Reading Donald Shoup really changes subsequent reading — October 26, 2015

Reading Donald Shoup really changes subsequent reading

Having read The High Cost Of Free Parking changes the way you read articles about parking. For instance, when you read an article like this, containing a quote like this:

On the campaign trail two years ago, Walsh pledged to look for ways to increase parking spots in city neighborhoods.

“We have to try to make parking more accessible,” Walsh told the Herald in September 2013. “I hear it every single day out on the campaign, the lack of parking. It’s an issue in every single neighborhood.”

, you realize that there’s a missing implicit word in there. The word is ‘free’. The newspaper — and maybe vintage-2013 Mayor Walsh — seem to assume that free on-street parking is a god-given right. Whereas if you admit the possibility of charging for parking, another solution leaps out: you can make parking accessible by charging for spaces. Some people will choose not to own cars. Some people will pay to put their cars in off-street parking. Then you’ll get your accessible parking.

I think vintage-2015 Mayor Walsh gets it. The article centers on residents’ anger over the city’s leasing parking spots to the likes of Zipcar. Mayor Walsh responds exactly as he should:

“The way that we’re doing this is to cut down actually on people having to own cars and driving cars and in the long run, it’ll actually save cars coming into the North End. People will be able to take a car and share community cars.”

There’s what you might call a “fallacy of simplicity” in people’s reactions to a lot of policies, including this one. The fallacy of simplicity says that if you want to achieve x, the way to do it is to do something whose immediate effect is x. Want to increase parking? Simple: dedicate more land to parking spaces. (Harder, and more likely to be correct: make it easier for people to live in a city without owning a car.) Want to cut the Federal budget deficit during a recession? Simple: cut spending. (Harder, and more likely to be correct: spend more money on public works, which pumps money into the economy, which gets business going, which restores a self-reinforcing economic boom.) Mayor Walsh isn’t subscribing to the fallacy of simplicity here. He’s aiming to reduce parking use by reducing demand, rather than increasing supply. That’s the right idea.

But if we’re going to look for simple solutions, how about not allowing every home to own unlimited parking permits?

Or to quote Lewis Mumford (from “Babel in Europe”), “The main issue is that the right to have access to every building in the city by private motorcar, in an age when everyone possesses such a vehicle, is actually the right to destroy the city.”

Paying the full cost of a car — October 10, 2015

Paying the full cost of a car

I wonder how much mileage (so to speak) we’d get out of compelling car owners to pay the actual cost of their driving into a crowded city. The actual cost includes

  1. The cost of parking, which is to say the value of the next-best use of that extremely scarce land. As I recall, Shoup considers only the cost of constructing a parking space within a surface lot or in a structure, and explicitly ignores the value of the land. But imagine what we could do with that land: if the parking weren’t there, we could, among other things, extend housing. The average parking space looks to be around 180 square feet. In Boston, it’s not at all uncommon for an apartment to be valued at $750 per square foot. Imagine putting four stories of housing on top of that 180-square-foot unit; the value of the foregone housing is $540,000 (180*$750*4). If you secured a 30-year mortgage on that $540,000, it would cost you $3.58 per hour; the price of parking ought to be at least that much. Then add in the cost of constructing the parking space in the first place, the cost of its maintenance (occasionally re-paving it, etc.), the cost of enforcing parking tickets on it, etc., and it adds up.

    The point of the numerical exercise is simply that the cost of a thing should equal the cost of what you’re giving up to get it. Since we treat parking as free, and we treat it as a god-given part of the landscape, it’s hard for us to remember that there are other, possibly better, uses for that land.

  2. The collective loss of time caused by our individual decisions to enter an already-gridlocked city. One fellow has estimated that every additional car entering Manhattan during the weekday costs $160 in lost time. (Obviously the amount decreases at night and on weekends.) This is not hard to believe: one additional car adds a few seconds to everyone else’s commute. This is not to say, unless I misunderstand, that the marginal driver should pony up $160 for the privilege of driving into Manhattan; it’s easy to imagine that a fee of $10 or $20 would discourage enough drivers from entering the city that the congestion problem would resolve itself. But regardless, it should be obvious that my decision to drive has effects on people other than myself, and that I’m not required to pay for those effects. The economists call this a “negative externality” — a term for which we need a more scolding replacement. A “negative externality” is “your not cleaning up your own messes” or “a tax you impose on the community.” [1]

    The positive externality corresponding to this, on the flip side, is what subway riders give to the community every time they get on the train. If, in lieu of riding the train, you would have taken a car into work, then your decision to take the train saves the rest of us time, and you ought to be rewarded for that. (I don’t own a car; in lieu of taking the train, I’d walk or take the bus, so I sadly shouldn’t be the beneficiary of this reward.) You could be rewarded, for instance, by cheaper subway fare. A fee levied on automobile drivers that goes directly to subway riders would make the point particularly clearly.

  3. Environmental costs. When befouled air causes children to develop asthma, I don’t pay for that. When leaded gasoline leads to increased levels of crime and stunted mental development, neither I nor the petroleum companies paid for that. When your backfiring engine rouses me out of a sound sleep and destroys my productivity the next day at work, you don’t pay for that.

Add up all these costs, and many others I’ve not articulated (e.g., how much of our military budget would disappear if cheap gasoline weren’t considered a birthright?), and I wonder what the actual social cost of driving a car is.

[1] — I’ve wondered for a while whether economists feel morally complete once all negative externalities have been paid off. Suppose I dump radioactive waste in a lake, then pay to relocate everyone around the lake to a nicer, less-befouled area. By hypothesis, that waste now hurts no one, and all present harms have been compensated. Does the economist smile and consider the work done, or does he feel a morally repugnant residuum? After all, I dumped radioactive waste in a lake. Simply paying off the negative externalities shouldn’t balance the moral scales. Yet so long as the townspeople and I signed a contract freely and fairly, I get the sense that economists sleep soundly.

Naturally there’s a question of those who weren’t around when the bargain was struck. My children now can’t enjoy that lake. A few generations hence, someone might drink irradiated water and die a horrible death; that person didn’t get to choose whether to sign the contract. So within the notion of a “compensated externality” there lurks, not far below the surface, the idea that I hold this world in trust for those who follow. If I’m going to sign a contract on their behalf, I’m also assumed to be a fair judge — in fact, the only permissible judge — of their will. After all, if I’m not in some sense their representative, then what right do I have to sign a contract on their behalf?

I’m sure someone has written about the moral assumptions underlying negative externalities. I’d love to read it. As is so often the case, what sounds like a neutral technical dispute — how much to pay for the messes I create — is soon found to be a moral problem rather than a narrow economic one.

Donald Shoup, The High Cost of Free Parking — September 24, 2015

Donald Shoup, The High Cost of Free Parking

A Monopoly board -- particularly the few squares around Free Parking, of course

The High Cost of Free Parking has changed a lot of minds in its few years on this earth. For a book about a seemingly dry subject, THCOFP‘s effect has been shockingly strong. The premise of the book can be laid out in a few bullets:

  1. Cities’ parking minimums on real estate are dangerous. This much is obvious, in that producing too much parking is exactly the point: if developers would produce that much parking on their own, then minimums wouldn’t be necessary.
  2. The usual argument for buildings to come with their own parking is that if they didn’t, the buildings’ users would spill over and use public parking. But the only reason to assume they’d use city parking is if public parking is free, as it is most everywhere. But what if cities charged the market rate for public parking? Then, presumably, people would be indifferent between off-street parking and public parking.
  3. The impact of free parking is devastating at many levels. It scars cities. It orients cities toward drivers rather than toward bicyclists, pedestrians, or those who cannot afford cars. And free parking (emphasis on the free part) isn’t good for the drivers, either: they spend minutes, on average, cruising around looking for parking, with expected effects on the environment and the drivers’ own state of mind. And the environmental effects go further: a world oriented toward drivers and parking is a world where buildings are more spread out, which is thus harder for pedestrians, which encourages more people to own cars purely out of convenience, which thus creates a larger lobby for car-centric cities, which makes the cycle start all over again.
  4. People expect to be able to park free everywhere, so the story is even worse than all of the bullets above would have it. Not only must there be one free parking space in the world for my car — there must be two or three. City planners seem to require enough free parking at every new restaurant, barber shop, ice-cream shop and café to accommodate peak demand; as Shoup quotes somewhere in The High Cost of Free Parking, “Do not build the church for Easter Sunday.” A typical standard for restaurants (in California, anyway, from which Shoup draws most of his examples) is four spaces per thousand square feet of dining area. At 200-300 square feet per parking space, parking area can easily swamp dining area.
  5. So parking should be market-priced. How much should we charge? Answer: charge enough so that there are always one or two free spaces available on every block; Shoup’s threshold is 85% full. This will stop people from needing to cruise, so the drivers themselves should be happy.
  6. But people are used to having free parking everywhere. How, to put it bluntly, do we buy them off, so that they’re willing to forego free parking? Answer: give them something for it. When a neighborhood charges for parking, some fraction of the parking proceeds should be returned to a Business Improvement District in that neighborhood — money that can be used to repair (or expand!) sidewalks, plant trees, and generally make the neighborhood look nice. People will see the benefits of paid parking returned to them. The people who will object to paid parking will be those who, for instance, drive into the neighborhood during the day to go to work and drive home to the suburbs at night — but those people don’t vote in that neighborhood, so their voice won’t have an effect.

Donald Shoup is in many ways like Jane Jacobs. One of the great joys of Jacobs’s Death and Life of Great American Cities is that she turns what might be a huge topic — subject to pure moralizing arguments like “What do we want out of cities” — into a number of small, practical, answerable questions. She looks out her window and asks what value sidewalks have. You want sidewalks to be wide enough so that kids can play on them; wide enough that a restaurant can drop a couple tables on them; etc. How about buildings? How tall do you want them to be? Well, we want our neighbors to be engaged with what’s happening on the street; skyscraper apartments can’t do this. And so forth. After she’s wrapped her (and our) brain around low-level details, only then does she scale out and talk about cities generally. And by that point she has a much more concrete object in her head, which it’s much easier to reason about with a minimum of ideological pollution. So it is with Shoup: he hardly spends any time talking about grand issues like global warming; instead he keeps focused on an individual car searching for an individual parking space, asks us why the car is spending so much time cruising, and lands the blame on the fact that parking is free.

Of course this should be obvious. We see videos of Soviet-era breadlines, and we pin the blame on a price system that wasn’t allowed to work; we never turn the lens back on ourselves and ask what harm we’re doing by assuming that a scarce resource should be free. Others have probably pointed this out in the past; this sort of thing probably occurred to Lewis Mumford, but Mumford was a genius who was a few decades ahead of his time. It took Donald Shoup to really bring this issue into the public mind in a real way. Now I hope people will actually put his ideas into action.

Starting Donald Shoup’s High Cost of Free Parking — September 7, 2015

Starting Donald Shoup’s High Cost of Free Parking

A photo of part of a Monopoly board, centering -- of course -- on the Free Parking square

Donald Shoup’s The High Cost of Free Parking has been on my to-read list since I was knee-high to a grasshopper; I think I’ve delayed reading it out of a vague concern that it’s just going to tell me what I already believe. (Is anyone else with me that a lot of books are like this these days?) But I just started reading it, and the introduction has already blown my mind a little bit by giving a sense of the scope of the damage that free parking does.

Take this, for example: Shoup makes a really good point about the usual argument for cities’ requiring developers to provide parking spaces. The usual argument is that, if developers didn’t provide it, people would consume the common resource (on-street parking). But this starts from the assumption that the correct price of parking is $0.00, so that developers are required to supply the quantity of parking that would be demanded if parking were free. So the city is constantly forcing the price of parking down to $0.00.

He contrasts this with the fight over affordable housing. It takes a lot of fighting to get even a few units of affordable housing, yet “affordable parking” — in fact free parking — is just assumed.

The book is also rich in data. Citing the 1995 NPTS, Shoup notes that drivers spend an average of 73 minutes per day in the car; a quick approximation, then, says that the average car is idle for 95% of the day (i.e., 100 * (1440 – 73)/1440 percent of the day). That’s a shockingly high number. Makes my mind wander off in a couple directions:

  1. Will driverless cars really solve this, as people hope they will? Yes, cars are idle 95% of the time, but everyone is using their car at exactly the same time of day. If the supply of driverless cars needs to be matched to peak demand, will we end up with the same number of cars?
  2. Cars might resemble books, in that we own them and mostly don’t do anything with them; they mostly sit idle. Just as it’s probably more efficient to give up our personal libraries and use the public library, perhaps there’s an efficient public solution to the problem of mostly-idle automobiles. I’ve thought similar things before about snow blowers. But the problem with snow blowers feels the same as the problem with automobiles: everyone tends to want to snow-blow his driveway, or drive to work, at exactly the same time. Many library books don’t suffer from this problem: I likely want to read The High Cost of Free Parking at a different time than you do. On the other hand, maybe we all want to read the same bestseller at the same time.

There’s probably a body of economic theory that already explains the optimal allocation of these sorts of goods. I’d be interested in finding a good intro.

So anyway, Shoup looks quite promising. I hope to report interesting findings from it in this space.