If You Don’t Hate Parking Lots, You Should

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.

  1. Henshaw said:

    In the long run, demand for paved roads and parking will fall.

    Why will they fall? Unless there’s a major shift there will be more automobiles on the road in the coming decades. More cars means more parking and more roads.

    Nationalizing parking lots is terrible idea.

  2. First of all – agree, endorse, amen.

    Secondly – enjoy Philly! As a native of NY and a resident of DC, it is practically treasonous for me to say so, but Philly is probably the most delicious American city west of the Mississippi river (though not the most diverse in terms of ethnic/national origin). The most delicious in the country is of course San Francisco, but Philly may beat it for overall dollar value. Nothing, though, beats Montreal. Nothing.

    • Yes… The food has been fantastic here so far, even for vegetarians!

  3. This idea is interesting… though I would note that in practice, when the government owns parking facilities, it tends to underprice them.

    • That’s absolutely true! As I noted “For this reason, public parking for which the price is undervalued can be just as bad: it disproportionately benefits those who already own cars.”

      Still, once the government owns land for which the variable cost of negligence is low, it must maximize its revenue for the public’s good (and distribute it fairly). A low price, after all, would indicate a low demand for cars and thriving public transportation.

  4. Edit: why not just tax parking lots instead?

  5. enrique said:

    “Goldman Sachs adds value …” Very funny

  6. ‘But private parking is also a socially inefficient good, as it is a de facto tax on public transportation. ‘

    Wow, this may be a new low in logic for you. Private parking, with payment, is actually more like a subsidy TO public transportation.

    You might also ponder why you ‘needed’ a car, as well as a place to park it. Why didn’t you just take trains and buses?

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