03
Apr
13

Free isn’t Free. Mobility Needs, Rights and Privileges Pt 4

Continuing on this train of thought, building on my previous notions that transportation, its funding and pricing structures should provide the greatest benefits to the greatest number of people and ought to price higher self-actualizing behaviours on a progressive scale, I’ll turn to externalities both negative and beneficial of various transportation choices.

In terms of external costs, those of single-occupant vehicles are perhaps the most externalized with the least benefit accruing to society as a whole. The benefits of cars and personal mobility are conversely limited when we fail to put a price on the externalized costs of choice. In other words, since many of the costs are external to a driver (costs of pollution for air quality and water run-off, traffic-related policing and health-care, extra road widths to accommodate parking, poor land-use due to lack of sharp pricing signals) drivers are very much subsidized. This is compounded by the presence of flat fees associated with ownership and licensing of a vehicle. Once paid for, most users will use a good more, to get the highest return on investment possible – in terms of cars, owners want to pay the least per kilometer charge possible. While distance driven is factored into insurance pricing, it is not a very sharp or significant saver and has nothing to do with which roads are driven on, and at what time of day – which can change risk.

One of the greatest invisible subsidies involved with driving, that by Donald Shoup’s estimation accounts for anywhere from 1-4% of the US GDP, is the subsidy for parking, much of which is used for ‘free’ by drivers and absorbed by everyone else through increased prices for housing, goods and services. Shoup estimates that every single American pays something close to $3000 annually in parking subsidies. If a government suggested a program that we all pay an extra $3000 in taxes so that drivers could park for free, we’d go nuts but we actually not only live with this system, some people ferociously defend it.

Part of the problem lies with zoning codes that were largely introduced on-masse in the 1950’s and 60’s and which had compounding effects over the years, meaning that suburbs built in the 2000’s were often required to have 3-times the developable land used for parking as were for the building being built. Restaurants for instance often require 10 spaces per 1000 sq feet of dining room space. Malls are built with ‘free’ parking based on the 5th busiest traffic day of the year because the belief apparently is that every person must shop at the same time and do so while parking for free – not being able to find a space and returning at a slower time is apparently not an option in our convenience-driven culture. Paying for good access to the shop you want to go to is also apparently a price politicians don’t think people can handle, bear or see as easier to pay than the hours lost cruising for a perfect spot.

There are any number of things from a perspective of ‘common good’ outcomes that would be more appropriate for higher subsidies with respect to capacity allocation and yet we currently subsidize something that benefits those who are able to pay, at the expense of those who can’t pay. The costs associated with parking also neglect to include the opportunity costs of providing parking – we lose park space, sidewalk space, funding for transit, funding for all kinds of things so that people who can afford to own and drive a car can do it as cheaply as possible.

Certainly widespread mobility has a benefit. Neighbourhoods are more stable since people can drive to a job that isn’t well-served by transit and we can locate harmful industrial uses further away from housing. However, the vast acreage of free parking means those who can’t even afford a car are thus less mobile. This is the concept of car dependence, where price not only is a foundational block for creating car dependence but a reinforcing factor that makes other modes of transport less viable. Why would someone leave a car at home when they practically need a bus to get from the front door of their apartment building to the bus stop? So we now see, in small communities, intense buildings being built further away from road frontages and further away from convenient transit stops. Instead of building on the underused land left from the accidental result of poorly priced transportation, we compound it by still requiring loads of parking which is often free or, when priced, results in complaints about pricing and/or the act of spillover parking – the solution to ‘spillover parking’ actually makes the situation worse.

Why we still believe that central planners can dictate to a private market the provision of their goods to the market is a bit of a mystery and one that most people don’t see as inefficient. Certainly, zoning ought to ensure the rational development of lands and planning is done to mitigate the impacts of the choices that private property owners make but it ought not to ‘control the means of production’, at least not in a capitalist economy. As odd or ‘red-scare bating’ as it might sound to suggest that we have a soviet system, that is the cold and harsh truth of our transportation networks. Planners plan how much parking (bread) should be made and largely how much the price should be regardless of the laws of demand and supply. In this instance, every property owner is required to provide parking regardless of demand. While I was with the City of Toronto I had the opportunity to see how many spaces existed in Toronto, particularly in rental buildings, that had gone unused for the vast majority of time the building existed.

If tenant advocates don’t believe that parking, and particularly free visitor parking, is a part of the cost that a tenant pays as part of their lease, if parking is not an isolated, stand-alone cost based on the use of parking, then we have a difficult time in discussing anything related to rents, land-values and subsidies. Why any tenant who never has a visitor, or who has visitors who arrive on foot, or by transit, should pay a portion of the cost for the provision of 15 parking spaces required by the municipality, while not having a place to lock their bike, or a lawn on which to enjoy a sunny day because of the amount of space required for a parking stall (7 feet x 20 feet = 1400 sq feet), is beyond my reasoning. I don’t suggest that landlords will gladly forgo rent in-lieu of new parking revenues but in an open market, these types of charging systems a) should reduce rents over time and b) provide tenants with more choice in the housing market, not less.

I pick on rental apartment buildings only because this issue is currently in front of Toronto Council, at least from what I’ve seen on Social Media. I know its not easy for politicians to tell people like it is and that many people will shout that white is black, even when it’s clearly white, it’s truly sad that such a basic concept of economics as ‘there are no free lunches’ is particularly lost on a vast majority of the population. I appreciate that individuals will face hardships but public policy is NOT about the individual but rather about the collective. Some people will pay more for parking and for roads if we price the system more rationally but that shouldn’t prevent us from making changes that ensure greater efficiency and give people more choice, not less.

I left politics because I’ve always been more a policy-purist than a position-marketer. In other words, I’d rather do the right thing than stay elected or sell a spin that I know to be untrue or at the very least, a position I know to be anecdotally-based rather than science/fact-based. Some visitors will have to pay more for parking when a landlord introduces parking fees. This disregards however the unseen benefits – those who will combine visits and reduce individual trips, those who will choose transit thereby reducing traffic and the ultimate more efficient outcome of the better use of land, enabling everyone to have better mobility on our common conveyance; our feet (or mobility-aiding device.)

If tenants are going to subsidize anything, perhaps it should be taxi-trips to/from transit stops and shopping stores, or bike parking, or better access to fitness equipment. But there is no possible way any rational, honest person can suggest that free visitor parking is an appropriate good to be subsidized by poorer, lonelier tenants. That’s a flawed argument that starts and ends in one’s own wallet.

Building on utilitarian goals, that all citizens should be given the tools to succeed, its easier to start seeing that hidden subsidies for car ownership are perverse and from a fairness viewpoint, ought to be eliminated.

When we talk about intensifying existing neighbourhoods, we often neglect to look at one of the quickest ways to do it and to reverse the trends that are harming home ownership prospects and keeping the poor poorly served. That mysterious way, is to start charging for parking everywhere (except private homes) and at all times of day to start recouping the costs of parking that we all currently pay whether we acknowledge it or stick our heads in the sand. Those who would ‘hug the poor’ seem to neglect the glaring fact that the poor don’t drive and those that do, are often forced to pay a high percentage of income on an unreliable, polluting clunker because transit, cycling and pedestrian infrastructure currently doesn’t present itself as a viable alternative.

Next up perhaps I’ll tackle why those who suggest that better transit is needed prior to the introduction of road pricing are wrong – mostly.

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