If Americans Paid for the Parking We Consume, We’d Drive 500 Billion Fewer Miles Each Year

Most parking spots might cost you nothing, but parking is never really free. We just pay for it in ways that are completely divorced from our actual consumption of parking.

Free parking at the King of Prussia Mall in Pennsylvania. Photo: Montgomery County Planning Commission/Flickr
Free parking at the King of Prussia Mall in Pennsylvania. Photo: Montgomery County Planning Commission/Flickr

Most parking spots might cost you nothing, but parking is never really free. We just pay for it in ways that are completely divorced from our actual consumption of parking.

Instead of paying directly for parking, the costs are almost always bundled into the price of other things we consume. These costs are very real — it takes a lot of land, material, and labor to build and maintain parking spaces — but in the name of cheap driving, we’ve made them invisible. Everything else costs more so that driving can cost less.

Pricing a good this way produces what economists call a market distortion. Because the price of parking is hidden, Americans purchase more parking than we would if we paid for it directly.

Let’s say, for example, that the rent for an apartment also includes a parking space that costs $100 a month. The parking appears to be free, but if the rent was reduced by $100 a month and the parking was sold separately, how many people would still pay for it? Some would choose to pay for car storage and others would not — the net result would be less parking consumption than when the price of parking is hidden.

All these hidden parking costs add up to a huge subsidy for cars and driving.

In a new report, Todd Litman, a transportation economist who studies the effects of subsidies for parking and roads at the Victoria Transport Policy Institute in British Columbia, estimates that the annualized cost of land, construction, maintenance, and operations per parking space in the U.S. comes out to $600 [PDF]. Since there are about four parking spaces per vehicle in America, the cost per car is $2,400 each year.

But most parking is “free,” so Americans only spend about $85 annually on parking per vehicle, according to Litman, meaning the annual parking subsidy per vehicle is more than $2,300. That exceeds what Americans spend on fuel.

“The implications are huge,” Litman told Streetsblog.

If we paid for parking directly instead, Litman projects that Americans would drive about 16 percent less. That equates to about 500 billion fewer miles per year.

Transportation is now the largest source of greenhouse gas emissions in the nation. Pricing parking, on its own, could make a significant dent in the nation’s carbon pollution, not to mention the terrible loss of life on the roads.

It should be noted that Litman considers this to be a conservative estimate of America’s cumulative parking subsidy, which doesn’t account for the full value of all on-street parking spaces or the environmental degradation caused by parking facilities. Incorporating those costs too would lead to a 20 percent reduction in traffic, he estimates.

Parking is one of the larger hidden subsidies for driving in the U.S., but it’s not the only one. If America priced roads, fuel, insurance, and other components of the vehicular transportation system to account for the full costs of congestion, car crashes, infrastructure wear-and-tear, emissions, and other impacts, Litman projects that traffic would fall about 43 percent.

  • Dario

    The point being, there are a lot of other “hidden costs” that can arbitrarily be charged for as the author seems to suggest doing for parking.

  • Miles Bader

    the streets have to have room for parking whether you charge or not

    No they don’t.

    Streets work just fine with zero parking.

  • Miles Bader

    Here many of our roads in the city are too narrow for a city this size

    I guarantee you that 99.9% of Tokyo streets are far, far, narrower than they are where you live. Tokyo is… not small.

    There is no rule that says large cities must have wide streets.

    Indeed, narrow streets are often a benefit, as they improve walkability and generate a more local sense of place, and so encourage walking, bicycling, and transit use. The result is a better environment for residents and a more liveable city.

    If you look at American towns and cities which have gone through many street widenings and ended up with every street being massively wide, they are typically awful places to actually be.

  • kevd

    “In NYC there are many hundreds of buildings that have car elevators where they haul your car up to the 12th floor and park it there”
    you’re making that up.
    when ONE building like that was built a few years ago it was big news. if there are more than 10, i’d be shocked.

  • kevd

    hmmmm….. if only there were an economist who had weighed in on the subject….
    “In a new report, Todd Litman, a transportation economist”

  • David Dayan

    Wow, you really did not understand that paragraph. I suggest you think about it more, or go and read the paper where the meaning of this hidden cost is very clearly defined.

  • kevd

    For example – people “consume” media and entertainment, but it doesn’t mean they’re gone for good or that others can’t also consume that media or entertainment.
    Of course, unlike most parking in America movie tickets and hulu subscriptions are not free…

  • kevd

    you realize that the pavement under parking spots on the sides of streets costs money too, right? it doesn’t just magically appear and maintain itself. Cities spend money building and maintaining that square footage of asphalt. Sure, on some streets the meters and fines might cover the maintanance, but where I live (NYC) nearly every street allows on street, free parking 165/168 hours a week. The cost of building and maintain those spots is passed on to the general city budget. Therefore non-parkers subsidize parkers very heavily. And since those with cars are on the whole wealthier than those without, it is a highly regressive subsidy.

  • kevd

    “Charging for this would be extremely regressive” it definitely would not be regressive as car owners – even when restricted to street parkers – are considerably more wealthy (on average) than the majority of NYC households without cars.
    yes, there are individual outliers, but on the whole it would definitely be a progressive tax.

  • kevd

    they are not traffic lanes.
    they are parking lanes. lanes that are open to traffic 3 hours a week, and filled with parked cars 165 hours a week are parking lanes.

  • kevd

    “It’s factored into transportation infrastructure costs, which, on local streets, is in the property tax.” Not to quibble too much, but in NYC it comes from the general city budget, and all property taxes are only about 1/4 of the city’s $$ intake. Residential property taxes here are actually rather low compared to other towns and cities. But, there’s city income tax….

  • kevd

    and many city residents would be perfectly happy not subsidizing richer, suburban drivers, even if it did mean less sales tax dollars.

  • kevd

    at my office building the garage charges $45/day before tax.
    so, hearing you bitch about $10/day is very, very quaint.

  • John Murphy

    Denver is trying very hard to become as congested as LA

  • markhhendricks

    Something the author misses by a mile. Rain water runoff is a HUGE expense to communities. Every time we build a parking lot we dramatically increase rain water runoff and all the petro that goes along. It is incredibly expensive, ask anyone living in a community that now requires even drive ways to have permeable pavement.

  • markhhendricks

    None of these retailers is picking up the expense of all the run off their giant operations cause. That’s a huge expense no one seems willing to address.

  • I’ve lived in BedStuy. Most residents do not use cars, it’s an absurd proposition.

  • It’s not a particularly worthwhile point to stretch.

  • There are several reason this is occurring.

    Denver is very popular with young adults.

    Between Denver and Boulder there are several major universities.

    Denver has a very strong economy with just a 2.1% jobless rate.

    Denver is a regional entertainment center as well as home to several college and professional sports teams, with a Six-Flags amusement park downtown.

    Because of all of the above Metro Denver has a rapid growth rate.

    Denver was originally-designed with fairly narrow roads for a much-smaller city, even narrower than Cleveland’s ancient narrow roads.

    Colorado voters enacted TABOR in 1992 that forces a vote to increase taxes.

    Since 1992 there has been no increase in the State fuel tax because of this, and since 1992 the population of Metro-Denver has doubled roughly.

    Which has left the State further and further behind on both new road building to meet rapidly-rising demand as well as on basic highway maintenance.

    RTD is also flat broke after wildly overspending on the portion of our new rail mass transit system that has been completed, leaving about 25% of the original planned system that voters passed in 2004 not built, with no funds to build it with for another 25 years minimum.

    Some interesting reading on where we are headed with transportation demand growth rapidly-exceeding available funding can be found in the DRCOG 2040 Fiscally-Constrained Regional Transportation Plan, which covers the seven-county Metro-Denver region, which was new in 2015:

    https://drcog.org/sites/drcog/files/resources/2040%20Fiscally%20Constrained%20Regional%20Transportation%20Plan.pdf

  • Parking has a cost however in downtown Denver a simple space on the street will cost $2-$4 for two hours, and plenty of downtown businesses, the Performing Arts complex, the Convention center, most hotels, and many condo and loft projects all have their own off-street parking, some of which is rented to the general public, at rates of $10-$36 per-day.

    Having parking readily-available has for many years increased the value of many downtown businesses. If our entire planned FasTracks rail mass transit system had been finished on its original forecast schedule, today we might have less need for parking downtown.

    Do remember that the entire north, northeast, and northwest side of the city still does not have it promised FasTracks trains, as well as that RTD has even cut bus routes on this entire side of the Metro-area too.

    With RTD flat broke and unable to fund these rail lines for at-least 25 more years or markedly-improve bus service across the area either I am afraid that we stuck having to provide parking spaces for these commuters for many years, with suburban Metro-Denver growing by an average of 20,000 new homes every year, with the near downtown-area adding several thousand more new housing units annually too.

    There are several ways to work away from the forecast disaster we face, but without greatly-increasing regional transportation funding, we will see a doubling of severe congestion by 2035-2040 unless we reduce unnecessary commuting, perhaps by allowing more office workers to work from home, as well as aggressively pursue mixed-use and TOD development in higher-density areas, and try to head in the direction of Howard’s Garden Cities model and build a bunch of outlying new mixed-use town centers which also might help reduce commuting.

    And still most suburbanites will park for free, while rapidly-rising parking costs downtown will eventually help drive other costs up also, making downtown less and less competitive. Just in the last 6 years the cost of parking along 14th Street downtown has risen by anywhere from 75% to double, a rate much-higher than our inflation rate or our wage growth rate either. If the rate of parking cost rise downtown were to continue for another 20 years it will cost $60-$100 per-day to park a car downtown and lots of suburban residents won’t be able to afford that, so my guess is that some to many will find jobs closer to home, unless downtown employers greatly raise their wages.

  • Having parking also increases the value of property, raising property taxes, and if the owners of more-expensive real estate are wealthier that the carless population, they will generally spend more money too, which will support more businesses, and raise tax collections too.

    Here in Denver no street downtown allows free parking except on holidays. Otherwise you pay for metered street parking here 24-7 with 2-4 hour maximum allowed parking. If you need to park longer or overnight you will pay substantially more than metered rates which here are designed for shorter occupancy.

    Now residential streets well outside downtown don’t charge for street parking, but the value of homes and businesses rise when they have on-street parking.

    I have a suggestion, why not buy a house or a condo with parking so that you can start to see the benefit of having parking rather than moaning about not having a car.

  • Funny, I have that book on my bookshelf. Generally most cities only removed dilapidated, abandoned, condemned, and/or fire-damaged buildings, only some of which became parking lots depending-on the value of land and development pressure.

    I have only been through Pensacola a couple of times many years ago and am not that familiar, though I have repeatedly been to more than half of US cities, often every week for decades on-end in-fact.

    Downtown Flint, MI is missing a whole bunch of buildings, but there they just let weeds grow up in the abandoned space, while in Cleveland whenever a house burns down after the debris is removed and the foundation filled-in the city drives a bunch of 6 x 6 posts into the ground along the front of the lot so that trash can’t be dumped there nor junk cars parked there either.

    There are entire areas of Detroit, of hundreds of square blocks, where 80-90% of the housing that was there 40 years ago is long gone, while downtown there are hundreds of abandoned buildings more than 10 stories tall, some more than 40 stories tall. There they don’t have the money to tear them down and turn them into parking lots after free unfair trade cost the city a half-million middle-class jobs.

    Here is what happens to abandoned buildings in downtown Detroit. This is the top of the Book Building, 38 stories, abandoned for the last 20 years:

    https://s-media-cache-ak0.pinimg.com/originals/16/19/35/16193522a54d0b94beb7f6186685c06b.jpg

    What do you think, both those buildings in the foreground are abandoned, and they haven’t become parking lots yet?

    http://www.annarbor.com/assets_c/2012/04/broderick_tower-thumb-400×311-107999.jpg

  • Do you pay for car insurance? How about vehicle registration? How about fuel tax, how much do car-less bicycle riders pay there? How about public transit riders who only pay 20% of the operating cost at the farebox?

    And you are whining about riding on roads that only vehicle owners pay for, along with whining about parking that drives up the value of urban buildings, whose owners then pay more in taxes, as well as more in interest, and who often spend more than the car-less crowd does too?

    I think that you are a freeloader BW, why not get a job that pays enough to own a nice house and buy a car or two or three, as then you can help fund our roads and our parking spaces too?

  • It is your choice to live in an incredibly-expensive urban area too.

    Say, speaking of NYC, according to multiple USDA ERS food availability and food loss studies, it takes 1913 of food per-year before a 51% loss rate to supply an average 2000-calorie daily diet per-person.

    Now the NYC metropolitan area has 20 million people, and almost no farmland save for a few rooftop greenhouses.

    If average crop yield is 10,000 lbs. per-acre, how many square miles of irrigated farmland is required to feed Metropolitan NYC, as well as how many 18-wheel truckloads of food are required to move your food from where it is grown to all the big warehouses around the city, and how many more 6-wheel and 10-wheel trucks are required to then move your food from central warehouses to your local stores, and where will those trucks park when they get there if you take away all their parking because you hate cars so much?

    I know the answer to all of the first three questions in fact I have devised models to figure those questions out.

    Just Metropolitan NYC needs more farmland than the square area of Connecticut and Rhode Island put together to supply a 2000-calorie daily diet to each resident annually.

    At the average mix of crops sold in the US it takes one 18-wheel truck every week, 52 weeks per-year, to supply just the food for a population of 1000 people.

    And a single 18-wheel truck can haul a payload that is 4 times larger than a 6-wheel truck.

    Do you think that continuing to feed 20 million people clustered into the NYC area is sustainable when the average length of haul of their fresh food supply is in-excess of 2000 miles?

  • I have personally parked a car at dozens of them myself. Most of them are in Midtown.

  • The price of parking downtown here has doubled over the last 6 years too, a rate that has outpaced average wage growth here by 400-500%. Don’t forget that the median annual wage in our heartland is only 30% of the median annual wage in NYC too.

    So you are paying $90 for 24 hours in Lower Manhattan these days as we pay between $10 and $36 per 24-hours here within a mile of our downtown area depending on how-likely it is that your car will get stolen or you night get robbed.

    Here is my kind of city, one I can drive to and park for free, just 20 miles from downtown Denver. It is always nice and sunny, and the traffic isn’t nearly as bad as traffic is in NYC, LA, or Chicago. If you live here and want to go into the city really badly you can take the train but who wants to walk downtown for any distance when you are my age and weigh 325 lbs?

    https://www.google.com/maps/@39.634234,-104.9069208,3a,15y,156.87h,90.79t/data=!3m6!1e1!3m4!1sTphLPM0csFQRZcJx87o9KA!2e0!7i13312!8i6656

  • Cleveland had the 4th-most number of bars per-capita of any major US city according to some study that was done in the 1980s. Back then quite a bit of the revitalization of downtown was done through building a bunch more bars, restaurants, and nightclubs downtown, hoping to get downtown office workers to hang around instead of immediately fleeing for the suburbs at 5:00 PM.

    Back in the late 1970s the east side of the Flats only had 5 bars with only the Harbor Inn and Major Hoople’s on the west side. When I left Cleveland the Flats must have had 40 bars and nightclubs, and now 26 years later they are almost all gone. What the heck happened down there anyway, a big fire take the whole place out?

  • murphstahoe

    not really sure what major universities have to do with anything – aside from the fact the density of universities on the front range is laughable compared to LA or the Bay Area.

    What I see on the Front Range that is most shameful is the massive widening efforts on 25. 25 north of the City is embarrassingly wide. All this serves to do is induce driving by encouraging people to commute to Denver from the Fort Collins area. When I grew up Windsor High had maybe 300 kids, it has quadrupled. Those new families aren’t raising cattle.

    Boulders attempt to green belt resulted in the Louisville and Superior you see today, and the traffic on 36.

    Similar upgrades to 85 and the building of the ring road can only have one result – sprawl and traffic. The average size of SFR’s in the Northern counties is ridiculous. Case study in land mismanagement

  • murphstahoe

    20 years? In 20 years we will have no need for parking one way or the other.

    Needed reaction to climate change or self driving cars or whatever, the die is cast.

  • Andrew

    Do you also question the use of the term “consume” in regards to apartment rentals? Once I move out of the apartment at the end of my lease term, it’s as good as new; it’s not “consumed”.

  • Andrew

    I don’t know how many have 12th floors, but New York City has numerous multistory parking garages with car elevators.

  • Andrew

    It’s more than just the maintenance – the space itself has value. There’s an opportunity cost in setting aside a plot of land, small or large, for parking rather than for another purpose. And where land values are high, that opportunity cost is quite significant.

  • Andrew

    Having parking also increases the value of property, raising property taxes, and if the owners of more-expensive real estate are wealthier that the carless population, they will generally spend more money too, which will support more businesses, and raise tax collections too.

    Any business that believes that it is in its best interest to buy or rent additional land in order to provide parking is, of course, welcome to do so. But some businesses won’t consider it worthwhile, instead relying on pedestrians and cyclists and transit riders or expecting motorists to pay to park off-site, and they’re entitled to make that business decision, too.

    If you don’t want to patronize a business that doesn’t provide free parking, that is of course your right – just as it is my right to not patronize a business that I can’t reasonably reach by transit.

    I have a suggestion, why not buy a house or a condo with parking so that you can start to see the benefit of having parking rather than moaning about not having a car.

    Why would he go out of his way to buy a house or condo with parking if he doesn’t own a car? And, by the way, he’s not “moaning” – you are.

  • Andrew

    It is your choice to live in an incredibly-expensive urban area too.

    It’s suddenly a lot less expensive if you don’t have the burden of a personal automobile. In particular, the price to park in a parking garage becomes plainly irrelevant.

    Now the NYC metropolitan area has 20 million people, and almost no farmland save for a few rooftop greenhouses.

    If average crop yield is 10,000 lbs. per-acre, how many square miles of irrigated farmland is required to feed Metropolitan NYC, as well as how many 18-wheel truckloads of food are required to move your food from where it is grown to all the big warehouses around the city, and how many more 6-wheel and 10-wheel trucks are required to then move your food from central warehouses to your local stores,

    And how do these answers change if you’re trying to feed those same 20 million people in a different setting?

    and where will those trucks park when they get there if you take away all their parking because you hate cars so much?

    Car parking != truck unloading

    And there’s nothing hateful about expecting drivers of personal automobiles to pay for the parking they use.

    I know the answer to all of the first three questions in fact I have devised models to figure those questions out.

    Wow, you must be really, really smart! You have devised models! You’re the best.

  • Andrew

    Do you pay for car insurance?

    Considering that he owns a car, presumably he does, assuming his state requires it.

    Insurance, of course, pays for the immense damage that motor vehicles can cause when operated improperly. Pedestrians and cyclists and transit riders can’t possibly cause anywhere near that same degree of damage.

    How about vehicle registration?

    Whatever vehicles he owns are presumably registered to the extent required by his state.

    How about fuel tax, how much do car-less bicycle riders pay there?

    If they don’t use gasoline, they don’t pay the gasoline tax.

    And you are whining about riding on roads that only vehicle owners pay for,

    https://files.taxfoundation.org/legacy/docs/ff410.pdf

    along with whining about parking that drives up the value of urban buildings, whose owners then pay more in taxes, as well as more in interest, and who often spend more than the car-less crowd does too?

    Any building owner is quite welcome to pay for parking for its residents and visitors.

    I think that you are a freeloader BW,

    I can’t speak for him, but it’s quite clear that you’re quite the freeloader yourself.

    why not get a job that pays enough to own a nice house and buy a car or two or three, as then you can help fund our roads and our parking spaces too?

    He already told you on July 28 that he owns a car.

    I, however, don’t. I can certainly afford one – I used to own one, on a much lower salary than I make now – but I decided that I have much better uses for my money (including saving for retirement) than pouring it into a car. And, unlike you, I don’t need a car to prove (to myself or to anybody else) that I’ve made it.

  • Andrew

    If you live here and want to go into the city really badly you can take the train but who wants to walk downtown for any distance when you are my age and weigh 325 lbs?

    Perhaps you wouldn’t be so overweight if you weren’t so attached to your car. What is the cost of the public health crisis that is the obesity epidemic , and how much less would it cost us if we hadn’t been encouraging generations of Americans to drive everywhere?

  • kevd

    I pay $0 for parking. The 24 hour rate in my office building’s garage (which I know because they have bike racks in there) is $46 and change for 24 hours – before tax. I guess it works out to more like $50/day.
    I said that’s the market rate, not that I pay it! What do you think, I’m insane?
    I’m sure Denver is a nice place. Haven’t spent much time there and I don’t pretend to understand it. “traffic isn’t nearly as bad as traffic is in NYC, LA, or Chicago.” I avoid that nasty NYC traffic too, you know.

    325, huh? Yeah, walking more would be a horrible thing for you to do…. /s

  • kevd

    We seem to have gone into the weeds a bit here.

    Were we debating food transportation systems? I must have missed that. I’m not sure how it relates to parking subsidies….

    “where will those trucks park when they get there if you take away all their parking because you hate cars so much?”
    Oh, okay. That’s where there’s a connection.

    Um, they’ll park at loading docks and in loading zones like the do now.
    Actually, with market rate on street parking, they won’t have to double park so much and traffic would be way less fucked up.

  • kevd

    Not sure why I was picturing the residential building with one spot per apt, on that apt’s floor that went up in Chelsea.

    But yes, there are many garages with elevators in NYC. And, few go to the 12th floor. There are also hundreds of outdoor lots with the 2 and 3 and 4 level car lift thingies. S

  • kevd

    “The price of parking downtown here has doubled over the last 6 years too, a rate that has outpaced average wage growth here by 400-500%”
    The market seems to be telling us what the price of parking should be in our respective locations.

  • kevd

    agreed.
    But we can’t even get these people to understand relatively basic concepts like “asphalt costs money” so I was holding off on higher level stuff like opportunity costs. You gotta walk before you can run, eh?

  • kevd

    Not moaning about not having a car.
    I’m moaning about subsidizing those who do.
    And we could probably tack on moaning about subsidizing their obese drivers increased health care costs if we wanted to.

  • Andrew

    Agreed – just adding on to your observation, not disagreeing.

  • Andrew

    Isn’t it cute how people who are wedded to their cars assume that everybody incurs the costs of operating a car, even in cities where car ownership rates are quite low?

    You’ve demonstrated the exact point of this piece – that people tend to forego car ownership where the cost of parking is high (mind you, on-street parking is still heavily subsidized in New York!) – but it went right over his head. He can’t imagine living without a car, so it must be impossible.

  • Andrew

    Yes, I figured that’s what you had in mind.

  • kevd

    I was sure to check the monthly this morning.
    $688….. for a normal sized car. More for Luxury cars and SUVs.
    I wish we could dynamically price on street parking throughout NYC in order to ensure there is always a couple free spots per block.
    Some places wouldn’t change at all ($0/day) – like residential blocks in Midwood and Marine Park (rode through this weekend) where maybe 1/2 the on street spots are taken.
    Many would be a couple bucks a day and some might be $20 or so.

  • kevd

    Wait till he hears how low my car insurance is!

  • I-25 north of the city is a disaster it is so narrow and choked to death with traffic. Why not whine about I-25 south of the city instead, which is 10-12 lanes wide and has a parallel rail mass transit line?

    I-25 north of US 36 only has 6 general-purpose lanes and 2 carpool, bus, and toll lanes, whereas I-96 in my old hometown has 12 lanes between the Southfield Freeway and downtown, and my old hometown was the exact same population when I-96 was widened to 12 lanes as Metro-Denver is forecast to be well before RTD has another dime to spend on finishing our FastScam rail mass transit system.

    In-fact RTD is so broke they are laying staff off and deferring maintenance on their aging buses, while cutting service too.

  • potedude

    Kitchens are essential, parking lots less so.

  • Where my wife and I live for convenience to multiple non-urban destinations, for multiple destinations in different directions, and because city felony crime rates are 10-20 times as high as they are here, our Walk Score is 9 out of 100. We were promised both two rail mass transit lines and a BRT line within walking distance back in 2004 and unfortunately, after RTD wildly overspent on grandiose train stations and wildly-expensive unnecessary bridges, now they are flat broke for the next 25 years and are cutting staff and deferring maintenance on their aging buses that average 11 years old already.

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