Residential parking costs and car ownership: Implications for parking policy and automated vehicles

Abstract

Residents are often offered on-street parking at a fraction of the market price which may cause excess car ownership. However, residential parking costs are difficult to observe, so we propose an approach to estimate implicit residential parking costs and then examine the effect of these costs on household car ownership. We apply our approach to the four largest metropolitan areas of the Netherlands. Our results indicate that for city centres, annual residential parking costs are around e1000, or roughly 17 percent of car ownership costs. Households facing a one standard deviation (e503) increase in annual parking costs own 0.085 fewer cars on average, corresponding to a price elasticity of car demand of about −0.7. We apply these estimates to gauge the impact of raising residential parking costs and the potential implications of automated vehicles.

Parking Prices and Availability, Mode Choice and Urban Form

“…On average, a typical car is driven only 5% of the time (Shoup, 2005). This means that cars spend 95% of their time parked on the street or in a parking facility.…”

“…Some evidence suggests that parking costs affect car ownership rates (Ostermeijer, Koster and van Ommeren, 2019) and that inexpensive or free parking is also an incentive for solo driving (Willson and Shoup, 1990;Willson, 1992;Hess, 2001;Shoup, 2005;Khordagui, 2019;Franco and Khordagui, 2019). When commuters are shielded from the cost of parking, they drive alone more often.…”

“…This implies that parking subsidies such as employer-paid parking, a popular transport fringe benefit in the United States and other countries, incentivises workers to drive to work alone over walking, biking or taking public transport17. In California, for example, approximately 95% of auto commuters receive free parking (Shoup, 2005). Employer-paid parking is common even in CBDs, where the cost to employers of offering free parking is much higher.…”

“…Employer-paid parking is common even in CBDs, where the cost to employers of offering free parking is much higher. One survey of the LA CBD found that 53% of auto commuters received employerpaid parking (Shoup, 2005).…”

“…The survey revealed the potential mode share benefits of such a programme. It found that the number of people who drove to work alone fell by 17% after cashing out, while carpooling, transport and active commuting increased by 64%, 50% and 33%, respectively (Shoup, 2005). Notes: Parking prices are in 2013 USD.…”