On the heels of San Francisco’s new parking meters that automatically adjust parking rates based on up-to-the-minute market supply & demand, Tyler Cowen wrote a nice NYT piece on the problems with the fact that here in the US of A, Big Government regulations mandate that real estate developers create lots and lots of parking.
Many suburbanites take free parking for granted, whether it’s in the lot of a big-box store or at home in the driveway. Yet the presence of so many parking spaces is an artifact of regulation and serves as a powerful subsidy to cars and car trips. Legally mandated parking lowers the market price of parking spaces, often to zero. Zoning and development restrictions often require a large number of parking spaces attached to a store or a smaller number of spaces attached to a house or apartment block.If developers were allowed to face directly the high land costs of providing so much parking, the number of spaces would be a result of a careful economic calculation rather than a matter of satisfying a legal requirement. Parking would be scarcer, and more likely to have a price — or a higher one than it does now — and people would be more careful about when and where they drove.
The subsidies are largely invisible to drivers who park their cars — and thus free or cheap parking spaces feel like natural outcomes of the market, or perhaps even an entitlement….
if we’re going to wean ourselves away from excess use of fossil fuels, we need to remove current subsidies to energy-unfriendly ways of life.
The Economist’s Ryan Avent comments on the entertaining response to the piece by US libertarians, who like most Americans believe free/cheap parking is a God-given Right:
One of the results of the piece was a barrage of perplexing responses from people who normally agree with Tyler…One thing that surprises me is that libertarian economists wouldn’t immediately adopt the default assumption that mandated parking minimums are bad. What does it mean to be a libertarian if that’s not your default position? Ditto for below-market pricing of scarce resources. You’d expect progressive writers to make a strong case that goods a, b, and c should be affordable to everyone and government subsidized as a matter of basic decency. It’s bizarre that libertarians leap to this position when driving-oriented policies are up for discussion.
The best part of the dustup is where libertarians try to argue that inexpensive parking is one of those rare places where the government needs to step in to provide a “public good.” There’s only one tiny problem:
You’d think that libertarians making the public good argument would have no problem defending government provision of and subsidy for [mass] transit, but of course they don’t. They get around this by arguing that people want to drive and they don’t want to ride transit. This is strange in that in few other cases would a libertarian claim to know what markets want.
