Hidden Costs of Free Parking

By Rachel Karitis

There’s no such thing as a free lunch. There’s also no such thing as free parking – a concept made famous in the urban planning world by UCLA scholar Donald Shoup, author of “The High Cost of Free Parking.”

Commercial real estate developers are likely familiar with the facts Shoup lays out: Free parking, because it is not paid for by the person driving the car, has to be accounted for somewhere else. This manifests itself first in the cost of development, then in the cost of goods and services offered at the building – so really, we’re all paying for parking, whether we realize it or not.

Minimum parking requirements dictate that anyone building a new project must also provide a minimum number of parking spaces, regardless of how many other nearby transit options exist. These municipal provisions were initially meantto ensure traffic to new developments would be able to compete with existing businesses without taking up their parking spaces.

But just how much do minimum parking requirements increase the development cost? Constructing above-ground parking spaces to comply with requirements in Los Angeles, for example, can increase the development cost of the office space by 27 percent, according to Shoup. Adding underground spaces can drive the price up even further – increasing it by 67 percent.

Another problem with these requirements is that they can encourage people to become more car-dependent, apparently justifying the creation of parking spaces in the first place. With disincentives for driving (such as a lack of free parking), however, more people may be apt to use available public transportation to get around.

Some cities have begun to change their tune on these requirements: Minneapolis, Seattle, Austin and Washington, D.C. to name a few. Unsurprisingly, you can also find these places at the top of any list of “smart cities” or cities with the best public transit. The two go hand in hand – cities focused on sustainability want to get people out of their cars and onto public transit.

One of the best things companies can do (other than building less parking if requirements allow) is to encourage the use of sustainable transportation options, changing attitudes and then behaviors. Before people are prepared to change the way they commute, they need to have information available to them about the choices they have.

This is where something like TransitScreen comes into play – placing screens in building lobbies with all nearby available transit options on display: rail, bus, bike-sharing, car-sharing, etc. Tools like this give people the nudge they need to act more sustainably and can reduce the demand for driving, which should then reduce the demand for free parking – which, as we know, isn’t free. We’re all paying for it.

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