Lessons from LA's 'Parking Guru' Spread Around the World

Professor Shoup, you’re retiring this June after 41 years of teaching at UCLA. One of your fans—Patrick Siegman of Nelson/Nygaard—has said, “Professor Shoup managed to make the apparently dry topic of parking economics and regulation not only worth studying, but compelling, fascinating, and at times, hilarious.” How did you choose “parking” as the subject of your life’s academic work?

Donald Shoup: I backed in! I started out studying land economics and noticed early on that parking is the single biggest land use in most cities. The footprint of parking is bigger than the footprint of housing, office buildings, or anything else.

Parking is also very mispriced. My inclination is to look at situations where the price of something is very different from the cost of producing it—in the wrong way. Parking is very expensive and the price is often zero. I thought that there must be some way to fix that situation.

Your genius was viewing parking as an economic issue—saying, in the words of that same admirer, that “the way we as a society handle parking is unfair, inequitable, economically damaging, environmentally destructive, and…truly ugly” in some places. Elaborate.

Yes. If you consider all the bad effects of the underpricing and see no rationale for it, there should be a way to make everyone better off.

The first thing I published about this was called “Parking Cash Out.” 95 percent of all commuters who drive to work in Southern California park free when they get there, usually at the employer’s expense. Free parking at work seems like a generous subsidy and it’s a tax-exempt fringe benefit. But it’s unfair because it gives a big subsidy to people who drive to work and nothing to everybody else. Employer-paid parking is an invitation to drive to work alone, and it greatly increases the number of people who do so.

Cities and the federal government say, “We want people to carpool, bike, walk, and avoid solo driving,” but we also give free parking at work and we make it tax-exempt.

To remedy this problem, I proposed “parking cash out”: If an employer offers free parking at work, that employer should offer the employee the option to choose cash in lieu of the parking subsidy. State law now requires employers of more than 50 people to offer parking cash out if they rent parking spaces from a third party to subsidize commuter parking.

I studied employers in Southern California who adopted this policy. It reduced solo driving by 17 percent, compared to before the parking cash-out offer. The employers and employees liked it. It’s fair, because no matter how you get to work, you get the same subsidy—either free parking or its cash value.

TPR had the opportunity to interview you in 2005 about your book The High Cost of Free Parking. Your recommendations included re-pricing on-street parking, correct?

I recommend three things. First, charge the right price for on-street parking. By “right price,” I mean the lowest price the city can charge and still have one or two open spaces on every block, so that there’s no shortage of parking.

That definition gives you a principle for setting prices: If there are no spaces available, you should nudge up the price, and if half the spaces are empty, you should nudge the price down until you get one or two open spaces everywhere.

That means different prices at different times of day and different prices in different locations. San Francisco and Los Angeles have adopted this policy—it’s called SFpark in San Francisco and Express Park in LA. The results show that both are working very well.

Surprisingly, in both LA and San Francisco, more prices went down than went up. Previously meters had the same price all day long, which led to a lot of vacant spaces in the morning. The meters would start running at 8 a.m. when there wasn’t any demand. On average, prices went down 4 percent in San Francisco and 12 percent in LA.

You also recommended dedicating parking meter revenue to pay for public services on the blocks where the meters are located. How did that recommendation evolve?

The second recommendation is to make right-priced curb parking popular by spending the meter revenue in the metered neighborhoods, so that people can see their meter money at work cleaning the sidewalks, putting in historic light fixtures or street furniture, or bringing extra police patrol.

Pasadena is the best local example of this. The city had no parking meters and wanted to restore Old Pasadena—which was essentially a Skid Row in the 1980s. People thought it would never revive. But then the city put in meters and spent the revenue to rebuild all the sidewalks and clean up the alleys. They did everything you can think of in terms of good public infrastructure. It made the meters very popular.

The merchants and landowners bitterly opposed meters for two years after they were proposed, until the City of Pasadena said, “We'll put in the meters and spend all the meter money on fixing up Old Pasadena.” The merchants then said, “Why didn’t you tell us that? Let’s run the meters ’til midnight! Let’s run them on Sunday!”

Setting the right prices for on-street parking will seem obvious to people if they can see the benefits of this in clean sidewalks—getting rid of the black chewing-gum polka dots. LA has a lot of broken sidewalks we’re now required to repair, and this would help to finance those repairs.

Your recommendation won support in many places, including Pasadena, but was unsuccessful in the City of LA. What explains Pasadena’s receptiveness?

Pasadena didn’t have any parking meters before it offered the meter revenue to the metered neighborhoods.

So, this was new revenue.

That’s it. The General Fund didn’t lose anything. In fact, the General Fund gained a lot, because after Old Pasadena revived spectacularly, the sales tax revenue and property tax revenue shot up.

In LA, we already have meters, so the city’s General Fund would lose money if meter revenue were allocated to neighborhoods. That’s why I recommend in LA that the city dedicate increases in meter revenue to neighborhoods if they agree to the right prices and run meters on Sunday and in the evening. I call that “parking increment finance.” St. Louis is doing this.

That said, San Diego already had meters and they shifted to sharing the revenue with the neighborhoods, essentially half and half. You’re right that the cities already depending on meter revenue for the General Fund don’t want to give it up. I think that’s very shortsighted. Pasadena, in the long run, benefitted greatly by having the neighborhoods prosper.

LA is not in competition with San Francisco, New York, or Tokyo. LA is in competition with Pasadena, West Hollywood, Santa Monica, Glendale, and Burbank. These other cities are winning. When I was younger, you would drive across the border between LA and West Hollywood and wouldn’t know you were in a different city. But now, you think you’re in a different world. These smaller cities have good policies that LA should adopt.

You recommend eliminating minimum parking requirements. Could you elaborate on your thesis?

Yes, my third recommendation is to remove minimum parking requirements. More and more cities are removing minimums in their downtowns. They give various reasons: to promote small businesses, infill development, and adaptive reuse of older buildings.

The Adaptive Reuse Ordinance in Los Angeles is the best example. In 1999, Los Angeles allowed owners to convert historic office buildings into housing without any new parking. Previously, you couldn’t do that because there was a parking requirement for housing.

As soon as the city removed the parking requirement when converting an office building into housing, we had an incredible building boom Downtown. 57 historic office buildings were converted into housing. Just think of all the people who were employed in that process: architects, drywall crews, plumbers, and electricians. And there’s no subsidy involved!

This led to historic preservation of beautiful old buildings that had been empty above the ground floor ever since the Bunker Hill urban renewal program sucked all the life out of Downtown. Gail Goldberg, former director of the LA City Planning Department, once pointed out to me that the Adaptive Reuse Ordinance didn’t lead just to the preservation of some historic buildings—it led to the preservation of a historic district. 

Influenced by your work, many jurisdictions—as far-flung as São Paolo—are eliminating parking minimums. How have you spread the word?

I think journalists have played a key role. They have the talent to pick out the important issues and write about them in a compelling way.

Also, a lot of young people have been emboldened by what I’m saying. I’m old, senior, and part of the establishment—my book was published by the American Planning Association—yet my stance is a complete indictment of how we plan cities now. My book says that almost everything most cities do is wrong when it comes to parking.

Cities have built an elaborate structure of parking requirements with no foundation. It’s pseudoscience. Over and over again, I kept saying, “Our parking policies are dangerous nonsense, and they have harmed our cities immensely.” Slowly the opinion is shifting. In The High Cost of Free Parking, I argued that minimum parking requirements damage the city; harm the environment; increase the cost of housing; discriminate against poor people; and increase traffic congestion, air pollution, and now global warming. In an article I wrote for Planning Magazine coming out next month, I say, “To my knowledge, no urban planner has ever argued that minimum parking requirements do not have these effects.” The practice is quite divorced from research or analysis. 

As you mentioned, LADOT has introduced Express Park, which manages 6,300 parking spaces in Chinatown, Little Tokyo, Civic Center, and the Central Business District. It tracks parking usage and adjusts prices. Is this Los Angeles program evidence of increased adoption?

Yes, and it is spreading.

The whole world is looking at SFpark and LA Express Park. A representative from the mayor’s office of Rio de Janeiro came to see me in near a panic about transportation for the Olympics. There’s not a single parking meter in Rio. The mayor apparently loved the idea of dynamic prices for curb parking, so they have an RFP out for 20,000 new meters with occupancy sensing. They’re copying what we do in LA and San Francisco. It’s just right for the Olympics because—compared to a new stadium or subway—it can be done very quickly and will bring in revenue. It will be a great legacy of the games.

They’ve started Parking Benefit Districts in Mexico City where neighborhoods can vote whether to have parking meters with revenue return, like Pasadena. Some neighborhoods have said, “Yes, we want parking meters.” 

San Francisco recently encountered pushback when implementing MonkeyParking, an app allowing users to buy and sell parking spaces, which violated a law against that practice. Address what still needs to be tweaked for your work to be ubiquitous.

A lot of things need tweaking.

However, MonkeyParking is perfectly consistent with what I’m saying. Instead of trying to ban it, the city ought to wake up to the fact that some spaces are very underpriced. Why should MonkeyParking make money out of this? Why shouldn’t the city get the revenue? Instead, the city bans it. They’re killing the messenger rather than saying, “This shows that we’re not managing the supply properly.”

If a store were underselling items, and people bought and resold the merchandise, the store would know that they were pricing that merchandise too low.

I don’t think MonkeyParking is a glitch in any way. San Francisco had something like 7,000 meters under SFpark. MonkeyParking is aimed at the remaining 200,000 spaces that have no pricing at all.

We’ve been following how Uber, Lyft, and other shared services are impacting urban mobile transportation and streetscapes. What are your thoughts on how sharing technologies in urban transportation impact parking?

When it’s cheaper to take Uber both ways rather than paying for parking at your destination, it can put downward pressure on parking prices in the most popular areas.

If you go to one place and depart from another in the course of an evening, Uber means you don’t have to haul your car from the first place to the second. In many cases you’re transporting your car—your car is not transporting you.

In the decades you served at UCLA as a mentor and a teacher, you’ve had many, many who have taken up your cause. Talk about those whom you’ve worked with and have gone on to implement your ideas.

I’ve learned an awful lot from my students in every aspect of planning. Once they graduate, many of them turn into stars. It makes me very humble in terms of thinking I know how well someone will turn out. It isn’t always the people who get the best grades who have the best careers. Once they graduate, I need them more than they need me. They have practical knowledge that I couldn’t get in any other way.

Mott Smith, while not a former student of mine, is a perfect example of someone who has become a leader in the profession and has done a lot of his own research that I’ve leaned on—specifically about how parking requirements affect development. It takes a developer to really understand that.

Finally, what’s your next book going to address?

It’s called Parking and the City and will be published by the American Planning Association, Planner’s Press. I hope it’ll be out in a couple of years. Parking and the City will be a collection of essays based on academic research—but translated into 2,500-word bite-sized pieces. It’ll be an e-book as well as a paperback book. I’ll start scouring your publication for really great articles on parking!