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.)
