When Less (Regulation) Is More

A solution to a decades-old parking problem in one city shows how others can harness the power of market economics.
December 2015
These renderings of Rice Village illustrate ongoing renovations. (Rice Village)
William Fulton
By William Fulton  |  Columnist
Director of the Kinder Institute for Urban Research at Rice University and former mayor of Ventura, Calif.

I don’t usually tell stories from my day job in this column, but I’m making an exception this time. Rice University’s Kinder Institute for Urban Research, of which I am the director, recently did a parking study of a neighborhood business district near our office in Houston. Known as Rice Village, it’s a place where city residents have been complaining about parking for 35 years.

To find out if the district indeed needed more parking, we counted the parked cars at different times of the day and on different days of the week. We found that even at the busiest times, there were more than 1,000 vacant parking spaces within a quarter-mile of the area, concluding that the problem wasn’t parking supply but parking management.

That wasn’t the surprising part, however. The surprising part was that everybody believed us. Just a few years ago, cities seemed stuck in an endless debate about needing more parking. But as it turned out, that was a political argument, not a market argument. There’s plenty of parking in most places -- though sometimes it’s not priced correctly or may not be available to everyone.

This change in attitude is largely the result of the work of one man: Donald Shoup, who 10 years ago published a book called The High Cost of Free Parking. Shoup, who just retired, made the case convincingly that if motorists are made to bear the real cost of parking -- just like any other commodity -- then they will use it more efficiently. These days, you see city after city using Shoup’s ideas to implement a comprehensive parking strategy for major commercial districts.

One of his ideas -- the notion that motorists should pay for on-street parking where it has historically been free -- is controversial. But Shoup’s strategy involves more than just parking meters. He argues that if you have a coordinated parking strategy that generates revenue, property owners and companies will be more inclined to make private parking spaces available to the public, thus alleviating parking problems that exist in areas with lots of money. As the wry Shoup likes to say, “You’d be surprised how often people will let you use their assets if you offer them a lot of money.”

I admit I’m a “Shoupista,” of sorts. Shoup was my professor at the University of California, Los Angeles, and later the inspiration for the parking management strategy we implemented in Ventura, Calif., when I was mayor. But there’s a bigger point here: Solutions to urban problems don’t always require more regulation. Sometimes they require less regulation, especially if you can harness the power of market economics.