The Parking Lot Cycle

Lydia DePillis has a story about development in Dupont Circle that reminds us that you don’t need formal regulatory parking minimums for the dysfunctional land use regulatory process to end up generating an above-market share of parking spaces:

There are no balconies on the O Street side of the building, which might have infringed on the privacy of the residents of the Richmond Condominium to the north. They’re building more parking spaces than tenants will likely use just to avoid fighting on another front.

“We know it’s a loss leader,” said a rep from Keener Squire. “We’re just doing it because we’re asking for one variance, we don’t want to ask for another variance. We’re building more vacant parking spaces, because we don’t want to listen to people complain about parking.”

People don’t, I think, adequately understand the pernicious dynamics that sub-market parking creates in urban neighborhoods. If you live in a typical American urban area (i.e., not Manhattan), then a car is both something that it would be very useful to own and also something that’s quite expensive to own. When new developments are built with more parking than a pure market equilibrium would create, that induces more car ownership than you would otherwise have. That increase in car ownership reduces market demand for neighborhood retail (since you can drive to auto-oriented stores in the suburbs), which then creates more market demand for parking. You can’t really be the one household in the neighborhood that doesn’t own a car, because no businesses in the neighborhood are going to be catering to a pedestrian client base. By contrast, if you provide the market-determined level of parking, then the neighborhood sees an increase of carless people and businesses have incentives to cater to a carless clientele, which reduces the demand for auto-ownership in America.


This is all, admittedly, not a huge deal in the majority of the territory of the United States where land is cheap and the ratio of cars to adults is 1:1. Still, you’d be surprised. “Everyone knows” that everyone has a car in LA and drives everywhere, except 16 percent of households don’t have a car (and presumably some households have two adults and one car) and the regulatory framework will shape how that evolves over time.