Neighborhood Parking


In some neighborhoods it is hard to find a parking spot. Currently, the city deals with this problem in two ways:

  1. Minimum parking requirements, which force developers to include free parking spaces when they build new structures.
  2. The Residential Parking Permit Program.

Both of these methods have flaws. Minimum parking requirements help with parking locally, but increase traffic and raise the cost of living throughout the city. The Residential Parking Permit Program only applies on weekdays, inconveniences guests, and does not guarantee spaces for residents. I propose an alternative approach below. It would not eliminate the Residential Parking Program, but it would give residents a new option.

The city should allow residents to request a Neighborhood Parking District. Inside the district, half of the on-street spaces would be free for everyone to use, and the other half would be permit-only. When the city creates the district, it would distribute permits to nearby property owners.

Example of a neighborhood parking permit

The Need

When parking is abundant, free spaces are efficient.

In places where it is easy to park, the city should give away spots for free. If it did not, and instead required permits, fewer drivers would be able to park, and open parking spots would be wasted. Also, people would have to go through the hassle of buying a permit for no reason.

When parking is scarce, permit-only spaces are efficient.

When there are more drivers than open parking spots, the city should not give away spots for free. When it does, only lucky people who happen to find spaces can park. This is a wasteful, because some people need parking spots more than others. Instead, the people who badly need to park should be able to take the available spots, and then compensate the people who barely need them.

For example, suppose shoppers are willing to pay $1 to use the spaces in front of the Peoples Food Co-op for fifteen minutes. Another group of residents is willing to pay $1 a day to store their cars all day in the same spaces. It would be wasteful to give away the spots for free, because many spaces would go to the people storing cars, rather than the people shopping. Both groups would benefit if the city charged the shoppers for parking, and then distributed the revenue to all residents.

In the downtown, the city has almost achieved this solution. It charges for parking, and then using the revenue to fund city services. In my opinion the city could do a much better job of using this revenue, but even so, parking meters benefit the downtown. They make it easier for drivers to find spots when they really need them, and they provide funding for road repairs and other services.  They also decrease traffic by making it easier to find spaces. A study from UCLA suggests that 30% of traffic in cities is caused by people looking for parking spaces.

However, in some places with scarce parking, meters are impractical. If people want to park for many hours every day, it is annoying for them to feed meters constantly. Also, in residential areas, homeowners often oppose meters because they find them ugly and intrusive. In these places, the city could avoid the problems of scarce parking by requiring monthly parking permits.

In areas where parking is sometimes scarce, a mixture of free and permit-only spaces is efficient.

In many areas, parking is sometimes scarce and sometimes abundant, depending on the time of day and time of year. In these places, free parking and permit parking both have flaws. A mixture of the two is probably best.

Imagine an area near the University where parking is free on one side of the street, but permit-only on the other. At night or in the Summer, when few people need parking, free spots are available. In the Fall during business hours,  when parking is scarce, people who badly need a spot can get it by purchasing a permit. There is still some waste, but two of the most frustrating parking situations are eliminated:

  1. There are never full streets where it is impossible to get a space at any price.
  2. There are never empty streets where parking is permit-only.

How Parking Districts Would Work

Residents are in the best position to know whether parking is scarce in their neighborhood. The city should use this knowledge to install permit-only spaces where they are needed. To do this, the city should let residents petition the city for a Neighborhood Parking District, where half the spots are free and half require permits.

If residents from 60% of nearby households signed a petition for a district, the city would install one. The city already uses a similar petition for the residential parking permit program. City staff could determine how to divide the free spots from the permit-only spots. In many areas the simplest strategy would be to make one side of the street permit only, and the other side free.

The city should distribute permits to property owners in the district.

When a neighborhood parking district is established, the city should mail permits to property owners within the district. A simple formula could determine the number of permits sent to each property. For example:

(total spaces in district ÷ 2)  ÷ (total properties in district).

If this formula worked out to fewer than one permit per property, the city should still give one permit to each property owner. In this case, there may not always be a spot available for every permit holder, but parking would still be much easier than without permits.

There are two benefits to giving permits to nearby property owners:

Giving permits to nearby property owners minimizes transaction costs.

The city should give permits to the people who need them the most, so that fewer people have to buy and sell permits. Nearby residents probably need permits the most, because many of their vehicle trips end near their homes.

Giving permits to nearby property owners reduces pressure for minimum parking requirements.

From my experience going door to door, it is clear that most Ann Arbor voters are homeowners. There is a tendency for homeowners to care more about the long term future of their immediate surroundings than other groups, because they are financially and emotionally invested in their houses. This implies that homeowners are the most likely to push for local parking minimums. When developers seek permission to build new structures, nearby homeowners sometimes ask city council to change the zoning code to require more parking spaces per dwelling. These parking minimums are harmful for many reasons.

If the city made it easy for homeowners to park, they would be less likely to support minimum parking requirements. In fact, homeowners might appreciate new residents’ demand for parking, as it would raise the value of their permits.

Permits should be permanent and transferable.

The city could allow people to sell their permit by making permits transferable, rather than tied to a specific car. The city should allow sales, so that permits eventually get to the people who need them the most. Transferable permits would make it easy for residents to loan their permits to house guests or move them to new cars.

An online registry would prevent fraud.

Residents would get their permits in the mail, and then activate them by going to a city website, where they would register their permits to their name and address. That way, if a permit is lost or stolen, the city could cancel the permit number and issue a new one.

If someone bought a permit, they would have the option of going to the city’s online registration and updating the information there. That way, if the permit was lost or stolen, the city could give a new one to the buyer, rather than to the previous registered owner.

The Alternatives

Minimum parking requirements do more harm than good.

Parking requirements force developers to include some number of parking spaces when they build new structures. At first glance, this seems reasonable. If a new apartment building would bring more drivers to the area, shouldn’t the builder be responsible for providing parking? Without these rules, wouldn’t new residents flood the on-street parking system?

A closer look shows that the situation is more complicated. Parking requirements do make it easier to park, but this convenience comes at a great cost:

  1. More parking encourages more people to drive, which increases traffic congestion and pollution. When the city uses parking minimums to preserve a common good (on street parking), it damages an even more important public good (uncongested roadways).
  2. Land must be used for parking lots, which reduces the amount of space available for other uses. This raises the cost of housing and commercial space.

For these reasons, many other cities are scaling back their parking requirements. Buffalo, New York may soon eliminate them entirely

The most famous researcher of minimum parking requirements is Donald Shoup. His book is called the High Cost of Free Parking. A Vox interview provides a good summary of his ideas. Below are some details about why parking minimums are harmful.

They are bad for business.

Parking minimums decrease the total amount of wealth in the city by forcing property owners to use land for relatively unprofitable uses. For example, imagine a property owner who owns a single apartment. The owner is considering whether to expand the apartment into a duplex by building on top of two parking spaces that currently serve the single apartment.

In an open parking market, the property owner would expand the apartment, unless the parking spaces were so valuable that it wasn’t worth it to build over them. It would be in the owner’s self interest to create as much value as possible. If the city interfered and required two spaces (as it does now), the duplex would not be built. This kind of interference lowers the total amount of wealth created in the city.

They raise the cost of living.

If property owners are forced to provide more parking, there is less space available for housing and stores. This raises the price of buildable land, which raises rents. This is clearly bad for tenants, but it is also bad for property owners. While property owners get more rent for each structure they own, their land cannot be used for as many structures, which lowers its value. I explain this argument here.

They damage the environment.

  1. Parking minimums make it easier to find free parking spaces, which encourages people to drive. More people driving causes traffic congestion and air pollution.
  2. They  limit the number of dwelling that can be built on a single lot. This discourages developers from building smaller homes, which use less energy than large homes, or apartments, which use less energy than both.
  3. This decreases the amount of housing and commercial space that can fit within the city limits, which encourages outward expansion into fields and forests. Parking lots also spread apart destinations, which makes it harder to walk, which further encourages driving.

The Residential Parking Program has limitations.

The RPP program has several drawbacks:

  1. It does not apply on weekends or at night. In some areas, such as near the Argo Cascades, weekends are when parking is most scarce.
  2. It does not limit the number of permits given. This means that residents cannot be sure that there will always be spaces available. This scarcity encourages residents to push for minimum parking requirements.
  3. All spaces usually have a two-hour time limit. These limits are inconvenient for guests and difficult to enforce. Some people just move their car every few hours.
  4. Permits are not transferable. This prevents mutually beneficial exchanges between residents and people who need to park in the area.

Neighborhood Parking Districts have few risks.

One possible problem with Neighborhood Parking Districts is that some residents might request a district even when there is abundant parking and a district is not necessary. However, I doubt this would be a problem for three reasons:

  1. Many people tolerate guests parking in their neighborhood, and would not sign a petition to exclude them unless parking was scarce.
  2. Permit parking would be a slight inconvenience even to the residents who get permits because they would have to move permits between cars and loan them to house guests. Even selfish residents would probably not support a parking district if it wasn’t needed.
  3. Even if residents establish a parking district unnecessarily, half of the spots would remain free which would limit the harm.