The opportunity cost of parking requirements: Would Silicon Valley be richer if its parking requirements were lower?

Authors

  • C.J. Gabbe Santa Clara University
  • Michael Manville UCLA
  • Taner Osman

DOI:

https://doi.org/10.5198/jtlu.2021.1758

Keywords:

land use, parking policy, economic productivity, Silicon Valley

Abstract

We estimate the off-street parking supply of the seven most economically productive cities in Santa Clara County, California, better known as Silicon Valley. Using assessor data, municipal zoning data, and visual inspection of aerial imagery, we estimate that about 13 percent of the land area in these cities is devoted to parking, and that more than half of the average commercial parcel is parking space. This latter fact suggests that minimum parking requirements, if binding, depress Silicon Valley’s commercial and industrial densities, and thus its economic output. In an exploratory empirical exercise, we simulate a reduction in parking requirements from the year 2000 forward and show that under conservative assumptions the region could have added space for nearly 13,000 jobs, equivalent to a 37 percent increase over the actual job growth that occurred during that time. These additional jobs would be disproportionately located in the region’s highest-wage zip codes and could add more than $1 billion in payroll annually, further implying a large productivity gain.

References

Ahlfeldt, G. M., & Pietrostefani, E. (2019). The economic effects of density: A synthesis. Journal of Urban Economics. https://doi.org/10.1016/j.jue.2019.04.006

Akbari, H., Shea Rose, L., & Taha, H. (2003). Analyzing the land cover of an urban environment using high-resolution orthophotos. Landscape and Urban Planning, 63(1), 1–14. https://doi.org/10.1016/S0169-2046(02)00165-2

Andersson, M., Klaesson, J., & Larsson, J. P. (2016). How local are spatial density externalities? Neighborhood effects in agglomeration economies. Regional Studies, 50(6), 1082–1095. https://doi.org/10.1080/00343404.2014.968119

Arzaghi, M., & Henderson, J. V. (2008). Networking off Madison Avenue. The Review of Economic Studies, 75(4), 1011–1038. https://doi.org/10.1111/j.1467-937X.2008.00499.x

Carlino, G. A., Chatterjee, S., & Hunt, R. M. (2007). Urban density and the rate of invention. Journal of Urban Economics, 61(3), 389–419. https://doi.org/10.1016/j.jue.2006.08.003

Chester, M., Fraser, A., Matute, J., Flower, C., & Pendyala, R. (2015). Parking infrastructure: A constraint on or opportunity for urban redevelopment? A study of Los Angeles County parking supply and growth. Journal of the American Planning Association, 81(4), 268–286. https://doi.org/10.1080/01944363.2015.1092879

Chilton, W., & Bream, B. (2017, July 19). The high cost of free parking. Vox. Retrieved from https://www.vox.com/videos/2017/7/19/15993936/high-cost-of-free-parking

City of Oakland/MTC. (2016). Downtown Oakland parking study technical memorandum #2: Existing conditions. Retrieved from https://wbcapp.oaklandnet.com/cs/groups/public/documents/report/b2fr/mdu3/~edisp/oak057179.pdf

City of San Jose. (2013). City of San Jose specific height limitation areas. Retrieved from https://www.sanjoseca.gov/home/showdocument?id=24013

Combes, P.-P., Duranton, G., & Gobillon, L. (2008). Spatial wage disparities: Sorting matters! Journal of Urban Economics, 63(2), 723–742. https://doi.org/10.1016/j.jue.2007.04.004

Combes, P.-P., Duranton, G., & Gobillon, L. (2012). The costs of agglomeration: Land prices in French cities. SSRN. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2210209

Cushman & Wakefield. (2018). Space matters. Key office trends and metrics for occupiers. Chicago: Cushman & Wakefield. Retrieved from http://creknowledgecenter.com/wp-content/uploads/2018/06/Space-Matters-Spring-2018.pdf

Cutter, W. B., & Franco, S. F. (2012). Do parking requirements significantly increase the area dedicated to parking? A test of the effect of parking requirements values in Los Angeles County. Transportation Research Part A: Policy and Practice, 46(6), 901–925. https://doi.org/10.1016/j.tra.2012.02.012

Duranton, G., & Puga, D. (2004). Micro-foundations of urban agglomeration economies. In J. V. Henderson & J.-F. Thisse (Eds.), Handbook of regional and urban economics (Vol. 4, pp. 2063–2117). Amsterdam: Elsevier. Retrieved from https://doi.org/10.1016/S1574-0080(04)80005-1

Duranton, G., & Puga, D. (2015). Urban land use. In G. Duranton, J. V. Henderson, & W. C. Strange (Eds.), Handbook of regional and urban economics (Vol. 5, pp. 467–560). Amsterdam: Elsevier. Retrieved from https://doi.org/10.1016/B978-0-444-59517-1.00008-8

Fort Hill Infrastructure Services. (2017). City of Portland parking study for Downtown, the Old Port, and the Eastern Waterfront. Boston: Fort Hill Infrastructure Services. Retrieved from http://www.portlandmaine.gov/DocumentCenter/View/18261/Portland-Parking-Study-Final-Report?bidId=

Gabbe, C. J. (2018). How do developers respond to land use regulations? An analysis of new housing in Los Angeles. Housing Policy Debate, 28(3), 411–427. https://doi.org/10.1080/10511482.2017.1368031

Gabbe, C. J., Pierce, G., & Clowers, G. (2020). Parking policy: The effects of residential minimum parking requirements in Seattle. Land Use Policy, 91. https://doi.org/10.1016/j.landusepol.2019.104053

Ganong, P., & Shoag, D. (2017). Why has regional income convergence in the U.S. declined? Journal of Urban Economics, 102, 76–90. https://doi.org/10.1016/j.jue.2017.07.002

Glaeser, E. L. (1998). Are cities dying? The Journal of Economic Perspectives, 12(2), 139–160. https://doi.org/10.2307/2646967

Glaeser, E. L., & Gyourko, J. (2003). The impact of building restrictions on housing affordability. Federal Reserve Bank of New York Economic Policy Review, 9(2), 21–39.

Glaeser, E. L., & Kahn, M. E. (2001). Decentralized employment and the transformation of the American city (Working paper No. 8117; Working Paper Series). Cambridge, MA: National Bureau of Economic Research. https://doi.org/10.3386/w8117

Glaeser, E. L., & Kahn, M. E. (2004). Sprawl and urban growth. In Handbook of regional and urban economics (Vol. 4, pp. 2481–2527). Amsterdam: Elsevier.

Go, A. (2019). Silicon Valley map. Retrieved from https://www.siliconvalleymap.org/

Graham, D. J. (2007). Agglomeration, productivity and transport investment. Journal of Transport Economics and Policy, 41(3), 317–343.

Graham, D. J., Melo, P. S., Jiwattanakulpaisarn, P., & Noland, R. B. (2010). Testing for causality between productivity and agglomeration economies. Journal of Regional Science, 50(5), 935–951. https://doi.org/10.1111/j.1467-9787.2010.00676.x

Guo, Z., & Ren, S. (2013). From minimum to maximum: Impact of the London parking reform on residential parking supply from 2004 to 2010? Urban Studies, 50(6), 1183–1200. https://doi.org/10.1177/0042098012460735

Gyourko, J., Saiz, A., & Summers, A. (2008). A new measure of the local regulatory environment for housing markets: The Wharton residential land use regulatory index. Urban Studies, 45(3), 693–729. https://doi.org/10.1177/0042098007087341

Harris, T. F., & Ioannides, Y. M. (2000). Productivity and metropolitan density. In Discussion papers series (No. 0016). Medford, MA: Department of Economics, Tufts University. Retrieved from https://ideas.repec.org/p/tuf/tuftec/0016.html

Hoehne, C. G., Chester, M. V., Fraser, A. M., & King, D. A. (2019). Valley of the sun-drenched parking space: The growth, extent, and implications of parking infrastructure in Phoenix. Cities, 89, 186–198. https://doi.org/10.1016/j.cities.2019.02.007

How not to create traffic jams, pollution and urban sprawl. (2017, April 8). The Economist. Retrieved from https://www.economist.com/briefing/2017/04/08/how-not-to-create-traffic-jams-pollution-and-urban-sprawl

Hsieh, C.-T., & Moretti, E. (2019). Housing constraints and spatial misallocation. American Economic Journal: Macroeconomics, 11(2), 1–39. https://doi.org/10.1257/mac.20170388

Larson, W., Shui, J., Davis, M., & Oliner, S. (2020). The price of residential land for counties, zip codes, and census tracts in the United States (Working paper 19-01). Washington, DC: Federal Housing Finance Agency. Retrieved from https://www.fhfa.gov/PolicyProgramsResearch/Research/Pages/wp1901.aspx

Leamer, E. E., & Storper, M. (2001). The economic geography of the Internet age. Journal of International Business Studies, 32(4), 641–665.

Li, F., & Guo, Z. (2017). Do parking maximums deter housing development? Journal of Planning Education and Research, 38(2), 183–197. https://doi.org/10.1177/0739456X16688768

Li, R. (2010, February 1). New York’s aging buildings. Observer. Retrieved from https://observer.com/2010/02/new-yorks-aging-buildings/

Lucas, R. E., & Rossi–Hansberg, E. (2002). On the internal structure of cities. Econometrica, 70(4), 1445–1476. https://doi.org/10.1111/1468-0262.00338

Manville, M. (2013). Parking requirements and housing development. Journal of the American Planning Association, 79(1), 49–66. https://doi.org/10.1080/01944363.2013.785346

Manville, M. (2017). Bundled parking and vehicle ownership: Evidence from the American Housing Survey. Journal of Transport and Land Use, 10(1), 27–55. https://doi.org/10.5198/jtlu.2016.730

Manville, M., Beata, A., & Shoup, D. (2013). Turning housing into driving: Parking requirements and density in Los Angeles and New York. Housing Policy Debate, 23(2), 350–375. https://doi.org/10.1080/10511482.2013.767851

Manville, M., & Osman, T. (2017). Motivations for growth revolts: Discretion and pretext as sources of development conflict. City & Community, 16(1), 66–85. https://doi.org/10.1111/cico.12223

Manville, M., & Pinski, M. (2020). Parking behavior: Bundled parking and travel behavior in American cities. Land Use Policy, 91,103853. https://doi.org/10.1016/j.landusepol.2019.02.012

Manville, M., & Shoup, D. (2005). Parking, people, and cities. Journal of Urban Planning and Development, 131(4), 233–245. https://doi.org/10.1061/(ASCE)0733-9488(2005)131:4(233)

Marshall, A. (1890). Principles of economics. New York: Macmillan.

McCahill, C., & Garrick, N. (2012). Automobile use and land consumption: Empirical evidence from 12 cities. Urban Design International, 17(3), 221–227. https://doi.org/10.1057/udi.2012.12

McDonnell, S., Madar, J., & Been, V. (2011). Minimum parking requirements and housing affordability in New York City. Housing Policy Debate, 21(1), 45–68. https://doi.org/10.1080/10511482.2011.534386

Melo, P. C., Graham, D. J., & Noland, R. B. (2009). A meta-analysis of estimates of urban agglomeration economies. Regional Science and Urban Economics, 39(3), 332–342. https://doi.org/10.1016/j.regsciurbeco.2008.12.002

Ogawa, H., & Fujita, M. (1980). Equilibrium land-use patterns in a nonmonocentric city. Journal of Regional Science, 20(4), 455–475.

Osman, T. (2020). Land-use regulations and the dispersion of the IT industry in the San Francisco Bay area. Papers in Regional Science, 99(5), 1301–1316. https://doi.org/10.1111/pirs.12532

Rosenthal, S. S., & Strange, W. C. (2003). Geography, industrial organization, and agglomeration. The Review of Economics and Statistics, 85(2), 377–393. https://doi.org/10.1162/003465303765299882

Rosenthal, S. S., & Strange, W. C. (2004). Evidence on the nature and sources of agglomeration economies. In J. V. Henderson & J.-F. Thisse (Eds.), Handbook of regional and urban economics (Vol. 4, pp. 2119–2171). Amsterdam: Elsevier. Retrieved from https://doi.org/10.1016/S1574-0080(04)80006-3

Rosenthal, S. S., & Strange, W. C. (2010). Small establishments/big effects: Agglomeration, industrial organization and entrepreneurship. In Agglomeration economics (pp. 277–302). Chicago: University of Chicago Press.

San Jose Mercury News. (2019, March 12). Editorial: Why San Jose should raise downtown building height limits. San Jose Mercury News. Retrieved from https://www.mercurynews.com/editorial-why-san-jose-council-should-approve-raising-downtown-building-heights

Scharnhorst, E. (2018). Quantified parking: Comprehensive parking inventories for five U.S. cities [Research Institute for Housing America special report]. Washington, DC: Mortgage Bankers Association. https://www.mba.org/Documents/18806_Research_RIHA_Parking_Report%20(1).pdf

Schmitt, A. (2013, June 17). Parking crater prevention: Which cities are doing it right? Streetsblog USA. Retrieved from https://usa.streetsblog.org/2013/06/17/parking-crater-prevention-which-cities-are-doing-it-right/

Shoup, D. (2011). The high cost of free parking. New York: APA Planners Press.

Storper, M. (1997). The regional world: Territorial development in a global economy. New York: Guilford Press.

Weinberger, R., Seaman, M., & Johnson, C. (2009). Residential off-street parking impacts on car ownership, vehicle miles traveled, and related carbon emissions: New York City case study. Transportation Research Record, 2118(1), 24–30. https://doi.org/10.3141/2118-04

Willson, R. W. (1995). Suburban parking requirements: A tacit policy for automobile use and sprawl. Journal of the American Planning Association, 61(1), 29–42. https://doi.org/10.1080/01944369508975617

Downloads

Published

2021-02-22

How to Cite

Gabbe, C., Manville, M., & Osman, T. (2021). The opportunity cost of parking requirements: Would Silicon Valley be richer if its parking requirements were lower?. Journal of Transport and Land Use, 14(1), 277-301. https://doi.org/10.5198/jtlu.2021.1758

Issue

Section

Articles