Thought experiment: a politically feasible way to introduce a parking market

One of the most blatant subsidies to car use is undoubtedly the parking subsidy. Parking can be very expensive, with parking in garages, both underground and overground, often being more expensive than the car that is parked therein. So, it would be best for parking to be priced to reflect its costs, a price that the user would have to pay. The best way to do so, I think, is through a parking market, allowing people to trade parking spaces and thus determine an adequate price for them, that often reflects their actual cost.

Now, I've spoken a lot about this, but I've never really talked about it considering practical political concerns. Meaning, how can a parking market actually be implemented in our cities considering the current political climate?

For example, I like the proof of parking system in Japan very much, but it's a system that relies on a population more used to paying for what they use and in a country where street parking is largely banned. In North America, street parking is frequently used, and even when it's not, it's available as a possibility in most cases for residents, and people aren't used to paying for parking.

So here is the result of my reasoning, how I think introducing a parking market can be possible, at least, for residential parking.

First hurdle: dealing with street parking

Street parking is, without a doubt, the single most difficult obstacle to deal with, because the possibility of it can serve as a free alternative provided by the government, so it can short circuit the entire parking market. Why pay for something when you can get it for free? So we have to find a way to integrate street parking into the market.

Some places have introduced street parking permits people have to buy, but this is far from ideal, because residents as a whole dislike them (unless the majority of residents do not own cars), the price of these permits tends to become a political issue (so not following the market's logic) and it doesn't quantify the number of parking spots, in most cases, there is no limit to the number of permits cities will issue.

So, the question then becomes: how to introduce a limited number of parking permits, while leaving its pricing out of the hand of elected representatives, all in a way that current residents won't see as a slight on their ability to park?

Well, I may have an answer, inspired by what happened in the densification of the Rosslyn-Ballston corridor in Arlington. I think it is an approach that:

1. Does not have government directly charging for parking
2. Does not remove parking rights from current homeowners in the area (though condo owners and renters will face a parking squeeze)
3. Quantifies the number of parking spots and allows for them to be traded on an open market
4. Does not require complex and expensive enforcement, residents will do the enforcing themselves

OK, so what is it? Issuing free parking permits to each property owner depending on the street-fronting width of their lot.

Here is an example, take this area:

Example for parking permits based on street fronting width

So you have 8 houses on lots of varying widths. Well, let's say that you say that you need 6 meters of curb for each car parked on the street. Well, then you divide the width of each lot by 6 meters and that gives you the number of parking permits each homeowner gets.

So, in the example, the owners of lots 2, 3, 5, 6 and 8 all get 2 parking permits (12m divided by 6m = 2). 

Owners of lots 1 and 4 get 3 permits each (18m divided by 6m = 3).

The owner of lot 7 gets 4 permits (24m divided by 6m = 4).

These permits can be distributed yearly and may be simple plastic cards to hang on the rear view mirror, so they can be handed to visitors. That way, neighbors can also ask each other to lend them the permits if they expect a lot of visitors. People could also sell their parking permit for the year or rent them, in case they don't need them, which creates a resale market for parking permits.

Since these permits are freely given to homeowners, the acceptation level may be high, because people may see it not as a restriction on their right to park on the street, but as a protection of their right to park on the street ("I'm guaranteed two available spots on the street" rather than "I'm limited to two spots on the street"). Street parking thus becomes a right that comes with owning property, and as bigger lots tend to pay higher property taxes (especially if in combination with a frontage tax), the cost of street parking gets integrated into the taxes of each property owner. Since the parking is provided by the city, this is defensible on an user-payer approach.

What about apartments?

In this scenario, the owner would still get the permits, then distribute them how he sees fit to his renters. These could be included in rental contracts or rented apart from the apartment. So if a landlord has 3 parking permits and 6 units, he can offer his parking permits separately, so renters who want one have to apply for one, and if his renters are not interested, he can rent them out on the open market.

What about condos?

In this case, the condo association is the one receiving the permits, and the distribution of these permits is to be sorted out among the different condo owners. Again, the city government doesn't decide these things, it just issues the permits and lets the condo owners decide. Arguably, it's better for new condo constructions, because the condo builder can sell these parking permits apart from the condos, which leads to less problem for condo associations.

What about enforcement?

Active enforcement of this system is not really required. Enforcement can be reactive, meaning that if there are problems with parking, then permit owners themselves will complain to the police and call them to verify the cars parked on the street. This does mean that in low-density areas, the rule may not even be applied, not changing the status quo... and that's positive for acceptation, I think.

What about fractional permits?

This is the biggest problem with this approach. In the previous example, I made it simple, each lot width was a multiple of the width associated with a permit, but in real-life, it's not going to be the case. For example, what if instead of 1 permit per 6 meters, we had 1 permit per 10 meters, to take into account driveways and fire hydrants? Well then, you'd have:

Houses 2, 3, 5, 6 and 8 deserve 1,2 permit each.
Houses 1 and 4 deserve 1,8 permit each.
House 7 deserves 2,4 permit.

Overall, you have 12 permits maximum. Houses 2, 3, 5, 6 and 8 all get 1 guaranteed, house 1 and 4 get 1 too, and house 7 gets 2 guaranteed. That makes 9, leaving 3 permits in surplus, so you look at the fractions, house 1 and 4 thus get an additional permit because their fractions are higher than others (0,8 versus 0,4 and 0,2), and the last one goes to house 7.

What if all houses have similar widths? Well, you can either use the surplus permits to have a visitor section that doesn't require permits or organize an auction for them (distributing the proceeds as property tax rebates for people with fractional parking permits).

Advantages

The advantage of this system is how adaptable it is. It is a rule that can work both for low-density housing situations and for high-density areas, and that is, I believe, somewhat likely to be acceptable for residents in both situations. In low-density areas, these permits have very little impact, in high-density areas, they become more restrictive. So this is a rule that evolves with cities and that doesn't require sporadic reforms or arbitrary interventions by politicians or officials in order to work. By allowing permits to be traded on an open market rather than having a fixed price, you also take away the government decision-making that makes parking prices so politically contentious.

This approach also quantifies street parking supply by limiting it with permits, and so can help lead to the establishment of a proper parking market that will create a pricing dynamic for parking spaces.

Second hurdle: dealing with parking requirements

Unlike in Japan, where people see no issue leaving it to car owners to find a place to park their cars, North America and Europe tend to prefer "upstream" solutions to that issue. So instead of leaving car owners with that responsibility, we prefer to heap as many restrictions and rules on developers as possible. These restrictions are thus invisible to most people, as only developers have to deal with them directly. Whether that's a good or bad decision, that's up to everyone to decide (I vote: bad thing).

Hence why we have parking requirements for new constructions, so that the responsibility of finding parking spaces for the occupant is actually on the developer, and not on the occupant himself. So, how can we establish a parking market in that context, while maintaining the upstream parking controls we apparently like as societies?

The answer that seems apparent to me is to simply allow for a transfer of parking to satisfy parking requirements. Simply change the rule that off-street parking has to be provided on the same lot as a new construction, and allow for any parking spot within a certain radius to be used, if the developer buys the rights to it from the current owner.

So, for example, if someone has a double-width driveway and there is a vacant lot next door:

Single-family house with a double-width driveway, deep enough for 4 parking spots, next to a vacant lot

Now let's say a developer wants to build a triplex on the lot next door, but due to limitations on curb cuts and a 2 parking per unit limit, he can't really build 6 parking spaces on that lot. However, the single-family house owner no longer uses all his parking spots, so the developer can approach him and offer to buy half his driveway for, say, 5 000 or 10 000$. If the owner agrees, then the triplex can be built:

The triplex can go ahead thanks to a parking transfer

Furthermore, such a system allows for a gradual reduction of parking spaces over time, as long as you do not enforce parking requirements on existing buildings after a few years, because you can still have minimum parking requirements for new developments that require more parking spots than can be reasonably expected, and 2-3 years later, the unused parking spots can be sold to developers who will need to satisfy high parking requirements. By attrition, the number of parking spots per unit can be reduced, adapting to the situation.

The advantage of a system like that versus a simple reduction of parking minimums (though both can and should come together) is that it provides a financial incentive for many residents to actually support such a change, because it may allow them to sell their unused parking and make potentially thousands of dollars. It won't short-circuit the die-hard NIMBYs, who care only about status, but it may create a group of people who will support the change because of that financial incentive.

It also allows for off-site parking lots to be built to satisfy multi-family developments in areas with a lot of redevelopment pressures. If there is a lot of demand from developers for parking, one developer could ostensibly take over a vacant lot, or one with a low market value, and transform it into a parking lot to satisfy parking requirements for the entire bloc.

This has a big advantage of allowing small-scale developments in densely-built areas, even with some off-street parking requirements. A big problem of low-rise walk-ups in dense urban areas right now is the parking requirement, even if it's just 0,5 space per unit, it's nearly impossible to have underground parking to satisfy this requirement in a way that isn't absolutely dreadful. The only way (without rear alleys) is to have front-loading slip-under garages like this:

Low-rise walk-ups in Montréal, built in the era of parking requirements

Whereas large-scale buildings can have an entire parking lot with a single entry point for the entire building, which at least avoids having walls of garage doors at ground level:

Mid-rise 130-meter wide building in Montréal, with just one curb cut to enter the parking garage underneath

With the ability to satisfy parking requirements with parking transfers, in such an area, you could have a developer build a single 2 or 3 story parking garage, with a small setback and hidden from the street by trees, and therefore satisfy the parking requirements for an entire bloc or two of small low-rise buildings, attached or detached, maybe even at a more affordable price tag.