THE HIGH COST OF

FREE PARKING
Donald Shoup
 VEHICLE OWNERSHIP RATES:THE UNITED STATES FROM 1900 TO 1996
AND 15 OTHER COUNTRIES IN 1996
(Motor vehicles per 1,000 persons)

800

1996
750 1990
Vehicle ownership rates in 15 countries in 1996
(Each country is placed beside the year in which the US 1985
had the same ownership rate.)
700
1980

650

1975
600
MOTOR VEHICLES PER 1,000 PERSONS Australia (583)

550 Japan (547)

France (526) 1970

500
United Kingdom (486)
1965
450 Spain (457)

1960
400 Denmark (397)
1955

350 Ireland (343)

1950
Greece (310)
300

Israel (266)
250 1940
1945
1930 1935
South Korea (208)
200
Argentina (170) 1925

150 Vehicle ownership rates in the United States from 1900 to 1996
Mexico (125)
100
1920
Russia (80)
50
China (9) 1915
0
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
YEAR
 All transportation systems have three basic elements:

Vehicles Rights of way Terminal capacity

Trains Train tracks Train stations

Airplanes Sky Airports
Ships Oceans Seaports
Cars Roads Parking spaces
Automobile travel is unusual in two ways:

• It requires enormous terminal capacity

(several parking spaces per car).

• The cost of parking has been shifted out of

the transportation sector and into the prices
for everything else. Drivers park free for 99
percent of automobile trips in the US.
Who pays for free parking?

Everyone but the motorist.

 TABLE 7-4
ANNUAL CAPITAL AND OPERATING COST
OF PARKING AND ROADS
($billions per year in 1990-1991)
Low High
Bundled non-residential parking $49 $162
Bundled residential parking $15 $41
Municipal and institutional parking $12 $20
Priced parking $3 $3
Total cost of parking $79 $226
Total parking subsidy $76 $223
Priced parking as % of total parking 4% 1%
Total cost of roads $98 $177
Parking cost as % of road cost 81% 128%
Source (Delucchi 1997, Tables 1-5, 1-6, and 1-7)
In 2002, the total subsidy for off-street
parking was between $135 billion and
$386 billion.

In 2002, the federal government

spent $231 billion for Medicare, and
$349 billion for national defense.
Results of changing the price of
off-street parking
 Employer-Paid Parking
• 95% of all automobile commuters park free at work
• 91% of all commuters drive to work
• 91% of commuters’ cars have one occupant
• Most commuters park free regardless of
– age
– gender
– income
– education
– residence
• 85 million free parking spaces at work in 1994
• Parking subsidy for commuters was $36 billion a year
 Employer-Paid Parking:
A Matching Grant
• Employers pay for parking at work if
the employee is willing to pay for
driving to work
• Commuters who do not drive to work
do not get a subsidy
• Employer-paid parking encourages
solo driving
 Free parking increases solo driving by 60%
100%
90%
80%
Solo driver share

70% 67%
60%
50% 42%
40%
30%
20%
10%
0%
Driver-paid parking Employer-paid parking
 Parking Prices Affect Mode Choices
For Commuters to Downtown Los Angeles

80%

70%

60%
Commuter mode share

50%
Drive solo
40%
Transit
30%

20% Carpool

10%

0%
$0 $1 $2 $3 $4 $5 $6
Price of parking at work ($/day)
Source: Estimated from Willson (1991)
 California’s Parking Cash Out Law

• Employers must provide a cash allowance to

an employee equivalent to any parking
subsidy offered
• The requirement applies to:
– Firms with 50 or more employees
– Only for leased parking spaces
Commuter Mode Share Before and After Parking Cash Out

100%

80% 76%
Commuter mode share

63%
Before cash out After cash out
60%

40%

23%
20% 14%
9%
6%
2% 3%
.8% .9%
0%
Solo Driver Carpool Transit Walk Bicycle
Commuter mode choice
 Results

• Parking cash out reduced the number

of cars driven to work by 11%
• After parking cash out, employees
– traveled 652 fewer vehicle miles per year
– consumed fewer 26 gallons of fuel per
year
Results of increasing the price
of curb parking
 FIGURE 13-1
PRICES OF CURB AND OFF-STREET PARKING
IN SOUTHERN CALIFORNIA
(for parking one hour at noon on a weekday)
$11

$10 House of Blues

Price of off-street parking ($/hour)

$9
$8 Chinese Theatre, Music Center, SCAG

$7 Santa Monica Pier, UCLA, Biltmore Hotel

Reagan Building
MGM Plaza
$6 Union Station, LA MTA, Pasadena City Hall, Coliseum,USC

$5 Venice Beach, County Museum

SM City Hall
$4
LA City Hall
$3
$2 Long Beach City Hall

$1 Pasadena Playhouse

$0
$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11
Price of curb parking ($/hour)
 FIGURE 13-2
PRICES OF CURB AND OFF-STREET PARKING
(for parking one hour at noon at city hall on a weekday)
$15
New York City
$14
Chicago
$13
Price of off-street parking ($/hour)

$12
$11 Boston

$10
$9
$8 Seattle

$7
$6 Pasadena, San Diego, Baltimore

$5 Santa Barbara

Cambridge, Santa Monica

$4 Los Angeles
$3 Buffalo, Philadelphia
$2 Long Beach
San Francisco, Portland
$1
Palo Alto, Berkeley
$0
$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15
Price of curb parking ($/hour)
 TABLE 11-4
SUMMARY OF RESEARCH ON CRUISING
Share of Average
traffic search
Year Location cruising time
(percent) (minutes)
1927 Detroit (1) 19%
1927 Detroit (2) 34%
1960 New Haven 17%
1965 London (1) 6.1
1965 London (2) 3.5
1965 London (3) 3.6
1977 Freiburg 74% 6.0
1984 Jerusalem 9.0
1985 Cambridge 30% 11.5
1993 New York (1) 8% 7.9
1993 New York (2) 10.2
1993 New York (3) 13.9
1997 San Francisco 6.5
2001 Sydney 6.5
Average 30% 7.7
 Park-and-visit times before and after changing
the price of curb parking in London
14
12.7 Before After
Park-and-visit time (minutes)

12
9.8
10
8.1
8

6 5.1
4.4
4

0
Quadruple Double No change
Curb parking prices
 Park-and-visit times before and after
R
parking prices were quadrupled
e
14
12.7
Park-and-visit times (minutes)

12
Before After
10

6.0
6

4.4
4
2.9

2
1.0
0.6 0.
0
Searching Parking Walking Total
Components of park-and-visit times
 The effects of parking prices on Grosvenor Square in London

No meters Meters Prices quadrupled

 Conclusion
• Parking is heavily subsidized. The annual
subsidy for off-street parking may be about
the size of the budget for national defense.

• Parking prices have a profound effect on

travel choices. Parking subsidies
substantially increase vehicle travel.