In cities across America, parking is often perceived as an entitlement—a public good that should be abundant and free. But as urban planners and economists have long argued, “free” parking isn’t free at all. Instead, it imposes hidden costs on cities, businesses, and residents, shaping transportation choices in ways that undermine public safety and economic vitality.

The Problem with Free Parking

The legacy of free or underpriced parking dates back to post-World War II planning policies that prioritized automobile use over other forms of transportation. Today, many cities still require developers to provide excessive off-street parking, while curbside spaces are often priced far below their true market value. The result? More congestion, increased emissions, and inefficient land use that prioritizes cars over people.

Donald Shoup, the UCLA economist and author of The High Cost of Free Parking, famously argued that underpriced parking distorts urban economies. It encourages car dependency, contributes to traffic as drivers circle for spots, and disincentivizes investment in public transit, biking, and walkable neighborhoods. Worse, these hidden costs are passed on to everyone—including those who don’t drive—in the form of higher housing prices, reduced public space, and increased pollution.

The True Cost of Parking Subsidies

While free parking may feel like a convenience, its costs ripple through the economy in ways that few recognize. Consider these realities:

  • Traffic Congestion: Studies estimate that as much as 30% of urban traffic consists of drivers searching for parking. This wasted time and fuel contribute to gridlock, economic inefficiencies, and unnecessary carbon emissions.
  • Housing Affordability: Minimum parking requirements drive up construction costs, making housing less affordable. A single structured parking spot can add $50,000 or more to the cost of a residential unit, a burden ultimately borne by tenants and homeowners.
  • Environmental Impact: The land devoted to parking lots and garages could be repurposed for green spaces, affordable housing, or transit-oriented development. Instead, vast amounts of urban real estate are dedicated to storing vehicles rather than improving quality of life.
  • Missed Revenue Opportunities: Cities that fail to price parking appropriately leave money on the table—funds that could be reinvested in transit, bike infrastructure, and pedestrian improvements.

Learning from Global Best Practices

Many cities worldwide have taken bold steps to reform their parking policies, using pricing as a tool to manage demand and encourage sustainable transportation.

In London and Singapore, congestion pricing has helped reduce traffic and fund public transit improvements. In Europe, over 250 cities have implemented Low Emission Zones (LEZs) that charge or restrict the most polluting vehicles. These policies recognize that curb space is a valuable asset and should be managed accordingly.

Closer to home, San Francisco’s SFpark program uses demand-based pricing to adjust parking fees in real time. The results? Reduced congestion, improved parking availability, and increased transit use. Other cities, including Los Angeles and Washington, D.C., have also begun experimenting with dynamic pricing models to optimize curb space.

The Future of Parking: A Smarter Approach

To create more livable, sustainable cities, we must rethink how parking is priced and managed. Here’s what policymakers should prioritize:

  1. Price Parking to Reflect Demand: Dynamic pricing models, like those in San Francisco, help reduce congestion and ensure that spaces are available when needed.
  2. Eliminate Parking Minimums: Cities like Minneapolis and San Diego have already removed parking mandates for new developments, paving the way for more affordable housing and mixed-use projects.
  3. Reinvest Parking Revenue: Funds from parking fees should be reinvested in public transit, bike lanes, and pedestrian-friendly infrastructure to support mobility choices beyond cars.
  4. Leverage Technology for Smarter Parking Management: Real-time data, digital payment systems, and automated enforcement can help cities optimize curb space usage, reducing inefficiencies and improving access.

Conclusion: Paying the Right Price for a Better Future

The high cost of free parking is an economic and environmental burden that cities can no longer afford to ignore. As urban populations grow and climate challenges mount, we must shift toward policies that prioritize efficient, equitable, and sustainable use of curb space.

By pricing parking appropriately, eliminating outdated minimums, and reinvesting in smarter mobility solutions, cities can create more vibrant, walkable, and resilient communities. The question isn’t whether we can afford to charge for parking—it’s whether we can afford not to.