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June 30, 2009
The High Cost of Canada’s “Free” Parking
Municipal regulations require that urban developments provide on-site parking. These regulations seem innocuous and receive little attention in public policy discussions, but they do in fact have serious consequences. They stimulate urban sprawl, encourage excessive use of cars, create inequitable social outcomes, reduce housing affordability, and suppress economic development. Wiping parking regulations from municipal planning codes across Canada is arguably the most urgent policy reform Canada’s municipalities can make.
In the middle of the last century, transport engineers focused on delivering free-flowing car travel. Parking regulations required developers to set aside a portion of their property for parking to ensure that drivers looking for parking spaces did not create undue congestion and delay other road users. Parking regulations are politically palatable because they improve driver convenience by including the cost of parking in the overall cost of development. This is indeed the root of the problem – parking is not free; the cost is merely hidden.
Today, 90 per cent of private vehicle trips in North America end in a “free” parking space. It is not free, however, when one considers the valuable urban land used to provide it. Municipal parking regulations are extremely land intensive and very costly as a result. Developers who build banquet halls in Richmond, B.C., for example, are required to provide up to four square metres of parking for every metre of hirable banquet space. The result is that everyone pays more for banquet space.
The cost of parking can be substantial. The Toronto Parking Authority estimated that the cost of providing a single parking space could be up to $40,000. U.S. researchers estimated that parking subsidies are several times the price of gas used by cars. Perhaps the most insidious characteristic of parking regulations is their self-reinforcing nature that progressively molds the urban landscape into a gigantic parking lot. By taking up land, parking spots reduce density and make car travel more appealing, which leads to – surprise, surprise – greater demand for parking. In these ways parking regulations have contributed to more, rather than less, congestion.
As with many public policies, the effect of minimum-parking regulations varies depending upon income. These regulations almost certainly steal from the poor and give to the rich. A low-income earner is likely to spend a larger portion of their money on basic goods and services that build in the cost of parking. Supermarkets, for example, recoup the cost of parking in their grocery prices. Low-income earners are more likely to carpool, use public transit, walk or cycle, so they are less likely to benefit from the parking they are forced to subsidize. The cost of higher density housing is inflated by parking regulations.
Because the cost of parking is built in to the cost of other goods, people are less likely to make use of alternatives to the drive-and-park lifestyle. Car pooling, public transit, telecommuting, car sharing and online shopping reduce the demand for parking, but consumers have no incentive to choose these options because the cost of parking is built in regardless. One scholar called minimum-parking regulations a “disastrous substitute for millions of individual decisions . . . about how much a parking space is worth.” In aggregate, parking regulations amount to a vast misdirection of economic resources.
Unlike many deregulation initiatives, the removal of minimum-parking regulations does not need to be sudden or disruptive. If parking regulations were removed today, Canada’s urban areas would adapt slowly over years with new developments having only small impacts on the overall demand for parking. Instead of regulating the supply of parking, municipalities would need to shift focus to managing demand for parking, which they can do through the use of time-limits and ultimately prices.
A deregulated parking supply is crucial to ensuring that Canada’s urban areas are able to tackle current economic and environmental challenges. If Canada’s planners are truly committed to economic growth, sustainability and livable communities, they should first focus on making sure existing regulations do not surreptitiously undermine these urban objectives. It is time we realized parking is not free and instead implemented simple regulatory reforms that allow developers, businesses and consumers to manage their demand for parking in a more effective manner.
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