Really. As I was moving into college we, unfortunately, had to keep a car in Philadelphia for quite a few days. And the whole ordeal reminded me how much I hate private parking lots. This is just another Georgist rant, so if you’re not into land inequality and inefficiency feel free to ignore it.
First, profits owners earn from parking lots is the purest form of rent in the modern world – because it’s all land. At least some of the money you pay to lease an apartment is value added by the owner – the building, insurance, and basic upkeep come to mind. But the parking lot owner does absolutely nothing. Of course, most modern lots are nicely paved, but most people don’t care about that. Roadside lots are paved for cars to drive on – not to park on – and 99% of us wouldn’t pay a cent more for a lot that’s paved as opposed to one of grass, gravel, or dirt. Therefore the entirely arbitrary initial distribution of land determines all profit earned by a few lucky landowners that do absolutely nothing to take your money.
But private parking is also a socially inefficient good, as it is a de facto tax on public transportation. Their existence lowers the opportunity cost of driving, which itself requires more land. Path dependency and positive feedback between private driving and parking creates a deeply inefficient city promoting rents not only landowners, but wealthy citizens.
Since roads are usually a public good, it’s difficult to tease out who earns the rent. But we know that rents are earned any and all times the initially primary land isn’t distributed equitably, so the benefit from public roads accrues almost exclusively to those who drive the most.
Who drives in New York City? Well most people take the subway. But any firm on Wall Street provides its entry level analysts a driving service – or at least pays for cab fare. And surely you’ve seen at least one or two black limos. I’m going on a limb and guessing that like me, most of you and America can’t afford one of those. For this reason, public parking for which the price is undervalued can be just as bad: it disproportionately benefits those who already own cars.
And cabs are used by more affluent residents who for god knows what reason won’t take the subway, or tourists. Tourists are almost always affluent Americans or wealthy foreigners. Why on Earth do we want to subsidize their experience on American land?
All of this is to say, that even if we need parking lots, the government should nationalize them all, and progressively distribute all profits. Sure richer people will drive more, but that should be offset by extremely progressive distribution of profits. All urban streets should be converted into public toll roads – preferably with a monthly pass that is proportional with the exponential of car size.
In the long run, demand for paved roads and parking will fall which will allow efficient entrepreneurs to build office space and public entertainment. Something actually good for society.
This also frees space for buses, which are a sadly under appreciated form of public transportation.
It’s become vogue for us liberals to hate on Goldman Sachs. But at least these guys, ostensibly, add value and provide crucial services. That idiot who owns a parking garage does not. Rents exist: socialize them.