The sample size is very small, but for what it’s worth, there are some/many people who believe that urban parking spaces will become more valuable in the future.
This is a reasonable assumption.
Over the last couple of decades here in Toronto, I would guess that parking ratios for new multi-family developments have probably fallen by more than half. It used to be that you had to build 1 to 1.5 parking stalls for each unit and now we seem to be sitting somewhere close to 0.5. Although, there are also exceptions and some projects today are getting built with no parking.
The sample size is very small, but for what it’s worth, there are some/many people who believe that urban parking spaces will become more valuable in the future.
This is a reasonable assumption.
Over the last couple of decades here in Toronto, I would guess that parking ratios for new multi-family developments have probably fallen by more than half. It used to be that you had to build 1 to 1.5 parking stalls for each unit and now we seem to be sitting somewhere close to 0.5. Although, there are also exceptions and some projects today are getting built with no parking.
So given that the supply side of urban parking spaces seems to be getting constrained and many cities are actively trying to encourage other forms of mobility, it’s not unreasonable to believe that parking stalls will only become more valuable. That’s why a new underground spot in Toronto might cost you $60,000 today and why some spots in New York can even fetch a $1 million.
But this assumes that the demand for parking will remain more or less the same. What if it doesn’t stay the same? What if we were to experience a tipping point that rearranged urban mobility? What if the cost of driving became so high that people stopped driving at scale? In these scenarios, the demand side of the equation would change.
If you’re a regular of this blog, you probably know what I’m going to say next. But already I can think of two innovations that would contribute to the above scenarios: Uber and driverless cars.
Uber’s goal is to continually drive down the cost of transportation and eventually get you to no longer own a car. They know very clearly that the demand for transportation services is highly elastic and that the cheaper they get the more you will use them. And the way they get cheaper is by continually increasing the utilization rate of their drivers/cars. An idle driver/car is the enemy.
Of course, the other way to drive down fares is to remove the driver all together. And once you’ve done that, there is, in theory, no reason that a car should ever sit idle – like they do today. (The utilization rate for my car is around 2%.) And if a car is never sitting idle, then why would you ever need to park it? Certainly you wouldn’t need to park it as often as you do today.
All of this isn’t going to happen tomorrow, but I believe – despite the supply constraints – that we are going to end up with excess parking spaces in our cities. And that will mean that they are going to be perceived as less valuable than they are today. I also believe that it will eventually seem silly to drive your own car.
City Observatory recently republished their commentary on a report (released earlier this year) called Who Pays for Roads. I missed their original post, so this is new to me.
The report and commentary are all about the mispricing of roads/driving and the fallacy that “user fees” (gas taxes, tolls, and so on) are enough to completely cover the costs associated with driving.
I have been a vocal supporter of road pricing and/or congestion charges here in Toronto, and so I’d like to share two pieces from their commentary.
The first is this paragraph, which talks about how mispricing leads to demand issues (i.e. traffic congestion):
The conventional wisdom of road finance is that we have a shortfall of revenue: we “need” more money to pay for maintenance and repair and for new construction. But the huge subsidy to car use has another equally important implication: because user fees are set too low, and because, in essence, we are paying people to drive more, we have excess demand for the road system. If we priced the use of our roads to recover even the cost of maintenance, driving would be noticeably more expensive, and people would have much stronger incentives to drive less, and to use other forms of transportation, like transit and cycling. The fact that user fees are too low not only means that there isn’t enough revenue, but that there is too much demand. One value of user fees would be that they would discourage excessive use of the roads, lessen wear and tear, and in many cases obviate the need for costly new capacity.
And the second is this chart, which shows the cumulative net subsidy to highways in the US from the late 1940’s:
I was speaking with a friend this morning and he told me that he had a Pavlovian association between me and laneways. That made me happy.
If you’re a regular reader of this blog, you’ve heard me go on and on about the great potential of laneways and laneway housing (accessory dwelling units) in Toronto, as well as in other cities around the world.
The report is obviously about Toronto, but there’s no reason that the lessons and ideas won’t also apply to your city. So I would encourage you to give it a read.
For those of you who have emailed me about my own laneway house, the project is still on hold. And it will likely remain that way until the city becomes a bit more accepting of this housing typology. Hopefully that will happen soon.
So given that the supply side of urban parking spaces seems to be getting constrained and many cities are actively trying to encourage other forms of mobility, it’s not unreasonable to believe that parking stalls will only become more valuable. That’s why a new underground spot in Toronto might cost you $60,000 today and why some spots in New York can even fetch a $1 million.
But this assumes that the demand for parking will remain more or less the same. What if it doesn’t stay the same? What if we were to experience a tipping point that rearranged urban mobility? What if the cost of driving became so high that people stopped driving at scale? In these scenarios, the demand side of the equation would change.
If you’re a regular of this blog, you probably know what I’m going to say next. But already I can think of two innovations that would contribute to the above scenarios: Uber and driverless cars.
Uber’s goal is to continually drive down the cost of transportation and eventually get you to no longer own a car. They know very clearly that the demand for transportation services is highly elastic and that the cheaper they get the more you will use them. And the way they get cheaper is by continually increasing the utilization rate of their drivers/cars. An idle driver/car is the enemy.
Of course, the other way to drive down fares is to remove the driver all together. And once you’ve done that, there is, in theory, no reason that a car should ever sit idle – like they do today. (The utilization rate for my car is around 2%.) And if a car is never sitting idle, then why would you ever need to park it? Certainly you wouldn’t need to park it as often as you do today.
All of this isn’t going to happen tomorrow, but I believe – despite the supply constraints – that we are going to end up with excess parking spaces in our cities. And that will mean that they are going to be perceived as less valuable than they are today. I also believe that it will eventually seem silly to drive your own car.
City Observatory recently republished their commentary on a report (released earlier this year) called Who Pays for Roads. I missed their original post, so this is new to me.
The report and commentary are all about the mispricing of roads/driving and the fallacy that “user fees” (gas taxes, tolls, and so on) are enough to completely cover the costs associated with driving.
I have been a vocal supporter of road pricing and/or congestion charges here in Toronto, and so I’d like to share two pieces from their commentary.
The first is this paragraph, which talks about how mispricing leads to demand issues (i.e. traffic congestion):
The conventional wisdom of road finance is that we have a shortfall of revenue: we “need” more money to pay for maintenance and repair and for new construction. But the huge subsidy to car use has another equally important implication: because user fees are set too low, and because, in essence, we are paying people to drive more, we have excess demand for the road system. If we priced the use of our roads to recover even the cost of maintenance, driving would be noticeably more expensive, and people would have much stronger incentives to drive less, and to use other forms of transportation, like transit and cycling. The fact that user fees are too low not only means that there isn’t enough revenue, but that there is too much demand. One value of user fees would be that they would discourage excessive use of the roads, lessen wear and tear, and in many cases obviate the need for costly new capacity.
And the second is this chart, which shows the cumulative net subsidy to highways in the US from the late 1940’s:
I was speaking with a friend this morning and he told me that he had a Pavlovian association between me and laneways. That made me happy.
If you’re a regular reader of this blog, you’ve heard me go on and on about the great potential of laneways and laneway housing (accessory dwelling units) in Toronto, as well as in other cities around the world.
The report is obviously about Toronto, but there’s no reason that the lessons and ideas won’t also apply to your city. So I would encourage you to give it a read.
For those of you who have emailed me about my own laneway house, the project is still on hold. And it will likely remain that way until the city becomes a bit more accepting of this housing typology. Hopefully that will happen soon.
The point of all this is that when you subsidize something it’s because you’d like to see more, not less of it. So why then are we even surprised by the crippling traffic that plagues our cities? We are doing a lot to encourage exactly that.
The point of all this is that when you subsidize something it’s because you’d like to see more, not less of it. So why then are we even surprised by the crippling traffic that plagues our cities? We are doing a lot to encourage exactly that.
