There’s No Such Thing as a Free Parking Spot

Alberta, Commentary, Steve Lafleur, Transportation

A Calgary non-profit made headlines recently when it was revealed that the organization was required to build a parking lot for an affordable housing complex that is effectively empty. The housing is provided specifically for helping people transition from out of homelessness, as part of a “housing first” approach that has had considerable success in Calgary and around North America. Few, if any, inhabiting the 224 unit apartment complex own cars. Yet, the Mustard Seed was required to spend $3 million to build a parking garage to meet City parking requirements. All of the 79 stalls reportedly sit empty. That amounts to an additional $13,392 to provide each unit. One estimate suggests that they could earn $350,000 per year per year renting out the spots to non-Mustard Seed residents, which they could spend on programming to help the poor. However, the City’s Transportation Department pointed out that this is against City policy and would encourage traffic. This example illustrates the core problem with parking policy in Calgary – and most of North America.

Calgary has an erratic approach to parking. The City has systematically restricted parking in the central business district to the point where Calgary’s Downtown parking rates are tied with Midtown Manhattan for the highest in North America. That approach has been wrong-headed. By contrast, abundant “free” parking is the norm outside of the core. Immediately available unmetered parking has become such an expectation that there has been pushback against many projects that might reduce parking availability, including secondary suites. No one wins from this approach – not property owners, not the City, and not those who could use low cost housing.

Parking isn’t free. It costs money to build, and it occupies land that could otherwise be put to more valuable use. The opportunity cost of having a parking garage rather than, say, a condo building, can be immense. After all, parking spaces tend to yield less in property taxes. The costs of parking mandates are not only born by the City treasury, but also by residents. The Victoria Transport Policy Institute estimates that the average annual cost of an on-street parking space is $765 in suburban areas and $3268 in central business districts. That only accounts for the cost of the land, construction, and maintenance. It doesn’t factor in the value of alternative uses and lost tax revenue.

That isn’t to say that parking isn’t valuable. But so is food, and no one seriously thinks that grocery stores would work very well if they didn’t charge per item. People pay for “free” parking by having to drive around trying to find a spot, adding to traffic congestion. One study found that 30% of Downtown traffic in cities surveyed resulted from people cruising for parking. Either people pay for parking with their time (and other people’s time), or their money.

Calgary should heed the recommendations of economist and parking expert Donald Shoup. He provided two models for parking appropriate for different contexts. For commercial districts he recommends extensive metering where the prices are calibrated such that there is, on average, one open stall per block. He further recommends using that revenue for local improvements such as lighting and sidewalks. This is how the City of Pasadena, California solved its parking problem and beautified its Downtown in one fell swoop.

The second approach is for suburban neighbourhoods. Since people generally have an expectation of free parking in the suburbs, the City could issue a neighbourhood a set number of parking passes and allow them to auction off any unused spots. In the context of secondary suites, this means that the neighbourhood could either make money off of those residents, or keep the parking to themselves.

In addition to those two particular recommendations, the City should allow buildings to rent out excess parking spots. Moreover, residential buildings should not be forced to provide parking. The cost of building and maintaining parking spots is passed on to tenants who might not need parking. A combination of expanding metering to eliminate free parking in the core and eliminating parking requirements would allow the market to sort out how much parking is required. If people are willing to pay for it, the market will provide it.

Parking spots cost money. If it isn’t adequately priced, people won’t use it efficiently. This is why we price electricity, water, and gasoline. The same logic should apply to parking. There’s no such thing as a free parking spot.