Is Free Parking Costing Us Billions?
from the it-takes-733-pages-to-discuss? dept
Always interesting economist Tyler Cowen has a story in the NY Times discussing the "cost" of free parking. It's based on the book The High Cost of Free Parking, which spent an astounding 733 pages to delve into the subject. The book suggests that "free parking" cost people in the US at least $127 billion in 2002. I haven't read the book -- and at that page length I'm sure there's a detailed discussion on nearly every challenge -- but I do wonder if it takes into account the benefits to local businesses of free parking. The easier it is to park, the more likely people are to go to those businesses. I'm guessing that the response is that if this does make sense, it should be a per-business decision, rather than a government-mandated one, which is the main complaint. This isn't a subject I've thought much about, frankly, but I found Cowen's discussion of it interesting, and thought people around here might have some... enlightening comments on the subject.
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Filed Under: economics, free parking
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Not taxing = costing?
Govt: Because we're not taxing oxygen consumption, we're losing billions in lost tax revenue...
RIAA: Because we're not fully collecting the tax due on cultural exchange, we're losing billions in lost tax revenue...
There's a difference between revenue from productivity and revenue from taxation.
Tax is meant to be collected from the people in order to provide for the people. If it's not collected nothing is 'lost'. The people still have their money. If anything taxation loses revenue through administrative overheads.
However, a tax that ends up in private hands is simply theft from the people. Like the banking bailout.
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no parking = no business
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Free parking is evil let business have to buy real state to transform that space into garages so they can attract clients.
[/joke]
Something totally unrelated but I would like to add the following, I think farmers should start suing Monsanto when their crops are contaminated with seeds from that comapany, Monsanto should pay all the cost of getting rid of the crops and the expense of buying new grain to plant the next year and also pay the lost revenues due to contamination of crops.
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This is a reminder:
That your friendly neighborhood troll will be along shortly to attack you based on that line. Please don't make it easier for him to make stupid troll remarks by saying things like this (which didn't need saying), and for the love of sanity please don't respond to him anymore.
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Competition
Sometimes people would be willing to pay, especially businesses, which then transfer the cost to the consumer, meaning that non-free parking could make everything more expensive, which is just what everybody needs right now, isn't it?
However, whatever the result, it is easy to conclude that there is no need for 700 pages in order to understand this...200 pages seems more reasonable to me. Of course, he never would have reached 700 pages if writing wasn't free.
Now that's a problem worthy of 700 pages - the cost of free writing. It's literally killing us. People are writing instead of working. People at work, for instance, are writing comments on blogs, instead of working. I am sure this is happening somewhere, right now. Speaking of which...bye.
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I think government could spend less and ask for the population to help like the project of traffic in India.
Governments are expending too much and don't want to have to deal with the consequences of doing something which is reigning in public expending, creatively Brazil has done this already, they had a trigger that made the government create a new currency every time it got to big, they even managed to wipe out all internal debt at times only manipulating the books, but still needed to have a astere expending policy in place maybe there are some lessons to be learned from the third world.
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well
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This reminds me of another argument...
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Reminds me
It's about four economists named Brat, Prat, Miff and Biff, who are searching for a parking place in New York City. After many adventures and spiritual growth they finally realize that parking space is really not that important and that there are other things in life that are actually even more important such as clothes hangers.
Which makes you wonder - why hasn't anyone written a 700 page tome about clothes hangers? i mean, what is wrong with our civilization?
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Each person has only a definitive amount of money available to spend. So if you had to spend $ 100 more on parking, it means you cannot spend those $ 100 on something else... it's not that people put now those $ 100 on their bank accounts. The money spent stays the same, only it changes what is being spent on...
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Re:
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Influence behavior rather than cover budget shortfalls
I'm okay with aggressive enforcement of parking violations and changing free spots to pay spots, but only if the end goal is to encourage more socially beneficial behavior. It is quite clear that DC treats parking as a source of revenue rather than an opportunity to promote the public transportation system or encourage walking.
If we think about the money that free parking is costing us, then I think we're already down the wrong path. I agree with many of the above who state that it's not "lost" money, it's just used somewhere else. What we're really losing is the opportunity to improve quality of life in our highly populated areas.
I would gladly pay more to park if it meant that more people left the car at home, choosing instead to bike or walk or take the bus/subway. I realize that's not always possible, but when it is, it should be encouraged.
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"American drivers park for free on nearly ninety-nine percent of their car trips, and cities require developers to provide ample off-street parking for every new building. The resulting cost? Today we see sprawling cities that are better suited to cars than people and a nationwide fleet of motor vehicles that consume one-eighth of the world's total oil production. Donald Shoup contends in The High Cost of Free Parking that parking is sorely misunderstood and mismanaged by planners, architects, and politicians. He proposes new ways for cities to regulate parking so that Americans can stop paying for free parking's hidden costs."
In other words, free parking encourages people to drive, which is bad.
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Parking Meter Revenue
http://theexpiredmeter.com/?p=6420
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Are people less important than cars?
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Re:
So... free parking is causing global warming?
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Less RIAA...
So no, this isn't free music (with positive benefits that can be exploited by musicians), or broken windows. It's dealing with serious hidden negative externalities. Plus, think of all the valuable land being occupied by cars that are just sitting in the middle of cities. I bet a private business could make much better use of it.
On a personal note, I live right outside Boston and almost always take the subway rather than driving into the city. Why? Because parking is a pain in the ass and I can easily walk to a T stop. Of course, if you live in a city that has always had plenty of free/cheap parking (I used to live in Kansas City), there probably isn't a good way to get around other than your car. And in that case there would be some long, painful delays between getting rid of the free parking and seeing good alternative modes of transportation become viable.
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Of course back then, the charge was probably less than $1, not like the $5+, they'd try charging today...
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Re: Re:
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Re: Parking Meter Revenue
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Second, in cities (like mine) where local businesses are required to provide parking, providing the free parking in the first place hurts local businesses. A small restaurant often has to purchase a vacant lot the same size as the restaurant, which significantly adds to the expense and takes directly from the bottom line. Why not allow businesses to compete based on how much parking they provide?
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Book is a weight...
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HEY FREE AIR IS costing us TRILLIONS
also free water SCREW that
i want to pay so much i die of starvation to make bill gates richer
so he can give half that money to africa
let them eat cake and fuck me
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No more free walking
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Re:
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free parking humm
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Re: Less RIAA...
So by that logic, shouldn't we not have roads? Saying that more people will drive just because they can is a fallacy. If you want more people to use public transit, improve public transit, don't make the other options worse. Use the carrot, not the stick.
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Re: Baby Seat
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Re: Not taxing = costing?
Maybe try clicking through to the NYT summary to find out?
The point of the article is that parking receives immense government subsidies (in the form of zoning requirements, HOA restrictions, etc.), and the result is inefficient land use (along with greatly increased use of gasoline).
The $127 billion was an estimate of the value of the subsidy, not of the cost to society of the inefficiency it produces (which would presumably be much less, at least ignoring other externalities such as smog, global warming, foreign policy ramifications of oil demand, etc.).
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Re: one paragraph summary of article
Cars are evil. People who use them are crazed yahoo's who should pay the "true cost" of the automobile, and not live off the working people who are really paying for the privilege of being abused by the car owners.
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Re: Re: Less RIAA...
And yes, improved public transit and walkability of urban areas is needed. The basic point about free parking though, is that some cities allow price distortions in some of the most valuable real estate on the planet.
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Milk Money
I think you hit the nail on the head as far as the intent and meaning behind the argument.
"Global Warming" has got to be one of the best, potentially profitable red herrings in the history of red herrings. Not at all unlike the good old "Clean Water" bond initiatives that show up every presidential election cycle on California's proposition list:
Every four years in the U.S.. we get the common sheep coming out in droves thinking they are doing a great thing just voting for President (far from the truth, and an absurd notion in the first place that the President is some kind of all-powerful leader in the U.S.). This demographic tends to "vote with their conscience" using only the on-ballot briefs for every other item beside their favorite Executive horse. The sheep see "Clean Water" in the description and think "yes, clean water is important, I must vote yes". The problem is when you read the details of the proposition (in the voter pamphlet btw... which so few people read), these bond propositions carried no obligations to allocate the borrowed funds for any specific purpose... they go to general use. It's an easy formula to profit.
With global warming, we see the very same "yes we need clean water" effect, only on an international scale.
People are willing to open their pockets and change their lifestyle to protect their home. Now we have international negotiations to limit productivity and centralize control of industry in general in the name of global warming. I cannot think of a better way to freeze time and money in place and prevent the redistribution of money based on market changes and innovation.
I cannot think of a faster more effective way to return to feudalism.
I have respect for the Greens who honestly do care for the environment, however I fear any similar cause, once taken up by the powers-that-be, will be abused and milked for every penny and liberty possible to the benefit of those in power, and to the detriment of the rest of the world's citizens... with no effect on the environment at all.
We'll see.
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Yeah, you do that...
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Re: Re: Re:
Most state fairs have gobs of parking around the fair, if you don't want to pay you can walk.
It is more amazing to me that walking is less of an acceptable activity in our society than paying for space.
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Re: Re: Re: Less RIAA...
This is of course hogwash IMHO. More roads always equals less congestion in the the short term. The idea that building more roads will encourage more people to drive is simply untrue. More people equals more people driving not more roads.
I do agree with the premise of this argument though. Less free parking would of course mean that city planners would actually have to provide decent mass transit though, something that typically costs far more than providing free parking. Of course with no free parking ridership would increase so maybe it would all work out?
I would never agree that the most "valuable" real estate can be found in the city though. I guess it matters what you place value in. I personally value forested property along beaches. Now that is some valuable property.
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Re: Competition
I don't know that it makes sense to discourage travel by automobile if there's no other viable means of transport in place. In some cities there is, in many there is not.
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Re: Milk Money
there's only so much oil to be had and air quality does go down a lot in places where there's a lot of cars.
that aside, the USA is far from the only place where not enough people think about what they're doing when it comes to voting :)
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Re:
That's not true. If parking is bad in the entire city, or in all the places I would otherwise like to go, I can just shop online. Then the only local business that gets anything is the delivery company, and they're not really local anyway.
Why not allow businesses to compete based on how much parking they provide?
Agreed, mandating that businesses provide parking (or even worse, free parking) is stupid. Let the market deal with it. Parking on public streets is a public policy matter, otherwise the government should stay out of it.
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Re: Re: Milk Money
Not that I can look down my long nose at Americans as we Canadians are getting just as bad or more clearly recognizing the futility of voting when it serves no purpose as it becomes clearer that Pete Townsend was right: "Meet the new boss, same as the old boss"
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Re: Book is a weight...
If there are no (or almost no) open parking spaces, how could making them free increase the number of people that go?
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Re: Re: Not taxing = costing?
Sometimes one is so busy riding a particular hobby horse, there's little time to get off and walk a few miles in other shoes.
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Market-based approaches have transaction costs
It seems unlikely to me that many municipalities pass laws requiring businesses to provide parking without a great deal of input from local business, so I suspect each area decides somewhat rationally among three choices:
1. No regulations, and (some) businesses provide free parking. This creates a significant “freeloader” problem: the freeloaders being other businesses that do not provide parking. I’ve lived in areas like that. I would frequently park in the grocery store’s “customers only” lot, walk in (in case the lot was being watched), and walk out two minutes later without buying anything, to go to the store I really wanted to visit. The cost of monitoring the parking lot closely enough to prevent such unauthorized use would be unreasonable... but I’m sure those locations that offered parking had to over-supply to make up for other businesses that didn’t provide parking.
2. Regulations requiring businesses to provide adequate parking. The downside here, of course, is the need to rely on central planning instead of market forces to strike a good balance, and the imposition of a “one-size-fits-most” approach that cannot readily adjust to the varying economics of different individual businesses.
3. Paid-for parking (possibly including businesses that validate parking slips for free or reduced-cost parking). This brings back the market, and solves the freeloader problem, but it introduces significant transaction costs, for both businesses and their customers. Not only do I have to fish the coins or bills from my pocket, and wait to get through the toll gate (or decipher the parking meter, or whatever)... I have to ask myself if it’s worth it. Suppose the store I came to visit doesn’t have what I wanted to buy, or the restaurant doesn’t look so good once I see the decor and the menu in person? The toll booths have to be manned; the money has to be counted; validation/discounting, if used, requires further procedures; all to restrict potential customers from simply parking and accessing the businesses they want to visit without friction.
It seems to me that people — even, and perhaps especially, economists — tend to forget about transaction costs (when thinking about anyone other than themselves). It’s difficult to put a price tag on cognitive transaction costs; but in a world where information and choice overload is a normal condition, the value of one less decision to make should not be underestimated. It often means that the theoretical efficiency of a market becomes a glaring inefficiency in practice, and either a freeloader problem or the sluggish and imperfect adaptation of centrally-mandated requirements might be preferable to thousands of individual choices and all the accounting, enforcement and cognitive transaction costs that go with them.
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Re: Re: Milk Money
True, however this is not the fault of the people driving cars. Independent inventors have been coming up with fuel efficient and alternate fuel vehicles since the middle of the 20th century. These forward looking designs were systematically suppressed thanks to the patent system and the sponsorship of Big Money interests by the U.S. government.
Mercantilism is not for the masses nor for the environment.
Should we trust reform to the same people who allowed us to get in this position of having a huge (nearly legislated) demand for a limited natural resource?
Sea change was ready decades ago, only the entrenched money players, with the help of legislative powers, prevented the evolution of the market. - This is exactly what multi-national industrial "controls" will do. Change for the better will be stymied at our expense as well as the world's.
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Re: Re: Re: Not taxing = costing?
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Subsidized Parking
must be discouraged, so as to encourage the use of public transport. Of course when the subsidy ends the workers will just pay out of pocket. Net effect: paycut.
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Re: Book is a weight...
A few years ago the Vancouver Parks Board introduced paid parking thoughout their system including the beaches which led to a lot of grumbling but no drop in beach usage at all. Right now it's on its way to 30C today and the beaches will be packed.
Parking meters are a fact of life in many cities, particularly in the core. Yet the "destination" shopping in Vancouver and Victoria remain in metered areas and where off street parking is horrendously expensive in both. (BTW, it's the same in Seattle and Portland OR) You better believe the tourist traps in the cores of now 4 cities are heavily metered and off street rates are a joke yet they remain packed with visitors. (Tourist is a bad word so it isn't used much anymore.)
Things change in the burbs, of course. "Free" parking is provided in endless cookie cutter strip malls and in mega store parking lots but the consumer pays for that, too, either in increased retail cost or reduced selection.
As for people heading off to the beach, spending more money in surrounding shops and such, it's up to businesses that cater to the beach crowd to locate there and not furniture stores, right?
There's one other cost to "free" street parking and that's in increased municipal taxes because those roads have to be built and maintained somehow and guess who pays?
The balance is in what's more valuable to the city's economy and dynamism not in who goes to Wal-Mart.
Yes, there are on line options available, lots of them, but in many cases people still want to go to bricks and mortar and see the stuff they're thinking of purchasing. Destination shopping will remain that because it's being in the destination that's as or more important than actually purchasing something and the shops that set up there know that. Tourist traps remain tourist traps that the locals avoid in favour of less expensive fake local stuff.
There are lots of arguments for and against paid street parking and, as I tried to say above it has nothing to do with taxes because, in the end, the residents of the city will pay for the new roads and road maintenance regardless.
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Re: Re: Re: Milk Money
They do not. I don't have a link to the latest stats, but when we have a Presidential election every four years, about 45% of our population that could register to vote turns out to vote.
In the elections that really count (i.e. every election except the four year cycle) I think the number was closer to 12%.
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Re: Re: Baby Seat
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A second main point of the book is that often even with free parking there is no where to park, because it is all full. His idea is to price parking at a level where it is ~80% full, so yeah you have to pay but you always know that you will be able to park on the block where you are going without having to drive around circling looking for a space. this can actually encourage people to shop at places that currently have very little open parking.
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Just what one would have expected
According to these people, the benefit to you from being able to drive to a store and buy a replacement window, put it in the back of your truck, drive back home and replace the window is the same as you walking to the store, carrying the window on your back all the way home, replacing it and then croaking on the spot from heat exhaustion. After all, in both cases, you got a new window.
If there were no parking spaces at the mall, people might walk or take public transportation to the mall. The fact is, though, looking at places where cars and parking spaces were not abundant before and malls are just beginning to pop up (say, Ankara, Turkey) it looks like most people are made happier by being able to drive to the mall, even if Marxist City Planners don't want them to be.
See http://blog.qtau.com/2010/05/deceptive-lure-of-tyranny.html
Here is some Mises:
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Is free breathing costing us billions? Imagine all the money we can make if everyone was charged for breathing.
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Re: Less RIAA...
I spend less or nothing at places that don't have free parking. In fact I was given free tickets twice and didn't go because the parking was $40 to park. Yeah I'll pass. If your business model is so poor that after having a taxpayer funded stadium built you get to charge said taxpayers a minimum of $40 to pay you even more money then forget it. I used to drive trucks in state and didn't stop at places without free parking or bathrooms I could use and I can promise you I wasn't the only one.
Here's something you people who are against so called free parking seem to forget, the people at the bottom hurt more when you get rid of things like free parking. Prices go up when parking has a cost and i challenge you to find somewhere that hasn't happened. It happened with the subway, it happened with the trains, it's happened in the city and it would happen at the grocery store because those costs are going to go right to the consumer. It's just another tax on the poor and middle class.
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Free Parking
Government-mandated? It can revitalize an area; and responsibly used, is a valuable governmental tool.
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Re: Less RIAA...
Here in Seattle, which has a pretty decent system, it can still take you two to three hours to get from one part of town to another by bus, compared to a 15 minute trip by car, if you want to get there at 7pm on a Saturday night.
If you want to commute to downtown and back at rush hour, no problem. The rest of the time a couple of hills over and it's a nightmare.
The no free parking people want to penalize car users before we have solutions to moving people from one place to another. All it does is breed resentment for people that are trapped by the infrastructure. Until public transportation approximates the functionality of single vehicles, we're not going to get people out their cars.
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Re: Re: Re: Re: Less RIAA...
I live in the San Francisco Bay Area. Many people have chosen to avoid the high cost of real estate at the dense core of the area by living in towns like Tracy, which are maybe 70 miles from the core.
Many of these people continue to work in Silicon Valley, driving the 140 mile round trip each day in mind-numbing traffic. But many, many others choose to pay more for their housing, or live in smaller homes in order to avoid that awful commute full of traffic.
Now, widen all those interstates. What do you think people will do? Damned right a good number of people will see the empty lanes, and Tracy will boom again until we reach a new equilibrium of congestion. Many people like you will move to the coast for those forested beaches, and just drive further into work each day.
Yes, people do drive more when we build more road.
"More roads always equals less congestion in the the short term." I'm not sure short-term thinking is what we want from our city planners.
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The socialist model for parking
Went to a town called Morlaix. Lovely centre, sunny day, what better time to eat out in the shadow of the imposing viaduct.
There are several big squares, all with parking.
Now they know that there is a fair amount of demand for parking all day (people want to park near where they work) but a huge amount of demand at lunchtime.
If they were rampant capitalists, they'd hike the prices at lunchtime. Instead, they keep prices high most of the day and then make it free to park 12-2. This misses out on a huge slice of lunchtime car parking revenue, but encourages people to come into town to eat lunch at the cafes and restauraunt.
That's what I expect from a municipal authority that actually understands what they are there for - to look at the big picture for the whole town, not just monetize some land they own.
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