These radical ideas were put forth last week at a Law & Economics Association of New Zealand event. 

They may seem radical to the general public, but being thinkers at an economic think tank that advocates for market-based solutions, we found them hardly radical or surprising.   

What we did find surprising though was who was promoting them: a Green Party MP. It seems that the political spectrum is not so much a straight line but a loop. For some ideas, it's not a question of right wing or left wing, but a question of right or wrong. 

Julie Anne Genter is a proponent of a market-based solution for a problem that is a horribly inefficient waste of valuable land. It is uneconomic, it is anti-environmental, it is free parking. 

For the record, Genter isn't anti-cars per se. She isn't all about telling people not to drive. She's more about deregulating so that transport options are economically neutral, and letting the market (ie people) decide.    

So what are these regulations? In the 1950s as car ownership sky rocketed, so car owners demanded more parking. City authorities around the world did what they do best: they regulated, mandating a certain number of car parks per development. New Zealand was no exception. 

The problem is that while planners are good at working out capacity, they are terrible at managing demand. They based the required number of free car parks on peak demand, effectively assuming that every user, of say a movie theatre, wants to park at the same time. That's fine for a Saturday evening, but how about 8am on a Monday morning? 

As Genter explains "land use is the issue". Transport systems have three elements - vehicles, rights of way, and terminal capacity. A rail system, for example, has trains (vehicles), tracks (rights of way), and stations (terminal capacity). Car transport has cars, roads, and parking. 

Terminal capacity for car transport is land hungry, as Donald Shoup explains in his book The High Cost of Free Parking. 

Each car park includes room for manoeuvring the car in and out of the space, bringing the total space requirement for a car to 25 square metres. And here is a staggering fact: the land required to park cars is larger than the land required to transport them. 

As a result, in a typical New Zealand city, 25 per cent of urban space is taken up by car parking. That is concrete wasteland that otherwise could be put to more effective economic or social use (or dare I say it, maybe even both).   
   
It is not so much that high demand for car transportation eats up urban land space for car parks. It is more the other way around. If there are free car parks, it creates a market distortion, skewing the transportation choice towards the gas guzzler. 

And the free car parks are not really free at all, because the costs of that land use are hidden and passed on to everyone in one way or another. If you drive to the movie theatre and park for "free" the cost of parking is built into your movie ticket.    

Actually, the cost for all those empty car parks at the movie theatre car park at 8am on Monday and most of the rest of the week, are also built into your movie ticket. And if you choose to walk to the movie theatre, you too pay for those parks in your ticket. 

The consequence of council mandated minimum parking requirements is that it doesn't give people the choice to not pay for parking.   

As Shoup says "When the cost of parking is hidden in the price of other goods and services, no one can pay less for parking by using less of it".   

The distorted market increases traffic congestion and environmental costs, and few would argue that concrete spaghetti jungles are aesthetically pleasing. 

It stifles economic development, raising the cost for developers to provide "free" parks that are eventually passed on to the consumer in one way or another anyway. 

Auckland and Wellington have already ended mandatory free parking in the city centres. It's one of those magic ideas that seems to satisfy developers, economists, environmentalists, and the left and right alike. 

Source: There's no such thing as free parking