Cars are very useful, and if you want to own one, you need someplace to put it. A parking space is valuable, and so reasonable real-estate developers will typically want to feature parking spaces as part of a new development. But parking spaces are a building amenity like any other—granite countertops or spacious bathtubs or a fitness center or a roof deck—and so they’re something the real-estate market is capable of generating in the quantity that people demand. The current rules, mandating that all new construction come with more parking spaces than the market supports, create costly distortions throughout the city.
Michael Manville of UCLA studied a liberalization of parking regulations in one section of Los Angeles and found that deregulation leads to the construction of more housing units and fewer parking spaces. Conversely, tighter regulation leads to a lack of affordable housing and a surplus of parking spaces. That might make sense if parking spaces were a public good, like clean air. But they’re closer to being a public bad. When Chicago mandates the creation of ahigh number of parking spaces per square foot of downtown office building, it reduces the price of parking, but it has a number of negative consequences. Cheaper parking means more traffic congestion on the streets. It also means lower ridership for Chicago mass transit. Perversely, cheaper parking offers a subsidy to commuters from outside the city limits at the expense of Chicago residents living within walking or biking distance of the central business district. And, of course, it leads to dirtier air, not cleaner.