating minimum parking requirements for developers.  He does not contend that parking minimums are never binding.  But observing that developers build "plenty" of parking in the countryside is no evidence that they would build to the minimums in the city.

If you don't need all that parking on your busiest day ever, then . . .

. . . you don't need all that parking.

A couple of those who commented on my rant against the Twin Oaks library's excessive parking suggested that there might actually be demand for those 51 parking spots.  Story hour, for example, could draw dozens of kids.

But parking spots are not necessary simply because they might be occupied sometime during the week, month or year.

My wife took my two kids to the Twin Oaks' grand opening last week.   (I've reserved Saturday mornings for, uh, intense meditation.)

She said the place was packed.  She estimated that hundreds turned out for the opening.  People were often packed shoulder-to-shoulder inside the library.  Outside, two tents had been set up next to the parking lot -- one for dignitaries like the mayor and the other for food.  There was even a band.

As for the parking lot, it was closed to all but a handful of cars.  They needed that space for the people.

So on what will surely be the library's busiest day ever, its patrons managed to find street parking.  Which means the City built too much parking.  QED.

A cool new Warehouse District development

There has been a lot of hand wringing the last couple of years about the collapse of the commercial credit market.  Many of us in Austin have worried that the collapse will cripple badly needed redevelopment downtown for years to come.

It turns out that those worries are unfounded.   The first green shoots are shooting.  Just last week, the owners of a just-demolished Warehouse District building installed a brand spanking new surface parking lot at 5th and Colorado:

 
 

It's conveniently located in the very heart of the Warehouse District.  The parking lot will save patrons of the restaurants and bars along 4th and 5th a trudge from one of the many surface parking lots a a full block or two away.  Better, it breaks up the monotonous row of restaurants and offices stretching from Congress to Lavaca, provides some badly needed open space, and gives passersby an unobstructed view of the towers on 2nd street -- a view that they could enjoy before only by standing at the corner of the block. 

Sarcasm doesn't play well, I know, but leveling a building for a parking lot in the middle of the Warehouse District deserves contempt.

The owners are planning an 18-20 story hotel at the site.  (Jude Galligan has the renderings.)   I think that's a great spot for a well-designed hotel.  It would further enliven one of downtown's best streets.  I won't miss the vanilla two-story building and don't think it deserved preservation.  This will be a net gain for the District . . . if the owners follow through.

And that's the catch.  In this market -- a wretched credit market and equally wretched travel (and hence hotel) market -- any proposed development is speculative.  Anyone can draw up nice renderings; finding the money to erect that first crane is the hard part.  It might be years before we see anything there.  The shiny concrete parking lot tells us the owners think so too.  

I have no objection to property owners downtown speculating in real estate by deferring the redevelopment of their property.  "Banking" property is  a benign practice: it smooths out property prices and establishes a reserve of buildable lots to meet future demand.

What I object to is this form of land-banking.  Retaining a low-rise building and its tenants keeps a street healthy; demolishing it for a surface parking lot wounds the streetscape and hurts surrounding property values.  Those are bona fide negative externalities.   

Putting a surface parking lot in this spot displays the kind of contempt for downtown that fuels the historic preservation movement.  Given a choice between an ugly surface parking lot and preserving a nondescript low-rise in perpetuity, most will take the building.  Even if a denser, taller building is a better use of the property.   

Maybe "contempt" is too harsh.  I assume the owners know their business and this was a rational business decision.  It's pointless to fault someone for acting in his own self-interest.  The city can change the incentives, though.  It should have done so a long time ago.  Instead, it is preoccupied with devising new ways to burden buildings that might actually get built. 

Parking regulations matter

I'm a big fan of Donald Shoup.  The High Cost of Free Parking lays out the theoretical case against minimum parking requirements.  It's a compelling one.  Minimum parking requirements waste land, shrink buildings, increase congestion and car-dependence and hurt the environment.

That's the theory, at least.  If Shoup's book has a weakness, it's the lack of empirical support.  His critique doesn't hold water unless minimum parking requirements actually matter.  If developers generally build more than the minimum anyway, then we've got a market failure rather than a regulatory failure.  This really is an empirical issue.  Several recent developments in downtown Austin, for example, have more than the minimum.

Shoup doesn't offer much evidence that minimum parking requirements make developers build more parking than they want to.   He cites a couple of case studies and his personal experience on Los Angeles's design review board and not much else.   It's not his fault, really; that empirical work simply hasn't been done.

A couple of economists have stepped up to plug this gap.  They systematically analyzed the commercial market in the Los Angeles area and found that, yes, indeed, minimum parking requirements matter.

They approached the problem from a couple of directions.  One was a "direct" approach.  They compared the number of parking spots built to the number of parking spots required.   If developers generally build more than the minimum, then the minimum is not binding.  If developers build just the minimum or fewer, then the minimum is probably binding.

They found that office buildings usually had less the minimum.  On average, properties had .97 spaces for every required space.  That certainly suggests that parking minimums are binding.  It's actually a bit puzzling since it suggests that cities perhaps aren't enforcing minimums.   But parking regulations have changed over time; cities generally require more parking today than they did in, say, 1950.   Older buildings thus tend to have less parking than the current requirement.

The "direct" test is hardly definitive.  So the authors also ran an indirect test.  They used fancy econometric techniques to estimate the marginal value of a parking spot for commercial properties in the suburban parts of  Los Angeles County.  In other words, they determined how much value the "last" parking spot adds to the sales price  In a competitive market, developers should add parking until the value of that last spot equals the cost of building it.  Developers who build parking at a loss are either very stupid or -- more likely -- doing it only because the city makes them do it.  

It turns out that 88% of commercial properties in suburban Los Angeles have parking spots that cost more to build than they're worth.    The percentages vary wildly by type of property, though.   "Only" 80% of industrial properties have more parking than one would expect.  But 99% of restaurants and gas stations -- 99% -- and 91% of shopping centers have more parking than they'd voluntarily build.  

One study can't settle the empirical issue.  But this is a start.  And it's good evidence that Shoup is right.  

(H/t MR.)

Setting a bad example

The City occasionally gets land-use planning right.  Downtown's Great Streets program is a success.  The City has reduced minimum parking requirements downtown; the minimum is now below market demand, which is a good thing.

But elsewhere, the City is still getting things wrong.  It over-regulates land uses.  It sets aside too much land for low-density, single-family housing.  It imposes wasteful water-retention and drainage requirements.  It mandates too much parking.     

The City also sets bad examples when it has the chance to set good examples.  The new Twin Oaks library in the Bouldin Creek neighborhood is a case in point. 

The library is supposed to epitomize eco-friendly design.  I know this because it has solar panels and (obnoxiously) reserves prominent parking spaces for hybrid vehicles.  

These are mere flourishes, though, gestures to environmental correctness.  In reality, the library epitomizes car-centric, suburban design.  It's most prominent feature is not the patch of solar panels, but a giant parking lot:  

 

This parking lot has 51 parking spaces and spans roughly three quarters of the lot's width.  That's a whole bunch of parking for a little neighborhood library.

Now, it's a really nice parking lot.  It has an attractive central island and sidewalk and planters.  These expensive features were only necessary, though, because the parking lot is so big.  Had it cut the parking lot in half, the city could have saved money and space.

I don't know how the planners settled on 51 parking spots.  I am deeply skeptical that the parking lot will ever be even half full, though.  Opposite the library is a small commercial cluster consisting of a barber shop, mini-mart, Thai restaurant, coffee shop, clothing boutique and architect's studio.  They have fewer than 3o parking spots combined.  

Even if 51 spots were "necessary," though, there was no need to build them all on-site.   The library is surrounded by residential streets with plenty of room for on-street parking.  Curb parking here:

is just as handy as a striped parking spot, and shaded to boot.  

That's the suburban mentality:  build on-site parking that will sit mostly empty most of the time; "protect" neighboring residents from the insult of having a strange car parked across the street.  

All that extra asphalt causes unnecessary run-off, which is bad for the environment.  All that extra asphalt ran up the construction cost.  Perhaps most importantly, though, all that extra parking wasted a lot of land.  Had the city shrunk the parking lot by half, it could have sold off the other half for redevelopment as a small neighborhood store.  Land is expensive in this part of town.  The cost of that wasted land was the lot's biggest cost. 

Update:  I don't have a problem with the design of the building itself.  As one commenter noted, the building was placed in the front corner of the lot, which is better than relegating it to the rear.  The building's architecture is fine -- it has a modern, Austin flair, and fits the neighborhood.  There is a solid iron fence and sort of moat separating the library from the sidewalk on Mary, which is unfortunate.  I assume the moat was dictated by topography so I'm giving the city a pass on that.

Parking bombs

The Overhead Wire on the destruction wrought by downtown parking.  The Houston photo is stunning.  

I don't believe, though, that the interstate highways share equal blame with parking for the destruction of American downtowns.

I suppose I should be careful with my definition here:  I mean "Given the construction of a large, nationwide network of interstate highways, the decision to route them through downtowns did not have a material impact on the health of downtowns."  

The typical large American downtown before the 1930s or so developed around a rail, harbor or port.  Manufacturing clumped together near the transportation hub to save the hefty cost of moving heavy things.  Service and government workers -- the only inhabitants of today's downtowns -- located downtown because that's where their customers were.

This model was doomed once the country decided to build a national network of high-speed highways.  It was just a matter of time before manufacturing decamped to cheaper, less congested greenfields.  It didn't matter whether the highways ran around, through or under downtown -- manufacturers weren't going to pay a premium to be down the street from a rail terminal they no longer used.  Downtowns were in for a radical restructuring.

Now downtowns are occupied mainly by service and government workers.  More to the point, they are occupied by service and government workers who purport to service the entire metropolitan area.  A downtown Houston law firm with a large oil-and-gas practice doesn't market itself just to downtown energy firms; it sells itself to firms in the Energy Corridor, too, even though they are a 10-mile drive down the Katy Freeway.  It is easy to run a metropolitan-wide law practice from downtown Houston if it is easy to get to downtown Houston from any point in the metropolis.  A rich network of highways (or of light rail or commuter rail lines -- nothing in this argument depends on the mode of trip) makes the central location more attractive, not less.

Note that this has nothing to do with the impact of highways on housing patterns.  Highways of course have facilitated sprawl.  By lowering the cost (in time) of commuting from land on the periphery of the metropolis, they make that land more attractive for residential development.  But this isn't the dynamic that causes businesses to disperse.  Service firms like to cluster near similar businesses, near their customers, and near their suppliers.  They will do all three if they can.  When they can't do all three, they must choose.  The trade offs are more acute when a downtown has poor access to the rest of the metropolitan area.  In the long run, downtown Austin will suffer for its inaccessibility.

Don't take any of this as an unqualified endorsement of slashing interstate highways through downtowns.  They hurt property values in their immediate vicinity.  They wreck the neighborhoods that are plowed under, barricaded or sundered to make room for them.   But American downtowns would have experienced wrenching change even if highways hadn't been run right through them.  And American downtowns would be more desolate than they are today without the highways.

Parking is another story . . . .

Using asphalt more efficiently

Most mornings on my way into work, I stop at Coffee Bean & Tea Leaf on South Lamar, a new coffee shop between Riverside and Barton Springs, one door down from Bridges on the Park.  (The building used to be a soccer store.)

If you are looking for an example of how code mandates too much parking, here you go.

According to Travis County tax records, Coffee Bean & Tea Leaf occupies an 8,861 sf building.   City code requires restaurants to have 1 parking spot for every 100 sf for the first 2,500 sf, and 1 spot for every 75 sf over that.   This means that CBTL, had it built on a suburban greenfield, would have needed 30 parking spots to comply with code. 

It has 13.

And -- surprise! -- thirteen is enough most of the time.   Most mornings there is at least one  empty spot to the side of the shop.   Some mornings there is not, but even then I manage to get my coffee.   I park on Lee Barton Drive.  Or I park in the Taco Bell parking lot next door -- which is no big deal since Taco Bell lets CBTL use its parking lot before 10 a.m.  I doubt CBTL loses any business because it is "short" 17 parking spots.

I'm not sure how CBTL got away with fewer than code requires.  Perhaps it got a variance.  It sits on a narrow lot and could not have added another 17 spots without tearing down the building.  Perhaps the number of parking spots were grandfathered.

Regardless, CBTL illustrates how our code requires too much parking.

It illustrates another point, too.  Businesses want their customers to have a place to park.  Sometimes they might prefer to provide another 2,000 sf of asphalt.  Sometimes, though, they might prefer to find space elsewhere that is not being used.  The asphalt on Lee Barton Drive, rather than lying  empty, is now being used productively.  Taco Bell's asphalt, rather than lying empty before lunch time, is now being used more productively.  CBTL avoided pouring a bunch of concrete that would have lain empty 23 out of every 24 hours.   Each square foot of asphalt provides more value now than before.  And that's all because CBTL was allowed to figure out an informal solution to its "shortage" of parking.  

If there, why not everywhere?