Following up on thoughts in the previous post about what is to be done about the Washington Metro… Here is a basic maxim to remember: If we want more people to avail themselves of shared ridership, be it commuter rail, bus, or shared ride-hailing services, they need to pay the full cost of their transportation choices. At present, nobody pays the full cost. Just as mass transit is heavily subsidized, so is automobile mobility.
Here in Virginia, motorists pay a portion of what it costs to maintain and build new roads, bridges and highways through retail and wholesale taxes on gasoline. But they also pay taxes on the purchase of new cars, which is unrelated to how many miles they travel and the wear-and-tear they put on the road system. They also pay a sales tax, which has no connection to transportation at all.
Transportation funding is just the tip of the subsidy iceberg. The current system for allocating parking spaces represents another wealth transfer, and the subsidies are all the more insidious for being invisible. However, Donald Shoup, the nation’s foremost academic authority on parking, has published a new book that sheds light on those subsidies. I have not yet read the book, “Parking and the City,” but I crib here from a review in Public Square, a publication of the Congress for the New Urbanism.
The first nationally representative survey shows that urban garage parking is costly to renters, for example. “We find that the cost of bundled garage parking for renters is approximately $1,700 per year, and the bundling of a garage space adds about 17 percent to a unit’s rent,” CJ Gabbe and Gregory Pierce write in Chapter 11. This is true even though many of these renters don’t own cars, and many of these spaces go unused.
A study in San Francisco showed that off-street parking requirements make housing more expensive. Having off-street parking raised the average household income needed to qualify for a mortgage to $76,000, from $67,000. “If the parking requirements had not existed, 26,800 additional households could have afforded condominiums,” report Bill Chapin, Wenyu Jia, and Martin Wachs. Parking reform downtown and in several adjacent neighborhoods allowed for development with 60 percent less parking and a 30 percent reduction in the construction cost of dwelling units—“enough to allow for market-rate housing that is more in line with the typical San Francisco household’s income.”
As of 2009, the average value of a motor vehicle was $5,200. Yet the average cost of an underground parking space is $34,000, and the average cost of an aboveground garage is $24,000 per space. “One space in a parking structure … costs at least three times the net worth of more than half the African-American and Hispanic households in the country,” Shoup points out.
Parking requirements play a part in determining what kind of housing is built and discouraging the “missing middle,” according to researchers. “Because parking can consume so much space and money, parking requirements needlessly reduce variety in the type and location of housing available,” notes Michael Manville.
Policies to promote off-street parking reduced the economic development in cities studied by Chris McCahill, Norman Garrick, and Carol Atkinson-Palombo. “For the six cities we considered, each parking space added since 1960 reduces potential property tax revenues by between $500 and $1,000 per year,” they write. Parking is both a cause and effect of driving, “yet the changes in commuting behavior in cities that added more parking suggest that more parking increases driving.”
Parking is expensive. In a functioning free market, automobile owners would be willing to pay for some of that parking, just as they pay for gasoline, auto insurance, tolls, and other mobility-related costs. But the practice of mandating parking is absurd. If motorists paid the full cost of parking their vehicles, people would own fewer cars, drive less, and choose more shared-ridership transportation modes.
Alas, Virginia’s transportation system, like that of every other state, is so permeated with subsidies, cross subsidies, and subsidies to counter other subsidies, that rational economic decision making is impossible. Political decisions to support “mass transit” or “road building” are driven by ideological, partisan and special-interest considerations. The scale of the misallocation of resources is mind-numbing.
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