Mises Wire

Need More Public Parking? Privatize It!

In its usual form, the case for privatizing public parking invokes the basic economic principles of supply and demand. This case is usually restricted to private parking lots and garages. For example, Walter Block discusses how market incentives can drive parking rates to rise to eliminate shortages here. A more radical proposal is the privatization of public parking altogether. A common form of public parking that libertarians can target for privatization is free public roadside parking.

Under a free public roadside parking system, a section of the road is reserved for public parking, meaning that anyone and everyone, taxpayers and nontaxpayers alike, can park there. They face no barriers: no parking meters and no exclusion. This results in a tragedy of the commons. The fact that nonpayers (nontaxpayers or net-tax consumers) can park on the road means that one household will likely take more parking spaces than they legitimately claim by parking two, three, four, or as many cars as they want, blocking their neighbors from utilizing this shared space. Privatization is the solution.

This issue has arisen numerous times in my own community. Certain streets are populated by large families that own multiple cars, taking up more spaces than they should legitimately claim. The government forcing this space to be shared creates conflict between households.

Consistent libertarians and defenders of the free market know that roads should be privatized. Considering this ethical position and the tragedy of the commons, public roadside parking is no exception to the privatization rule. This could be implemented by ceding the parking space(s) to abutting private property owners. In this case, the amount of the street ceded to the property owner would be determined by how much of the individual property lies on the edge of the street. For streets that only have one side of the road reserved for parking, the parking spaces can be divided up proportionally between the households on the left and right of the road.

These ownership rights can be ceded to the households by the act of the present “owners” of the road (the government). This must be done through the passing of a law (ordinance) that assigns the right to these parking spaces to the proper households. Furthermore, so that the government is completely removed from the matter, the responsibility of installing parking meters, painting parking lines, and the towing of unwanted visitors should be the sole responsibility of the private property owner. For the government to provide any of these services is to subsidize security for certain households at the expense of other households. That would not only be unjust, but would cause distortions in the housing market, making properties with more highly demanded parking spaces more desirable relative to those properties with less highly demanded parking.

These ownership rights can also be traded away. For example, if a household buys a second car, they can buy a second parking space from one of the other households. If someone is not in need of a parking space, they can sell or lease the space to their neighbors or some other entity. If the price of parking spaces becomes sufficiently high, construction of parking space substitutes, such as garages and driveways, would increase. If constructing either of these is impossible, the household in the market for a new space would need to find someone who is willing to store their car for them or move away to an area that has less of a dearth of parking.

Another aspect of this issue is the creation of new driving lanes. If households along a street desire a new driving lane, they could pool their parking spaces together, pay for the parking spaces of any holdouts, and convert the lane formerly reserved for parking into a new driving lane. They can erect signs that regulate driving on the lane as well.

The elimination of all restrictions on the construction of garages and driveways is a logical extension of the privatization view. This means that any zoning laws that prohibit or regulate the construction of garages and driveways should be completely abolished. This can be done by an amendment or repeal of local zoning ordinances. These regulations must be abolished not only because they restrict the usage of someone’s justly acquired property, but they would also increase the price of parking spaces in a given area. Restricting the construction of roadside parking substitutes, such as garages and driveways, would increase the demand for roadside parking, making it less affordable.

Furthermore, the privatization position would also require more privatization of roads. Imagine a situation where there is a two-way street with no parking. Households should have a right to transition a lane into parking spaces. Ceding the road to the abutting households will allow these property owners to dispose of their section of the road according to their highest-valued use for the road. If the households jointly decide that one lane or another should be closed for parking and the street converted into a one-way street, then they should be free to do so. If one or more households disagree with such a plan, the dissenters are free to hold out of the agreement. The other households would be free to purchase the holdout’s section of road if they are able and willing.

If the holdout never relents and the plan to convert the road into a one-way street with parking fails, this should not be a cause for concern. This is a function of private property; it places a constraint on the activity of others for the benefit of the private property owner.

There is no way to tell what use is “more valuable” or “more efficient.” There will be costs and benefits for every conceivable alternative use for the space, and the only way to judge the correct use is to resort to ethics. Libertarians ultimately rest their ethical case on private property. A private property owner should never be forced to subject themselves to a collective plan no matter how glorious that plan may be. The holdout in the earlier example is no exception to this rule.

A conclusion of this is that public parking spaces should be privatized, and the “new” or legitimate owners of the parking spaces should be able to dispose of these spaces in any way they wish; this may take the form of turning them into public spaces by allowing anyone to park or turning the space into something else entirely.

The costs of excluding others from these spaces may be too high, and as a result, the spaces may become what they were under government management: free parking. However, if conditions change and the space becomes more cost-effective to exclude from others, then the space can be freely transitioned from free parking to whatever other use the private property owner has for it.

An alternative position that many municipalities employ is to exclude people from parking by installing parking meters and sending their police officers to enforce them. What’s the problem with this? This position neglects justice. The government does not legitimately own these spaces; private property owners do. It commits an injustice by charging the legitimate property owners a fee to use their property and disallows them from transferring the property to someone else or to some alternative use.

It also poses the problem of pricing parking. How does the government determine parking fees? Does the government have the incentive to set the correct fee, or will it be forced by political pressure to hold the fees below the price where the market for parking clears? It is likely that the government is incapable of determining the correct price due to the absence of profit-and-loss calculations, and even if it could, it would be encouraged to hold the fees for residential parking below the market price because of political pressure. For the sake of ethics and economics, the policy of government parking fees and meters must be rejected entirely.

Ultimately, all public parking should be privatized. This will create a more just and desirable system.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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