The unexpected factor driving US inequality – free parking

Free parking makes it cheaper to own a car. But, as UCLA economist Donald Shoup has long argued, it makes everything else more expensive. Parking at the supermarket is embedded in the cost of groceries. Parking attached to an apartment building is built into the price of rent.

And because cities typically require developers to build a minimum amount of parking — say, one spot per bedroom in each housing unit, or two per thousand square feet of commercial space — you may pay for the cost of parking even if you never drive a car.

One analysis in Seattle found, for instance, that overbuilt parking at apartment buildings can drive up rents by nearly $250 a month. In Chicago, a similar recent study concluded that on average a third of costly parking at apartment buildings sits empty overnight. In Los Angeles, Shoup calculates, the mandate to provide minimum parking effectively reduces the number of units in a new apartment by 13 percent. And it can nearly double the cost there of constructing a shopping center if we're talking underground lots.

These requirements are often arbitrary (planning for parking, Shoup writes, "is more a political activity than a professional skill"). And they fall particularly heavily on the poor, the group least likely to have access to cars.

"People who are too poor to own a car," Shoup writes in the University of California's ACCESS Magazine, "pay more for their groceries to ensure that richer people can park free when they drive to the store."

To put this in perspective: The cost of constructing above-ground parking in a major American city runs about $24,000 per space, in Shoup's research (this doesn't include the cost of buying the land underneath). An underground spot costs $34,000. Either way, a single parking space costs more than twice the median net worth of black and Hispanic households in America.

Regulations that require developers to bake those costs into shopping centers, offices or apartment buildings — whether people intend to drive there or not — are a matter of inequality, Shoup argues. They force people who don't drive to subsidize those who do. They assume everyone does drive when many people can't. And they make it more expensive to build affordable housing, which means we get less of it.

"In a misguided attempt to provide free parking for everyone," Shoup writes, "cities have created a serious economic injustice by forcing developers to build parking spaces that many people can ill afford."