There's no such thing as a free carpark

Dr Eric Crampton
The Dominion Post
27 July, 2020

Free parking isn’t free. Whether it’s an unmetered on-street parking space, or a parking space that comes bundled with an apartment or house, or the off-street parking space in front of a shop that you’ve not had to pay to use, they all have a price. Council rules have just hidden the cost.

Last week, Parliament provided New Zealand with one of the more important bits of deregulation of the past decade, releasing the National Policy Statement on Urban Planning.

The NPS bans councils from imposing minimum parking restrictions and requires that they allow building to greater heights in places convenient to transport and other amenities.

Free parking isn’t free.

Council on-street parking has an obvious cost to councils in paving and maintenance. But it also has a few more hidden costs. 

The first is an opportunity cost: What else could have been done with that bit of land in front of a house or business if it were not a parking space? As the pandemic rages abroad, some cities have allowed restaurants and bars to turn empty parking spaces into safer outdoor dining areas.

But the more substantial cost of on-street parking, if council does not meter the spaces, is the congestion caused as people drive around looking for free parking. As Seinfeld’s George Costanza put it almost thirty years ago, “Why should I pay, when if I apply myself, maybe I could get it for free?”

That hunt for free parking imposes real costs. Economist Donald Shoup, who has spent the bulk of his long career tracing out the economics of urban parking, found that between 8 and 74 per cent of traffic in congested cities was caused by cruising for parking.

In New York, in the early 1990s, drivers spent between eight and 14 minutes, on average, cruising for parking.

If on-street parking is priced properly, there is no need to cruise for parking. High prices for on-street parking during peak times in popular places encourage people to only park in those places when it is really important, and encourage other people to build parking garages that charge for car storage.

But there is also a worse political economy effect of unpriced on-street parking. When on-street parking has no monetary cost for drivers in places where people want to be, there will always be shortages. Shortages lead councils to force other people to build more parking.

In Wellington, developers must provide at least one on-site car park per housing unit, as well as providing visitor car parks in larger developments.

If you own a piece of land and want to build a house on it, what business is it of council, or of anyone else, whether you do or do not put in a parking space? 

Similarly, the downtown developer with her own money on the line is likely to have a better sense than council does about whether potential downtown apartment buyers would rather have a parking spot, or a less expensive apartment, or other amenities instead of a car park.

In a lot of places, like windy and hilly Wellington suburbs, adding a parking space is incredibly costly and difficult because of the topography.

In other places, like parts of Auckland where bare land can cost over $2,000 per square meter, or even more than $10,000 per square meter, 20 square metres for a parking spot and access is not cheap.

Nobody forces anyone to use scarce space in their house to install a second bathroom if their family doesn’t need one; forcing people to put in a parking spot they do not want or need is similarly intrusive, costly, and pointless.

National MP Jacqui Dean warned that the measure was likely to increase congestion because fewer parking spaces would mean more hunting for parking. She was not wrong to worry about the high costs involved in the search for parking.

But in places like Wellington, where on-street parking is now metered and charged, that concern is misguided. Metering for parking spaces on the weekends put an end to hunting for a parking.

Rather than queueing like the would-be customers of old Soviet shops in hopes of a daily free ration of parking, those in need of a spot can pay for the spot in money rather than in time, congestion, and frustration.

If the rule change leads to fewer parking spaces, on-street parking prices should go up. If on-street parking prices go up, it may be worth it for a developer to put in a parking garage – so long as council has not put in maximum parking regulations.

Any future National-led government might consider adding a ban on those maximum parking regulations. Surely developers should be as free to cater to those wanting to keep a dozen cars as they now can to those preferring to be carless.

The National Policy Statement banning minimum parking regulations is a welcome step. 



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