THE HIGH COST OF FREE PARKING

Donald Shoup

VEHICLE OWNERSHIP RATES:THE UNITED STATES FROM 1900 TO 1996 AND 15 OTHER COUNTRIES IN 1996

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

750

800

YEAR

MO

TO

R V

EH

ICL

ES

PE

R 1

,000

PE

RSO

NS

Vehicle ownership rates in 15 countries in 1996(Each country is placed beside the year in which the US

had the same ownership rate.)

China (9)

Mexico (125)

Japan (547) France (526)

Spain (457)

United Kingdom (486)

Denmark (397)

Ireland (343)

Greece (310)

Israel (266)

Argentina (170)

Vehicle ownership rates in the United States from 1900 to 1996

Russia (80)

1990

1985

1980

1975

1965

1960

1955

1950

1945

1940

19351930

1925

1920

1915

1996

South Korea (208)

Australia (583)

1970

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

(Motor vehicles per 1,000 persons)

All transportation systems have three basic elements:

Vehicles Rights of way Terminal capacity

Trains Train tracks Train stations

Airplanes Sky Airports

Ships Oceans Seaports

Cars Roads Parking spaces

Automobile travel is unusual in two ways:

• It requires enormous terminal capacity (several parking spaces per car).

• The cost of parking has been shifted out of the transportation sector and into the prices for everything else. Drivers park free for 99 percent of automobile trips in the US.

Who pays for free parking?

Everyone but the motorist.

TABLE 7-4

ANNUAL CAPITAL AND OPERATING COSTOF PARKING AND ROADS

($billions per year in 1990-1991)HighLow

$162$49Bundled non-residential parking

$41$15Bundled residential parking

$20$12Municipal and institutional parking

$3$3Priced parking

$226$79Total cost of parking

$223$76Total parking subsidy

1%4%Priced parking as % of total parking

$177$98Total cost of roads

128%81%Parking cost as % of road costSource (Delucchi 1997, Tables 1-5, 1-6, and 1-7)

In 2002, the total subsidy for off-street parking was between $135 billion and

$386 billion.

In 2002, the federal government spent $231 billion for Medicare, and

$349 billion for national defense.

Results of changing the price of off-street parking

Employer-Paid Parking• 95% of all automobile commuters park free at work• 91% of all commuters drive to work• 91% of commuters’ cars have one occupant• Most commuters park free regardless of

– age– gender– income– education– residence

• 85 million free parking spaces at work in 1994• Parking subsidy for commuters was $36 billion a year

Employer-Paid Parking:A Matching Grant

• Employers pay for parking at work if the employee is willing to pay for driving to work

• Commuters who do not drive to work do not get a subsidy

• Employer-paid parking encourages solo driving

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%S

olo

dri

ver

sh

are

Driver-paid parkingEmployer-paid parking

42%

67%

Free parking increases solo driving by 60%

Parking Prices Affect Mode ChoicesFor Commuters to Downtown Los Angeles

0%

10%

20%

30%

40%

50%

60%

70%

80%

Co

mm

ute

r m

od

e s

hare

$0 $1 $2 $3 $4 $5 $6Price of parking at work ($/day)

Drive solo

Transit

Carpool

Source: Estimated from Willson (1991)

California’s Parking Cash Out Law

• Employers must provide a cash allowance to an employee equivalent to any parking subsidy offered

• The requirement applies to:– Firms with 50 or more employees

– Only for leased parking spaces

0%

20%

40%

60%

80%

100%

Com

mute

r m

ode s

hare

Solo Driver Carpool Transit Walk BicycleCommuter mode choice

Before cash outAfter cash out

76%

23%

14%

63%

6%.9%.8%2%

9%3%

Commuter Mode Share Before and After Parking Cash Out

Results

• Parking cash out reduced the number of cars driven to work by 11%

• After parking cash out, employees– traveled 652 fewer vehicle miles per year

– consumed fewer 26 gallons of fuel per year

Results of increasing the price of curb parking

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

$10

$11

$12

$13

$14

$15 P

rice o

f o

ff-s

treet

park

ing

($

/ho

ur)

$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 Price of curb parking ($/hour)

FIGURE 13-2PRICES OF CURB AND OFF-STREET PARKING(for parking one hour at noon at city hall on a weekday)

Los Angeles

Buffalo, Philadelphia

Long Beach

San Francisco, Portland

Chicago

Pasadena, San Diego, Baltimore

Cambridge, Santa Monica

Santa Barbara

Palo Alto, Berkeley

New York City

Seattle

Boston

TABLE 11-4

SUMMARY OF RESEARCH ON CRUISING

AverageShare ofsearchtraffictimecruisingLocationYear

(minutes)(percent)19%Detroit (1)192734%Detroit (2)1927

17%New Haven1960

6.1London (1)19653.5London (2)19653.6London (3)1965

6.074%Freiburg1977

9.0Jerusalem1984

11.530%Cambridge1985

7.98%New York (1)199310.2New York (2)199313.9New York (3)1993

6.5San Francisco1997

6.5Sydney2001

7.730%Average

0

2

4

6

8

10

12

14

Park

-an

d-v

isit

tim

e (

min

ute

s)

Quadruple Double No changeCurb parking prices

Before After

4.4

8.1

5.1

9.8

12.7

Park-and-visit times before and after changing the price of curb parking in London

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2

4

6

8

10

12

14

Park

-an

d-v

isit

tim

es (

min

ute

s)

Searching Parking Walking TotalComponents of park-and-visit times

Before After

1.00.6 0.

6.0

2.9

12.7

4.4

Re

Park-and-visit times before and after parking prices were quadrupled

No meters Meters Prices quadrupled

The effects of parking prices on Grosvenor Square in London

Conclusion

• Parking is heavily subsidized. The annual subsidy for off-street parking may be about the size of the budget for national defense.

• Parking prices have a profound effect on travel choices. Parking subsidies substantially increase vehicle travel.