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The uneasy case for lower Parking Standards

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  • W. Bowman Cutter
  • Sofia F. Franco
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    Abstract

    Minimum parking requirements are the norm for urban and suburban development in the United States (Davidson and Dolnick (2002)). The justification for parking space requirements is that overflow parking will occupy nearby street or off-street parking. Shoup (1999) and Willson (1995) provides cases where there is reason to believe that parking space requirements have forced parcel developers to place more parking than they would in the absence of parking requirements. If the effect of parking minimums is to significantly increase the land area devoted to parking, then the increase in impervious surfaces would likely cause water quality degradation, increased flooding, and decreased groundwater recharge. However, to our knowledge the existing literature does not test the effect of parking minimums on the amount of lot space devoted to parking beyond a few case studies. This paper tests the hypothesis that parking space requirements cause an oversupply of parking by examining the implicit marginal value of land allocated to parking spaces. This is an indirect test of the effects of parking requirements that is similar to Glaeser and Gyourko (2003). A simple theoretical model shows that the marginal value of additional parking to the sale price should be equal to the cost of land plus the cost of parking construction. We estimate the marginal values of parking and lot area with spatial methods using a large data set from the Los Angeles area non-residential property sales and find that for most of the property types the marginal value of parking is significantly below that of the parcel area. This evidence supports the contention that minimum parking requirements significantly increase the amount of parcel area devoted to parking. JEL codes:R52, H23

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    File URL: http://fesrvsd.fe.unl.pt/WPFEUNL/WP2012/Wp564.pdf
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    Bibliographic Info

    Paper provided by Universidade Nova de Lisboa, Faculdade de Economia in its series FEUNL Working Paper Series with number wp564.

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    Length: 35 pages
    Date of creation: 2012
    Date of revision:
    Handle: RePEc:unl:unlfep:wp564

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    Related research

    Keywords: Parking; Land Use; Sprawl;

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    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. repec:ucp:bkecon:9781884829987 is not listed on IDEAS
    2. Mukhija, Vinit & Shoup, Donald, 2006. "Quantity versus Quality in Off-Street Parking Requirements," University of California Transportation Center, Working Papers qt727788bk, University of California Transportation Center.
    3. Small, Kenneth A., 1992. "Using the Revenues from Congestion Pricing," University of California Transportation Center, Working Papers qt32p9m3mm, University of California Transportation Center.
    4. Peter F. Colwell & Henry J. Munneke & Joseph W. Trefzger, 1998. "Chicago's Office Market: Price Indices, Location and Time," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 26(1), pages 83-106.
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    6. Edward L. Glaeser & Joseph Gyourko, . "Urban Decline and Durable Housing," Zell/Lurie Center Working Papers 382, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
    7. Shoup, Donald C., 1999. "The trouble with minimum parking requirements," Transportation Research Part A: Policy and Practice, Elsevier, vol. 33(7-8), pages 549-574.
    8. Shoup, Donald C., 2004. "The ideal source of local public revenue," Regional Science and Urban Economics, Elsevier, vol. 34(6), pages 753-784, November.
    9. Richard Arnott & Tilmann Rave & Ronnie Schöb, 2005. "Alleviating Urban Traffic Congestion," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012197, December.
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    13. Ihlanfeldt, Keith R. & Taylor, Laura O., 2004. "Externality effects of small-scale hazardous waste sites: evidence from urban commercial property markets," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 117-139, January.
    14. Edward L. Glaeser & Joseph Gyourko, 2003. "The impact of building restrictions on housing affordability," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 21-39.
    15. Grenadier, Steven R, 1996. " The Strategic Exercise of Options: Development Cascades and Overbuilding in Real Estate Markets," Journal of Finance, American Finance Association, vol. 51(5), pages 1653-79, December.
    16. A. Steven Holland & Steven H. Ott & Timothy J. Riddiough, 2000. "The Role of Uncertainty in Investment: An Examination of Competing Investment Models Using Commercial Real Estate Data," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 28(1), pages 33-64.
    17. Bento, Antonio M. & Franco, Sofia F. & Kaffine, Daniel, 2006. "The efficiency and distributional impacts of alternative anti-sprawl policies," Journal of Urban Economics, Elsevier, vol. 59(1), pages 121-141, January.
    18. Mary E. Deily & Wayne B. Gray, 1989. "Enforcement of pollution regulations in a declining industry," Working Paper 8912, Federal Reserve Bank of Cleveland.
    19. Sivitanidou, Rena & Wheaton, William C., 1992. "Wage and rent capitalization in the commercial real estate market," Journal of Urban Economics, Elsevier, vol. 31(2), pages 206-229, March.
    20. Shoup, Donald C., 2004. "The Ideal Source of Local Public Revenue," University of California Transportation Center, Working Papers qt3x03s541, University of California Transportation Center.
    21. Bowman Cutter IV & Autumn DeWoody, 2010. "Parking Externalities in Commercial Real Estate," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 38(2), pages 197-223.
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