Streetsblog Capitol Hill

There are plenty of hidden costs to auto-oriented development: increased levels of air and water pollution, safety risks posed to pedestrians and cyclists. But as Strong Towns Blog points out, some costs are hardly hidden at all.

The authors of the comprehensive plan for Brainerd, Minnesota (pop: 13,590) probably thought they had a great idea: Take the properties along busy Highway 210 in the east part of town, an assortment of run-down or vacant storefronts, and encourage their replacement by “highway-oriented businesses.” The plan bases this strategy on the idea that “having a strong highway commercial area… provides for a healthy downtown.”

“The problem,” writes Charles Marohn of Strong Towns, “is that ‘strong’ and ‘highway commercial’ are – in almost all cases – mutually exclusive terms.” Furthermore, the “fast food restaurants, convenience stores, gas stations and other auto-oriented businesses“ promoted by the comprehensive plan are actually worth less to the city than the marginal establishments that are there already.

Marohn compares the “old and blighted” development on one block — the kind of development the town would like to get rid of — to the “shiny and new” development down the street, a fast food joint with lots of surface parking:

The eleven old and blighted lots [above left] — some of the most undesirable commercial property in the city — arranged in the traditional development pattern along the incompatible, major arterial of Highway 210 have a combined tax base of $1,136,500.

To compare, the Taco John’s property [above right] — the one that is not only shiny and new but configured precisely as the city of Brainerd desires the old and blighted properties to someday be — has a total valuation of only $803,200.

At its nastiest and most decrepit, fighting the negative auto traffic speeding by and the absence of pedestrian connectivity, lacking all natural advantage from the neighboring land uses that would ideally accompany a traditional neighborhood design, the old and blighted traditional commercial block still outperforms the new, auto-oriented development by 41%. [emphasis his]

The city is shrinking its own tax base by encouraging businesses to turn their backs on traditional Main Streets in favor of busy arterial highways. A cheaper way to maximize these parcels’ value, according to Marohn, would be to restore connectivity to the nearby residential area.

“That strip mall just got rezoned for high rise buildings.” “These auto dealerships are going to disappear.”

Those aren’t words you hear very often in suburbia, but if you’re hanging out in Tysons Corner, Virginia, you’d better get used to it. This office enclave, which sits dead center between Washington, DC and Dulles International Airport, is experiencing a rare and dramatic transformation – from traffic-choked “edge city” to walkable urban center.

Fifty years ago this area was dairy farms. But fueled by employment at the headquarters of several major defense contractors, Tysons is now the 12th biggest business district in the country, and the single biggest outside a major city. Even during the recession, office vacancy has stayed comparatively low at 14 percent.

Tysons is also a retail heavyweight, with the fifth biggest shopping mall in the U.S. And no wonder – it sits in Fairfax County, consistently ranked one of the wealthiest in the country.

But even with all these jobs and shopping opportunities, it lacks people. There are 105,000 jobs in Tysons but only 17,000 residents. Nobody lives there.

Almost four years ago, Time gave Tysons this back-handed compliment: “That it is also a strip-malled, traffic-clogged mess does not take away from the fact that it is one of the great economic success stories of our time.”

All of this presents a unique opportunity for planners. How do you take an existing business district — dysfunctional but also thriving in its own way — and re-fashion it into a real urban center? And how do you get community support for a project that’s going to mean decades of disruptive construction and the uprooting of much existing infrastructure?

Fairfax County planner Tracy Strunk admits that re-planning something this big is incredibly ambitious. While they looked to development along the much-lauded Rosslyn-Ballston metro corridor for inspiration, “You get a few blocks from Rosslyn station and you’re in single-family detached. This isn’t going to be single-family detached.”

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If you drive to work, you can get a $230 monthly parking benefit, subsidized by the federal government and paid through your employer. If you take transit, right now you can get up to $230 per month, but the cap may revert to $120 when the current transit benefit law expires this fall. And if you ride a bike? If your employer can even figure out how the bike benefit works, you get twenty bucks. Don’t spend that all in one place, kiddo. (Full disclosure: even Streetsblog hasn’t worked through the confusing bureaucracy enough to give its bike-commuting staff this benefit.)

The privileged position of cars in the employer-benefits paradigm could soon change. As Rep. Jim Moran (D-VA) said today, “We need to take away subsidies that incentivize people to do just the opposite of what we ought to be doing.” As a congressman representing the second most congested part of the country, Moran said it was “stunning” that the tax code “is designed to subsidize congestion.”

Moran is a co-sponsor of Rep. Earl Blumenauer’s (D-OR) Commuter Relief Act, introduced today as a way to bring some equity to different transportation modes. Why should drivers get up to $230 a month to foster oil dependency, greenhouse gas emissions, and congestion when everyone else gets so much less?

Blumenauer’s proposal contains a menu of options that lawmakers can choose among – or they can choose all of them. They are:

• Transit equity: sets the cap for all transportation benefits at $200 a month – parking and transit.
• Self-employed extension of transportation benefits: gives self-employed workers transit benefits for their work travel.
• Parking cash-out: requires employers who offer a parking benefit to also offer the option to take cash instead (reducing the incentive to drive).
• Van-pool credit: creates a 10 percent tax credit for spending on vanpool services.
• Bike benefit: raises the cap for the bike benefit from $20 to $40 and makes the procedures easier for employers. It also allows commuters to combine the bike benefit with transit or parking benefits, which they’re now not allowed to do.

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Flashback to Europe, sixty years ago. Only still emerging from the ruin of total war, the continent was in the midst of a nearly unprecedented reconstruction. Over the next decade, however, industry finally was able to turn toward consumer products, from stockings to refrigerators and, of course, the automobile. Italians owned only 342,000 cars in 1950, but ten years later that number had increased to two million, according to historian Tony Judt. In France, the number of cars tripled over the decade.

With mass car-ownership fundamentally new for Europe, parking policy was practically non-existent. The first parking meter — an American invention — only made it to Europe in 1958, arriving in front of the American embassy in London. In most places, cars could park not only for free but wherever they wanted: on the sidewalk, in a public square.

When they realized that simply giving drivers free rein to park anywhere was untenable, Europeans attempted to build enough parking to meet the population’s galloping demand. Public space, from sidewalks to canals, was turned into parking space. Zoning forced all new development to use money and space for parking. All these concessions, however, only made European cities friendlier to cars and further drove up demand.

Today, however, all that is in the past. As outlined in the new report from the Institute for Transportation and Development Policy, “Europe’s Parking U-Turn: From Accommodation to Regulation,” the continent is now leading the world when it comes to innovative, intelligent and sustainable parking policy [PDF].

Across Europe, cities have come to understand that oversupply or subsidy of parking leads to too much driving. The effect is considerable. In Vienna, for example, when the city began to charge for on-street parking, the number of vehicle kilometers traveled plummeted from 10 million annually to 3 million. In Munich, the introduction of a new parking management system has resulted in 1,700 fewer automobiles owned in the city center each year since 2000.

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Streetsblog is pleased to present the third episode in UCLA planning professor Donald Shoup’s ongoing inquiry into whether the Cato Institute’s free market principles extend to the realm of parking policy. Read Shoup’s previous replies to Cato senior fellow Randal O’Toole here and here.

Dear Randal,

In your September 1 post on Cato@Liberty, you mentioned that the Cato Institute offers free parking to its employees.

I checked and found that not all employers in Cato’s neighborhood offer free parking. For example, consider National Public Radio, which is on Massachusetts Avenue three blocks from Cato. NPR charges all its employees the market rate for parking in the building. NPR has 125 parking spaces and it uses fair market prices to ration these scarce spaces among its 400 employees.

The different parking practices at NPR and Cato reveal quite different policy preferences. NPR prefers the free market while Cato prefers free parking.

Cato’s free parking severely distorts transportation prices. The market price of commuter parking in the commercial garage closest to Cato is $255 a month, so Cato’s free parking subsidizes the cost of driving to work by $255 a month. Because employer-paid parking is a tax-exempt fringe benefit, Cato pays the free parkers a tax-exempt subsidy of $3,060 a year ($255 x 12).

If the round-trip commute distance to Cato is 32 miles (the national average), and if commuters drive to work 22 days a month, Cato’s free parking reduces the cost of driving to work by 36¢ a mile ($255/22 days/32 miles). According to the American Automobile Association, the average operating cost of driving a car is about 18¢ a mile. Because the per-mile subsidy for parking is twice the per-mile cost of driving, Cato’s free parking reduces the out-of-pocket cost of driving to work by two-thirds. Free parking therefore grossly distorts market prices in favor of commuting by car.

In your campaign for market policies in transportation, I hope you will try to persuade the Cato Institute to charge market prices for parking, or at least to offer commuters the option to cash out their parking subsidies. Perhaps you might also write a post on Cato@Liberty about Congressman Earl Blumenauer’s bill (H.R. 3271) that would encourage many employers to offer parking cash out. I suspect that might even make the news on All Things Considered.

Donald Shoup
Department of Urban Planning
University of California, Los Angeles

Last week we published a reply from UCLA planning professor Donald Shoup to Cato Institute senior fellow Randal O’Toole, in which Shoup clarified his positions on parking policy and explained several ways in which government regulations favor the provision of free parking. In response, O’Toole ran this post on the Cato@Liberty blog. Streetsblog is pleased to publish Shoup’s follow-up, which suggests Cato estimate the price distortions that give incentives for the libertarian think tank’s employees to commute by car. By doing so, Cato headquarters could serve as a laboratory for leveling the commute subsidy playing field, an idea embedded in Oregon Congressman Earl Blumenauer’s Green Routes to Work Act.

Dear Randal,

Thanks for your Cato@Liberty post clarifying several points where we agree about parking policies.

You wrote that the Cato Institute offers free parking to its employees. The market price of commuter parking in the commercial garage closest to the Cato Institute is $255 a month (in Colonial Parking at 901 New York Avenue). At this market price, can you calculate the total market value of all the free parking Cato provides to its automobile commuters?

After examining the data, you may find the market value of the Cato Institute’s free parking is surprisingly high. My rough guess is at least $10,000 a month. That is one example of what I mean by the high cost of free parking.

But maybe I am wrong. I hope the Cato Institute will tell you the number of commuters who park free so that you can answer this simple question. What is the fair market value of all the free parking for commuters who drive to the Cato Institute?

My point is not to criticize the Cato Institute for its free parking, because 95 percent of all automobile commuters park free at work in the United States. My point is that you could do a great service to free-market transportation policy by using the Cato Institute as a case study to analyze how employer-paid parking distorts commuter transportation choices.

Valued at market prices, free parking at the Cato Institute reduces the cost of driving to work by $255 a month. If commuters drive the national average round-trip distance of 32 miles a day for 22 days a month, free parking thus reduces the cost of driving to work by 36¢ per mile ($255/22 days/32 miles). According to the AAA, the average operating cost of a car is about 18¢ per mile. Because the parking subsidy at work is twice the operating cost of driving to work, free parking at Cato reduces the out-of-pocket costs of driving to work by two-thirds. Free parking is therefore a huge price distortion in favor of commuting by car.

The Internal Revenue Code creates an incentive for this price distortion because free parking at work is exempt from both income and payroll taxes. Parking cash out can eliminate this price distortion. Parking cash out is a market-oriented policy whereby employers who offer free parking at work also offer commuters the option to choose its cash value in lieu a parking space. Parking cash out does not mandate parking charges because commuters who choose to drive can still park free. Parking cash out simply gives the same subsidy to every commuter, regardless of travel mode choice, while free parking gives a subsidy to drivers and nothing to other commuters. Parking cash out expands choice, which I assume is a core value of the Cato Institute.

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We’re reprinting this reply [PDF] from UCLA professor Donald Shoup, author of the High Cost of Free Parking, to Randal O’Toole, the libertarian Cato Institute senior fellow who refuses to acknowledge the role of massive government intervention in the market for parking, and the effect this has had on America’s car dependence. It’s an excellent guide to the misdirection, mistakes, logical fallacies, and falsehoods that form the foundation of O’Toole’s arguments.

Dear Randal,

I would like to comment on your August 16 post on the Cato@Liberty blog about “Free Markets for Free Parking.”

You were responding to Tyler Cowen’s article in the New York Times, “Free Parking Comes at a Price,” in which Tyler explained some of the ideas in my book, The High Cost of Free Parking.

In commenting on Tyler’s article, you made several mistakes in describing my ideas and proposals. I will explain these mistakes, and if you agree with the explanations I hope you will post corrections on Cato@Liberty.

Before I examine your misunderstanding of what I have written, I will first summarize the three basic parking reforms I recommend in The High Cost of Free Parking: (1) remove off-street parking requirements, (2) charge market prices for on-street parking to achieve about an 85-percent occupancy rate for curb spaces, and (3) return the resulting revenue to pay for public improvements in the metered neighborhoods.

I will quote ten extracts from your post, and comment on each of them.

1.

"Shoup’s work is biased by his residency in Los Angeles, the nation’s densest urban area. One way L.A. copes with that density is by requiring builders of offices, shopping malls, and multi-family residences to provide parking. Shoup assumes that every municipality in the country has such parking requirements, even though many do not."

Does the Antiplanner, who is “dedicated to the sunset of government planning,” really believe that government planners know exactly how many parking spaces to require for every economic activity at every site in every city?

Even Houston, which does not have zoning, has minimum parking requirements, and they resemble the parking requirements in almost every other city in the United States. Houston requires 1.25 parking spaces for each efficiency apartment in an apartment house, for example, and 1.333 parking spaces for each one-bedroom apartment. Here is the link to the minimum parking requirements in Houston’s municipal code.

Does the Antiplanner, who is “dedicated to the sunset of government planning,” really believe that government planners know exactly how many parking spaces to require for every economic activity at every site in every city, no matter how much the required parking spaces may cost and no matter how little drivers may be willing to pay to use them? Does the Antiplanner really support Houston’s minimum parking requirement of 1.333 spaces for each one-bedroom apartment because he believes that Houston’s government planners can accurately predict the “need” for parking at every apartment to one-thousandth of a parking space?

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The House has just begun voting on the Senate jobs bill, which includes a $20 billion reprieve for the nation's highway trust fund and an highway expansion of Build America Bonds -- but though the legislation is expected to pass, it won't be headed to the president's desk yet.

Bowing to concerns from two blocs of Democrats, House leaders made two minor changes to the jobs bill. The first modification assuages fiscal hawks by fully offsetting the cost of the bill, The Hill reports, while the House's second tweak answers concerns from the Congressional Black Caucus by requiring that at least 10 percent of the legislation's transportation spending goes to minority-owned or disadvantaged businesses.

House leaders did not fix the provision contested by the House transport committee that would award nearly 60 percent of $932 million in grants to four states while excluding 22 other states. The transport panel's chairman, Jim Oberstar (D-MN), has secured written support from Senate leaders to unwind that language in a future bill.

Practically speaking, the House's changes mean that the Senate would need to hold another vote before the jobs bill can become law.

Rep. Pete DeFazio (D-OR), Oberstar's top lieutenant, made the case for the bill on the House floor. In addition to extending the 2005 transportation law until the end of the year, DeFazio observed, the jobs bill would allow the highway trust fund to begin collecting interest payments after 10 years of forgoing them to the Treasury.

"We're now going to reclaim that money ... it's going to be a billion dollars a month," he said.

Republicans, led by Rep. Steven LaTourette (OH), countered that the jobs bill's $13 billion in tax credits for new hires would be better used to pay for more infrastructure investment.

Late Update: The House cleared the bill on a 217-201 vote.

If you haven't checked out the ITDP parking report we covered yesterday, it's a highly readable piece of research, walking you through parking policy's checkered past and potentially brighter future.

In addition to describing six cases of innovative parking strategies, the authors draw from a wide-ranging body of evidence about the woeful state of most current parking policy, marshaling revealing facts and figures. We culled some of the ones that leap out the most. Enjoy:

• Ninety-nine percent of U.S. car trips begin and end in a free parking space.
• The average automobile is parked 95 percent of the time.
• Although many businesses today believe they benefit from free parking, curbside parking meters were actually introduced in 1935 by an Oklahoma City department store owner. He wanted to increase parking turnover so that there would always be spaces available for his customers.
• Conventional parking policy counsels providing enough spots to handle car storage on the 30th busiest hour of the entire year, usually the weekend before Christmas. That means intentionally planning for an oversupply of parking the other 8,730 hours of the year.
• At free parking spaces, 40 to 60 percent of vehicles overstay posted time limits.
• Parking typically represents a full 10 percent of development costs. What's more, the people who actually park only pay 5 percent of the cost of non-residential parking, meaning that public subsidies and developer capital pay for the rest.
• In San Francisco, parking requirements have reduced the number of affordable housing units nonprofit developers can build by 20 percent, with each residence costing 20 percent more to build than it would have without parking.
• Seventy percent of Southern California suburban office developments built exactly the number of parking spaces required by law, suggesting that parking minimums are forcing developers to build more parking than they want to.
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The high-water mark for American parking policy came in the early 1970s, when cities including New York, Boston, and Portland set limits on off-street parking in their downtowns. They were compelled to do so by lawsuits brought under the Clean Air Act, which used the lever of parking policy to curb traffic and reduce pollution from auto emissions. This level of innovation went unmatched over the ensuing three-and-a-half decades. Only now are U.S. cities implementing effective new parking strategies that cut down on traffic.

A report released today by the Institute for Transportation and Development Policy [PDF] highlights the new wave of parking policy innovation that could pay huge dividends for sustainable transport and livable streets. If your city aspires to make streets safe, improve the quality of transit, and foster bicycling, then your city needs a coherent parking policy.

"There was a 35-year parking coma during which the federal government, cities, and environmentalists forgot why parking was important," said John Kaehny, who co-authored the report with Matthew Rufo and UPenn professor Rachel Weinberger. "This study shows people are starting to wake up and understand that parking is one of the most important influences on how cities work and what form of travel people choose to use."

The early 70s parking limits beat back the cycle of more car storage, wider roadways, and greater sprawl that decimates urban areas. The underlying idea was simple: Manage the supply of parking, and you can reduce the demand for driving. Yet in America this notion has gone largely unheeded, even in cities.

Instead, the authors note, parking policy is typically divorced from transportation policy and goals like reducing congestion or encouraging walking and biking. In most of our urban areas, planners determine parking volumes using suburban standards, drawing heavily on ill-suited recommendations in "Parking Generation," a manual published by the Institute for Transportation Engineers. The product is abundant, cheap parking -- much of which sits unused most of the time.

Fully 99 percent of car trips in America end in free parking, an incentive that crowds out all other modes of transportation. "Even when the price of parking is free," said Weinberger, "it’s far from free."

The resulting congestion impedes the effectiveness of transit. Traffic volumes and double-parking make bicycling less pleasant and more dangerous. Walkable environments give way to curb cuts, dead walls, and land-devouring parking facilities that spread destinations farther apart. The whole vicious cycle is heavily subsidized, with the cost of parking absorbed into the price of everything from housing to movie tickets.

"In a time of economic distress, we can’t afford to continue these policies,"  said ITDP's Michael Replogle. "Continuing to subsidize parking is very costly for all of us."

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