Building a single parking spot can easily cost more than many Americans' life savings. In the latest issue of Access Magazine, retired UCLA economist Donald Shoup brings this point home to illustrate the huge financial burden imposed by minimum parking requirements, especially for poor households.
The average construction cost of structured parking, across 12 American cities, is $24,000 for an above-ground space and $34,000 for an underground space. (Surface parking spaces are cheaper, but keep in mind those prices don't include the cost of purchasing land.) Those costs get bundled into the price of everything, driving up the cost of living even for people who don't own cars.
The burden of parking requirements, which mandate the construction of parking spaces that otherwise wouldn't be built, is most acute for people of color.
In 2011, the average net worth of Hispanic households was $7,700 and of black households was $6,300, Shoup notes. Thanks to parking requirements, households without much savings -- many of whom have more debt than assets -- must contend not only with the cost of parking construction, but the cost of car ownership as well, writes Shoup:
Many families have a negative net worth because their debts exceed their assets: 18 percent of all households, 29 percent of Hispanic households, and 34 percent of Black households had zero or negative net worth in 2011. The only way these indebted people can use the required parking spaces is to buy a car, which they often must finance at a high, subprime interest rate. In a misguided attempt to provide free parking for everyone, cities have created a serious economic injustice by forcing developers to build parking spaces that many people can ill afford.
A more equitable policy would be to simply do away with parking requirements, which in London cut the number of new parking spaces in half. Barring that, even just reducing parking requirements can still have a profound effect on the cost of living, Shoup says.
