Here’s an excellent point from Ken Archer about the debate over whether to ease restrictions on “accessory dwellings” (basically letting people put separate rental apartments in their attics or basements):
In fact, the greater numbers of residents in existing buildings is actually part of the neighborhood’s historic character. In 1950, DC had 13,151 people per square mile. As of 2000, it had only 9,316 people per square mile despite building more buildings. This happened because household sizes decreased; 44% of households have only one person compared to 14.3% in 1950, and the number of children declined 39%.
Allowing a childless couple or empty nester to rent out a basement apartment or carriage house actually lets Georgetown’s historic buildings hold the same numbers of residents they used to hold, and bring potential customers to the neighborhoods’ shops.
Of course the real issue here concerns parking. Currently street parking is priced cheaper than what a free market would bring. That’s a regressive transfer of resources from poor people to rich ones. It also leads to parking space shortages. Rich people in Georgetown (and elsewhere!) would like to hold on to their regressive gains, but they also want to avoid a situation in which shortages become worse. Archer suggests that parking shortages “should be addressed by better management of on-street parking.”
And I entirely agree. Better management of on-street parking, i.e. market prices, would be a great idea. But while that does solve the scarcity it doesn’t really address the “I’m currently getting an unfair subsidy and I don’t intend to give it up” issue. I think the best path forward would be for reformers to simply acknowledge that people who have these subsidies feel that a right to benefit from bad public policy was one of the things they bought when they bought their home, and for the recipients of the subsidies to acknowledge that they just want what’s theirs and don’t actually care about the rest of it. That would clear the way to a solution, namely a big increase in residential parking permit fees that grandfathers all the incumbents in. That’s not optimal policy by any means, but it would let incumbents obtain their core demands at minimum cost to outsiders.