A Free Market for Parking
I had an interesting conversation with someone last week about the free market as it relates to parking requirements. I was advocating for some additional review of applications in instances where, at least in my opinion, property owners were doing damage to the community by tearing down buildings to accommodate surface parking, especially when there was already (again, in my opinion) an excessive amount of parking.
The thrust of the counterpoint was that it should be left to an individual property owner, and the free market, to determine how much parking is needed. That was essentially the argument I made a year ago when I (successfully) advocated that my city remove parking minimums for schools. Ironically, the individual I was conversing with opposed that change. With my now calling for regulation and him for liberation from constraint, we seem to have exchanged viewpoints.
I’ve come to understand markets in the way I understand physics: the rules change based on the scale of the operation. There are a lot of things I am willing to consider at the local level that I would find absurd if attempted at the state, federal, or international level of organization. Within that larger context, I favor markets—as unencumbered as possible—because I think complex, adaptive systems need the feedback that markets provide if they are to grow strong.
What does a free market for parking actually look like, though? As a thought exercise, and as a public service for those struggling at the local level to identify the true marketplace for parking, here are some scenarios, on a scale of 10 to 1, starting from what I consider a Hayekian market for parking (10) and ending with the Marxist state approach (1).
10. (True free market) All streets are built and maintained by the private marketplace, which charges a market price for on-street parking. Privately-owned off-street parking then competes with privately-owned on-street parking, with everyone paying the market price for what they use.
9. A local shop owner purchases a commercial building. That local entrepreneur determines that their business would benefit from a couple off-street parking spaces. They take their own money and build that parking. Such action is not mandated by the city. The property owner does not receive any tax break—directly or indirectly—for the parking.
8. A private individual builds a parking ramp in a high-demand area and charges for its use.
7. Streets are publicly maintained with on-street parking subject to a market-clearing price that ensures, on average, one open spot on each block. The money collected by the city is kept out of the general fund and instead put back into the improvement and maintenance of the block on which it was collected.
6. The city builds parking but assesses the entire cost to property owners that experience an increase in value due to the project. The city then taxes enough annually to cover the ongoing maintenance and rehabilitation of the parking.
5. The Walmart corporation, using revenue from the sale of corporate bonds at interest rates suppressed by central bank policy, develops a big box store. The site includes hundreds of parking spaces. Even though the store is projected to be open for only 12 to 15 years, the city agrees to assume the long-term liability of indefinitely maintaining the millions of dollars of public infrastructure necessary to serve the site.
4. The city mandates that each individual home and business construct off-street parking in amounts beyond their own needs. The exact amount of parking required is arbitrary. The precise amount can be found in code books that provide no context, justification or straightforward means to appeal their applicability.
3. At the urging of local business owners, the city borrows money to construct a parking ramp. The city either does not charge for using the ramp or does not charge enough to cover the debt service, so they must levy a general tax on all taxpayers to cover the debt payments.
2. A public school district, working with $200+ million in voter-approved tax dollars, seeks to acquire private homes and businesses—some using the power of eminent domain—for the purpose of tearing them down and building off-street parking. (During the referendum process, the school district denied they had intentions to use taxpayer dollars for this purpose.)
1. (Marxist, collectivist approach) The city builds and maintains all on-street parking. The city also builds and maintains an excess capacity of off-street parking. There is no direct charge for using the parking, but everyone is taxed—according to their means—for its adequate provision. So that they can perform their duties, and in acknowledgement of the burden of leadership, public officials and community dignitaries get reserved parking spaces in premium locations.
The best thing we can do with parking is to reconcile our rhetoric with our reality.
Top image by Phillip Taylor through Creative Commons.
When the owners of Lawrence Hall bought the abandoned building, they had a vision of reviving it into a food hall that would support small businesses and help their community thrive. They never imagined that a few parking spots would put their dream on hold for seven years.