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The equity implications of minimum parking requirements

Transportblog’s written at length about the economic harm caused by minimum parking requirements (MPRs). By requiring every new development to adopt a “one size fits all” to parking provision, MPRs consume expensive land, drive up costs for businesses and households, and encouraging more congestion and less use of public transport, walking, and cycling.

Of course, even in the absence of MPRs many businesses and households would want to provide parking. But others might not. Different people have different needs and desires, and a one size fits all MPR doesn’t respond well to that.

Fortunately, many New Zealand cities are starting to cut back on MPRs. In Auckland, the proposed Unitary Plan removes them from town centres (following on from the highly successful removal of MPRs from the city centre in the late 1990s) and the higher-density residential zone. But it’s still leaving them in place in most residential zones, which cover the majority of the city.

Is this a good idea? One could argue, I suppose, that MPRs in residential zones won’t be very costly because the households living in these areas will all own cars and will therefore all want parking. This argument is a bit circular – if it were true, it would actually mean that there is little need to have MPRs. But is it true?

In order to find out, I took a look at Statistics NZ’s data on household car ownership from the 2013 Census. Every Census, Stats NZ gathers data on the number of cars owned by each household throughout the country. This data can give us rich insights into the demographics and location of Auckland’s car-free households.

Here’s one look at the data. I’ve broken down Auckland’s approximately 470,000 households by the number of cars that they own. As you can see, the vast majority of Auckland households own cars. This is a costly proposition, but frequently a necessary one due to Auckland’s under-investment in frequent public transport and safe walking and cycling options.

But let’s not look only at the mean: the variance is equally important when considering the impact of planning regulations. Approximately 33,500 households, or 7.6% of all Auckland households, own no cars. (My household falls into this category – three people, zero cars.) MPRs will require car-free households to buy parking spaces or garages that they don’t need. Sure, it’s possible for them to use garages for storage or workshop space, but it would be better to have another bedroom (or a smaller, cheaper dwelling) instead.

Car-free households face a double budgetary whammy from MPRs. Because they require retailers to over-provide parking, parking costs are bundled into the price of everyone’s merchandise rather than charged directly to drivers. This means that every time someone who doesn’t own a car goes to the supermarket or mall, they are effectively subsidising people who drove there.

Auckland household car ownership chart

In short, MPRs can be costly for households who don’t own cars. When considering the effects of this policy, it’s necessary to ask: Can those households afford to bear those costs?

Here’s some relevant data from the Census. It shows the share of households in each income band who don’t own cars. Almost all high-income households own cars, but a large share of low-income households don’t own cars. Almost one-third of households earning less than $20,000 and one-fifth of households earning between $20,000 and $30,000 own no cars.

Overall, two-thirds (66.7%) of car-free households earned less than $50,000 a year. For comparison, Census data shows that the median household income in Auckland was $76,500 in 2013. Car-free households are overwhelmingly concentrated in the bottom quartile of the income distribution, which means that MPRs are a sharply regressive policy. They impose high costs on the people who are least able to pay, while having few effects on high-income households.

Auckland share of households with no cars chart

Finally, it’s worth taking a look at the geographical distribution of Auckland’s 33,500 car-free households. One of the ways in which households can avoid the costs of car ownership is to live in places which offer other ways of getting around or good proximity to jobs, shops, and amenities.

I’ve put together a quick map showing the number of car-free households in each Auckland area unit. Dark blue shows areas with more car-free households, while yellow shows areas with few car-free households. A few things pop out from this map. The first is that the largest concentrations of car-free households are in the city centre – fewer than half of city centre households own cars. This is not surprising – it’s costly to warehouse cars downtown and easy to get by without one.

But don’t let that fool you: car-free households are distributed widely throughout Auckland’s urbanised area. Only 16% of the region’s car-free households live in the city centre. Many, many more people are living without cars in west Auckland, south Auckland, the isthmus and even the North Shore. Orewa has a surprisingly large number of car-free households due to its status as a retirement community.

Auckland car-free households map

Because car-free households are living more or less everywhere in Auckland, the blanket application of MPRs in residential areas is likely to be inappropriate. And, because low-income households are more likely to own no cars, MPRs will tend to be heavily regressive. It’s a policy that many Aucklanders simply can’t afford.

Fortunately, it’s possible to imagine and implement better policies. As Transportblog has consistently argued, we can:

  • Let people make up their own mind about parking – if they don’t want it, don’t make them buy it!
  • Give people better transport choices by providing frequent, reliable public transport services and safe walking and cycling options – in other words, give them the choice to go without a car
  • Make it easier for people to live in areas where they don’t need cars, and make it easier for people to “retrofit” underperforming car-based places like Manukau centre.

What do you think about the equity impacts of MPRs? Do you think we could do things better?

65 comments to The equity implications of minimum parking requirements

  • Early Commuter

    I think there’s an additional point worth considering, however. Please note I also don’t see the point in MPRs but it’s complex.

    If you remove MPRs, complexes are built without carparks. However, residents of those complexes may still own cars. They may then utilise the common space (roadside parking). In that situation, an unfair share of the commons will be utilised by those people – basically a “free rider” scenario – I paid $xx for an off street park, you paid $0, we both get a park but mine is paid for by myself whereas yours is subsidised by my (and your!) rates.

    While it’s not a strict analogy I live on a street with limited on-street. There is not a fair distribution of the commons amongst households.

    One solution might then be to ban free on-street parking so that the minimum annual cost is the same as that to provide an offstreet carpark.

    • Cargill_Street

      If the situation arises where all the residents in a neighbour chooses to free ride because they are too cheap to buy a dwelling without a car park but still own a car, then the streets will inevitably be clogged with cars parked on the street. If this is perceived to be an issue, then you’d move to paid parking permits open to anyone for the right to park on that street.

      • Phillip

        “people who buy a house with no car park but own a car are cheap? ” WOW…. you cant get any more anti-car (and completely unrealistic) if you tried

        • Cargill_Street

          I retract the word ‘cheap’. However, under a scenario with no residential MPR, car owners who choose to live in a dwelling with no parking or isn’t willing to pay for on-site parking would be free to do one of the following:
          1. park on the street for free (free-riding until demand gets to a point where you need paid permitting, à la St Mary’s Bay)
          2. Pay for parking elsewhere for a fee that may be lower than the cost of on-site parking

          So without residential MPR, car owners have more freedom to choose how they wish to store their car and potentially at a cost that is lower than the value of land used to house a parking space or a garage, that was enforced under a residential MPR.

      • Well so what, people in favour of parking minimums are just saying “you have to build more parking and not park on the street, so there is room for me/my guests to park on the street, because I don’t have enough parking of my own and I want it free”.

        Who gives a shit?

    • Max

      You can deal with a lot of aspects of that scenario by making all or most on-street car parks time-limited. Like, say, 180 minutes. Keeps car parks free for visitors, couriers etc…

      Alternative option is a resident’s parking scheme, with the apartments / houses built with zero parking not having a right to a permit (this already indirectly a rule for resi parking schemes in the current state – buildings with newer consents have no right to permits).

  • GS

    A similar point to Early Commuter, but even if you (well, may be not you, but another car free person) were to build a house, you’d likely want to include car space anyway for marketability purposes when you decide to sell. Selling a house with a garage or other parking space is likely to be much easier (since it appeals to the 92% of people with cars, who also are more likely to be rich) than without a car space. Of course, it could be well-designed and multi-purpose (every show home uses the garage as a reasonably nice office space, and presumably converts back to a garage pretty quickly, one near where I live has sliding ranch doors instead of a garage door, but quickly convertible) – but still parking space.

    But, in many ways, this again points that it doesn’t need to be regulated. The market will, or will not, provide as appropriate

  • Max

    Good article and some good data – wish I’d had that for when I spoke to the Unitary Plan panel in support of lowering resi parking minima for IPENZ Transportation Group, some 2 weeks ago.

    • Phillip

      does IPENZ support the reduction of parking minimums?

      • Max

        Yes. We, the Auckland/Northland branch of the IPENZ Transportation Group – which is a technical group representing several hundred mostly-Auckland-based transport professionals – do support a reduction to 1 car park minimum / residential unit in all cases and to 0 minimum where the Unitary Plan already envisages that.

        Since we represent a broader profession with a variety of views, we did not support the whole-sale abolishment of parking minima – but we certainly agree that the PAUP is heading the right way.

  • Adam W

    I read with interest all that is written on TransportBlog as such I am not often surprised with what is written, but the excellent data in this article on min parking is a real eye opener. The fact that so many people at 7.6% don’t have cars is a real surprise, and the impact this has on lower incomes is simply shocking.
    This is the type of fact the organisations that work in supporting low incomes families should really know about. It’s one thing for them to potentially ‘know’ but to have cold hard facts supported by the census is another ball-game.
    As to the comment by ‘Early Commuter’ – having lived in England where there are hundreds of town houses with no garage’s in large parts of the country, especially in the large suburbs of London – it is simply not a problem in the real world. People adapt, they park on the street near there house and there is no drama. This is on top of the fact that the roadway is a public good which is paid for my general rate payers.

  • John Mackay

    The first two comments eventually come to the right conclusion – let the market decide! Are carparks such a deprived element of our community that they need the nanny state to force us all to provide one, even if we don’t want to use it?

    The point about Orewa (and Browns Bay, Milford, Devonport, etc) is that they are healthy full-service town centres unthreatened by out-of-centre retail, so they act as magnets for wealthy older people (though not necessarily high-income) who seek a good-quality car free lifestyle. If we could make it so that a wide range of centres had no MPRs and were protected from losing their supermarkets to out-of-centre retail, then we might see a surprising move to intensification and affordable housing for old and young, rich and poor. If it can happen in the city centre and Newmarket, why not Papatoetoe and Pukekohe, Northcote and Onehunga?

    The map is fascinating, Peter. Would it change significantly if it showed percentage of car-free households rather than absolute numbers?

    • mfwic

      Good points John. Maybe we could let the market determine the level of urban design as well? You know, where people value good design they will pay for it and where they dont value it they could have a cheaper development? (to avoid misunderstandings I am laughing while I type this)

      • FraserC

        Couldn’t agree more!

      • Sounds like you want more Symonds Street towers or Hobson Street slab blocks? You know, lots of engineer-type standards-based district plan compliance stuff, and pants-all consideration of unmeasurable, wishy-washy “design”, whatever that is. Just what Auckland needs more of I say, bring it on.

      • John Mackay

        I was sure you’d be laughing, friend dmfwic. And I’d be the first to admit that urban designers can be over the top. But what is different about the minimum parking rules is that they require owners to build large areas of dimensionally demanding floorspace, for which they may not have any need. Most of the other development control rules are about preventing over-development – maxima, not minima.

    • Peter Nunns

      Looking at percentages of households without a car produces a very similar map, as area units are (roughly) standardised on population. I chose to show the absolute number as it’s probably a bit easier to interpret at a glance. Most area units in the urbanised area had 4-14% of households without cars.

  • Peter H

    Here is map showing spread of car free house holds in Hamilton.
    http://hamiltonurbanblog.co.nz/?s=car+free

  • FraserC

    I have written about the case for abolishing MPRs on retail activities in centres. You can read more about it here.

    https://hearings.aupihp.govt.nz/online-services/new/files/GbJHbwWidUCcP8B8ZPxNshfzh5FAgkOJGUgwFh08MCGb

    • Peter Nunns

      I read it a while back, alongside Stu Donovan’s evidence. Frankly, I wasn’t impressed by the arguments you were making. You did not convincingly establish that there are any large market failures that would (a) lead to the underprovision of parking relative to the socially optimal level and which (b) could not be managed better by other parking management policies that AT is currently implementing.

      The strongest part of your evidence was your discussion of retail parking and peak congestion. However, at best that established that retail parking is associated with few _negative_ externalities. This is not sufficient basis for regulating to require people to provide parking.

      Finally, part of your argument seemed to boil down to “my clients have a good understanding of their parking needs, but their (potential) competitors are idiots”. Again, not a sufficient basis for regulation!

      • FraserC

        The corporate evidence was pretty compelling around the market failures, and the panel certainly didn’t challenge any of it…

        • Matthew W

          The failure is your clients wanting to give away free parking to their customers and not have to go to the trouble of making sure noone else uses them. Its a bit like a bakery giving away free loaves of bread for anyone who buys some pies, but instead of giving it to them at the counter, they just leave the bread outside the front door with no surveillance, and then complain that passers-by going to other shops are taking their bread. And the solution – make everyone give away free bread!

    • Matthew W

      Holy heck Fraser. Are you an economist? Have you heard of markets? I just briefly swimmed through your submission and found no discussion of the ability to use market prices to manage parking demand. You talk about parking requirements and car trips as if they are an irrepressible force of nature.

      Honestly I am surprised that a professional economist could be found to defend MPRs.

      • Matthew W

        …And very quickly I see Stu Donovan picked up this rather bizarre omission:

        “Mr Colegrave does not explain why the demand for parking is being measured at a zero price. From an economic perspective this assumption is highly unconventional. It implies we are interested in the point on the parking demand curve which is characterised by price = 0. As an economist, it is not clear to me how or why the socially optimal supply of parking could be determined from observations of the demand for free parking. In making this critical assumption Mr Colegrave eschews widely accepted microeconomic concepts of supply, demand, and price. “

    • Err Fraser, I’m no economist but you look like you’re way out on a limb there all by yourself supporting parking minima. Here’s Morgan:

      https://garethsworld.com/blog/environment/one-dumb-regulation-is-driving-up-the-cost-of-your-house-and-your-flat-white/?utm_source=Gareth-Morgan&utm_medium=Twitter&utm_campaign=general-content

      Looks like a classic mad market distortion to me.

  • Kelvin

    MPR should be exempt if the property is within walking distance to major train and bus stations.

    Also if the area needs car parks desperately, I am sure wilson and tournment will find a business case to build one there.

  • FraserC

    That is the beauty of invoking the RDA process for developments that don’t meet the MPRs. All these issues can be considered on a case by case basis.

    • Max

      The default is enormously important though, not only to show what your city’s preferred approach is – do you:

      a) Set minima high, and allow someone to seek an exemption? Then most will simply build that extra car park, rather go through the cost and expense and uncertainty of getting it reduced. As a professional consultant I should like this – gives me work in terms of doing parking surveys, research and report writing (I once achieved permission for a 90% shortfall!) – but I’d rather live in a workd of…
      b) Set low minima, and potentially even maxima, and only require applications that go outside of these two bounds to go to the trouble of seeking a consent exemption.

    • Peter Nunns

      And they _wouldn’t_ otherwise be considered on a case-by-case basis in the normal development process? I find that hard to believe.

      You could extend the same logic to just about anything: “Retailers should seek restricted discretionary resource consent before ordering a new flavour of ice cream, just to ensure that they’ve considered the market on a case-by-case basis.” “Businesses should get an RDA consent before hiring new staff.” Etc, etc.

  • FraserC

    Agreed, and the 33% reduction recommended by the key retailers represents a good compromise (IMHO)

    • Max

      Explain please? From what to what?

    • Stu Donovan

      If people would like some detailed commentary on Fraser’s evidence then they may also wish to read my rebuttal evidence, which is available online here: https://hearings.aupihp.govt.nz/online-services/new/files/6h8W7B5ddLBXLjJqfnUyoOLwvjXcs3dGMuRfhfQwQ06h

      My rebuttal is quite long, because Fraser’s evidence is, in my view, incorrect or unsubstantiated on all important issues.

      It’s also worth noting that the panel’s preliminary guidance on viewshafts does not bode well for Fraser’s position on MPRs, nor any other provisions which seek to constrain density/development. More specifically, this preliminary guidance states that because the legacy district plans pre-date both the 2013 RMA amendments (especially economic benefit/cost analysis) and the Auckland Plan’s strategic direction (for a compact urban form), then these legacy plans are not a strong evidence basis for PAUP policies. This is especially true where a policy position would have the effect of constraining development in the existing metropolitan urban area, e.g. viewshafts (and MPRs for that matter). In such situations, the panel has asked for economic benefits and costs to be quantified.

      If the panel was to apply this approach consistently across other topics, then proposals to retain provisions found in legacy plans which are unsupported by benefit/cost analysis might not be particularly persuasive. I discuss the RMA amendments, the panel’s preliminary guidance, and potential implications for the Unitary Plan in a forthcoming post that is scheduled for Thursday morning. Look forward to hearing people’s views then!

      • FraserC

        This could get fun.

        • Stu Donovan

          Meh, it’s now a process that is largely out of our hands. Definitely not interested in a public debate via the blog – such discussions are much more fun over a beer :). I might post on MPRs once the panel’ recommendations are made public, but probably not before … if you’d like a guest post let us know.

          For now I would define “fun” as getting engaged to my fiancee (which I did last week!), and moving to Amsterdam to study for a PhD in economics (which I will do in a fortnight!).

          Go well.

          • Fraser

            Fair enough. I was quite disappointed that the panel didn’t ask me any questions about your EIC or rebuttal. I had so much material prepared, but their lack of interest said it all. Even shepherd had no interest in your numbers, which surprised the chair.

            Good day, sir.

            p.s. I can send you the list of detailed flaws in your analysis at some point if you want to see them. There really are a lot.

          • Stu Donovan

            Hi Fraser, just quickly:

            1. I’m not going to be drawn into speculating on what the commissioners may or may not think about MPRs, or the evidence. Time will tell on that front.
            2. It’s a shame you didn’t submit your comments during mediation, which would seem to be the appropriate forum? But yes of course feel free to send them through.
            3. In my experience it is easier to criticise someone else’s economic analysis than it is to present your own alternative analysis.

          • Kidrubolit

            Congrats on both counts Stu. How long between flight arrival and bike acquisition?

          • Stu Donovan

            Thanks! I’m guessing 3 days maximum?!?

          • Two very good choices.
            But. You’re shipping a bike to Amsterdam? Eh?!

    • John Mackay

      By “the key retailers” you mean the KEY RETAILERS GROUP, a consortium of the two supermarket chains and three or four other big box retailers, who are spending up to $60k a week on expensive lawyers and consultants in pursuit of their freedom to build big retail sheds on arterials and elsewhere outside town centres, but want to deny freedom for a small shopowner to build an office or apartment above the shop without building extra carparks.

      Now why would that be?

      if a small property owner in a town centre wanted to intensify, it’s often physically impossible to provide the extra MPR carparks – as per my evidence in support of Luke and Gen Zero – https://hearings.aupihp.govt.nz/online-services/new/files/3iC0peM03U0WHrzdsVluS3hcEKTlqlaIzcjskPeOgF3i

      • Fraser

        hence the RDA process…

        • stu donovan

          A wise economist once told me over a glass of wine that appealing to the ease with which a regulation can be circumvented is the last bastion of poor policy making.

          • John Mackay

            Hence, as dmfwic has already said, “that’s why we call it town planning, not town economics.”

            But here in NZ we actually don’t – we call it Resource Management. And it’s certainly not rational planning as practised in places like Amsterdam.

            Make sure you keep on the Transportblog from there.

          • Fraser

            Sounds like you’re spending too much time drinking beer and wine, and not enough time thinking about the issues properly :-p

          • Stu Donovan

            Another wise economist once told me over a glass of whiskey that good economists don’t judge other economists’ preferences.

  • FraserC

    Its all explained in my evidence, which I have linked above 🙂

  • Given that the Unitary Plan Hearings Panel has just heard the Transport Topic earlier this month which included Minimum Parking Ratios wouldnt it be more prudent to wait and see what Judge Kirkpatrick comes out with as their recommendations to Council?

  • mfwic

    If we leave it all to economists then wealthy people will have parking, daylight, quiet and privacy and poor people will have no parking, shade all day, noisy businesses next door and neighbours 1 metre away looking in their windows. There is a reason we call it Town Planning and not Town Economics.

    • Peter Nunns

      I’m not sure that regulating to require people to buy things they can’t afford is actually good for them.

      I’m also concerned about social equity – I’d rather live in a country (and world) where everyone has enough to live a decent life. However, I would strongly prefer to address inequities more directly, by giving poor people more money and letting them figure out how best to spend it. While the added taxes needed to fund that would be somewhat distortionary, they’d be less distortionary than complex regulations and subsidies for individual products.

      • Early Commuter

        Giving poor people more money (or any people more money) just reinforces the capitalist system.

        • Max

          Funny that capitalists cry poor every time it’s mentioned then! Forgot the lessons of Ford. Or (more gloomily, the lessons of Bismarck).

          • Early Commuter

            The obvious solution is to nationalise all parking and ration it according to contribution to the national good.

          • Darius

            We’ve already done that. The factory (city) shall produce car parks according to the plan, no less than the plan, and with no regard for whether they are needed. Very Soviet Union (if dressed up in capitalist clothes, by making the private industry provide them from their chequebook).

  • buttwizard69420

    What I want to know is how many at the lower socio-economic end are forced to own 3+ cars per household.

    • Max

      Probably quite a few, as cheaper residential areas tend to be those that are less central, more at the edge – and thus (causally or coincidentally or often both) are less likely to have good walking, cycling and PT.

      • buttwizard69420

        There are plenty of central areas that don’t get the investment they need. Glen Innes is a classic. It’s singled out as soon to be a high growth area, and there are attached units being built with no car parking on Apirana Ave, but if you’re a resident you’re more likely to park on the street than just make use of the run-down bus stops in the Town Centre or the train station which is like something out of Fury Road.

  • Dan C

    What are the residential parking minimums in the unitary plan?

    I currently have no off street parking. I want to excavate one park. Is that allowed or do i need more?

    • Darius

      The unitary plan is not in force, and won’t be for a year or two more. So you’re under legacy District Plan rules now.

      Also, unless you are in some very narrow zones (town and city centre, basically), you will always be allowed to ADD car park. This is primarily about whether somebody forces you to (for a new building) provide a minimum of car parking.

      • Thought that it might be one of those things like the wiring in a house where old shit is ok if left untouched. But once u touch it you have bring it up to current standard. So sorry john, you off street parking plans failed consent because they dont met the minimum two cars off street parking std.

  • John

    Minimum parking requirements are a serious imposition on people’s right to use their private property as they fit. What is the market failure that requires regulation? I looked for the answer in FraserC’s linked submission (quotes show Fraser’s arguments, paraphrased):

    1. ‘Most shopping trips are by car and likely to remain so, and most of these trips are off peak.’ True, but irrelevant.
    2. ‘Removing MPRs is likely to lead to a wholesale undersupply of parking spaces relative to demand in centres’.
    – Evidence? Why aren’t developers and businesses capable of deciding what the best balance of floor space and parking space is for them? (subject to 3 below).
    – In any case, ‘undersupply’ is an incoherent concept if you don’t consider, ‘at what price?’. At a price of zero, demand for anything will exceed supply. So what? There’s no reason to think that the economically optimal supply of parking can be determined from observing the demand for free parking.

    [to be continued, as my browser only allows short comments]

  • John

    3. ‘Smaller businesses might freeload off the free carparks of bigger neighbours.’
    – Might, might, might… evidence that this is in fact a problem serious enough to warrant regulation?
    – Then the bigger neighbours need to manage their property better. For example, if they charge for their own carpark, they can think of the carpark as a separate business, then they won’t mind who parks there. They can refund the charge to their own customers if they wish. They have no right to demand that everyone else should be forced to provide car parks just because they have problems managing their own. Matthew’s analogy of the bakery seems quite appropriate.
    4. ‘Anchor businesses might then seek out sites away from the freeloaders, which would undermine the centres policy.’
    ‘Might’ again – a speculation built on a speculation. Contrast John Mackay’s link to examples of actual development proposals in centres, that are stymied by MPRs.
    I would agree in principle that points 3 and 4 could be problems worth the attention of public policy, given that there is a centres policy. The issue is whether in fact they are serious enough problems to warrant regulation, considering the other detrimental effects of MPRs.

    • Fraser

      John, you should have come along to the hearing where all these issues were discussed at length. I am not going to comment any further here until the decision is released. Suffice to note that the panel had almost no questions about my evidence, which basically means they accepted it outright. The same certainly could not be said of the economic evidence provided by the Council.

      Further, please note that my evidence ONLY looked at the case for MPRs on retail activities in centres, and nothing else.

      Thanks

      • Because, presumably you were hired to do so? Which is fine, but what I don’t get is you still try to plug your illogical and flawed arguments here. That the commissioners may or may not have bought your speculations does not constitue a refutation of John’s reasoned analysis above.

        The key reason your clients want MPRs is because they freeze out competition. They mean no entrant into the market can try a lower cost model, at any scale. It is monopolistic, anti-competetive, and not in the communities interest. And all of the suggested possible negative outcomes from a failure to have a regulated parking oversupply are either trivial or solvable by other means.

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