Accounting For Parking’s Costs

Too much parking is a bad thing. It spreads people and buildings farther apart so that it’s difficult to deliver municipal services, it undermines public transportation by artificially reducing the cost of driving, and it reduces housing opportunity in good neighborhoods by wasting land on car storage. Those costs are spread out over the entire community, though, while the benefits of excessive parking space—always having a place to store your car, attracting tenants or customers who prefer to drive—mostly go to specific people. The problem is that those people who benefit most from parking—property owners—are the ones in a position to build it, and they rarely account for the wider community costs of building too much of it. This is a classic externality problem, and it’s the kind of thing that government should step in to fix.

Unfortunately, Syracuse’s City Hall doesn’t account for the negative effects of excessive parking either. Its zoning ordinance treats parking like a public good that needs to be preserved through regulation. That ordinance requires houses to have such-and-so-many parking spaces per family, and it requires restaurants to have a different number of spaces per square foot. Every potential use has a required minimum number of parking spaces, and that’s what’s most likely to influence property owners’ decisions to build parking on their land. The result is too much parking with too little attention paid to its external costs.

The simplest thing that City Hall can do to fix this is to eliminate parking requirements entirely. Families who don’t own any cars at all are forced to pay for the privilege of being able to store one at their home, and businesses that could hire bus riders end up having to locate where there’s enough space for a huge parking lot, even if that’s nowhere near a bus stop. These homeowners and employers are the kinds of people who might choose to build less parking all on their own, if only they were allowed to do so.

City Hall can also take a more active role to direct the costs of parking to the people who actually want it. Take big apartment buildings. If a developer figures that an apartment with a parking space will be easier to rent than one without, then they might build a new building with just as many parking spaces as apartments. That’s the proposed plan for a building on Genesee Street, despite the fact that those apartments are within easy walking and biking distance of both Downtown and University Hill. Tenants in this building will wind up paying for a parking space through their rent even if they chose it specifically because they don’t own cars and wanted a central location. Their rent will subsidize other tenants’ car-driving habit.

City Hall could fix this problem by forcing landlord to unbundle the cost of parking from the cost of renting. Seattle’s done it, so landlords out there can’t hide the cost of parking in the rent. Tenants only pay for parking if they want it, and that pressures developers to build only as much parking as is actually useful.

The Seattle model sets a price for parking in a single building only after it’s constructed and occupied. At that point, it’s difficult for the property owner to respond to that price by either adding more parking or more apartments.

Syracuse can get developers to account for the cost of parking before they build with a city-wide cap-and-trade system. City Hall could change the current minimum parking requirements that apply to each property based into a maximum parking requirement. Property owners who build less than the maximum number of parking spaces would receive credits for the difference. They could then sell those credits to other property owners who want to exceed the parking maximums on their land. This would allow property owners to build as much parking as they think is necessary, but it would force them to internalize the costs of providing excessive parking. It would also give property owners an incentive to build fewer parking spaces. The result should be concentrations of parking in certain parts of Syracuse where cars are most necessary, and much less parking in the neighborhoods where cars are least necessary.

Parking imposes costs on Syracuse. Too often, those costs don’t enter into any one property owner’s decision about whether or not to build parking on their land. That’s a shame. City Hall can fix that problem by eliminating minimum parking requirements which distort decisions about how much parking is necessary, by passing laws that concentrate the costs of parking on the people who choose to use it by unbundling rent and parking fees, and by creating a cap-and-trade scheme to match the amount of parking to its demand across properties and neighborhoods. All of these policy interventions will balance the City’s transportation networks, and they will all give people in Syracuse more freedom to create the kind of City they want to live in.