- Ziggurat Realestatecorp
- Jan 5
- 4 min read
The conventional wisdom is that parking is a public good and that more vehicle parking benefits everyone. Not true. In this column, we explain why parking policy needs to be part of the toolkit of national and local officials. Free or low-cost car parking in urban areas is a magnet for motor vehicle use in already congested city streets — increasing traffic, worsening air and noise pollution, adding to carbon emissions and raising local temperatures. For the benefit of future generations of Filipinos, we should put in place four key measures related to motor vehicle parking.
Proof of private parking space
Today, tempering the demand for motor vehicle ownership is one of the ways we can address increasing road congestion. One way to reduce the demand for motor vehicle ownership is to require each motor vehicle owner to submit proof of a private parking space. While this will limit vehicle ownership to those with the means to have a private parking space, it is also one way to control illegal parking in urban areas.
In countries like Japan and Korea, the requirement for a private parking space is implemented by local governments that prepare and maintain a detailed inventory of all private parking spaces in a locality, recording each on a map with a specific identification code assigned to each space. Each motor vehicle is associated with a specific private parking space on the map, which may be assigned to only one vehicle.
Removal of parking minimums
Except for mandatory motor vehicle parking spaces for persons with disability, property developers and builders should have the discretion to determine the appropriate number of motor vehicle parking spaces appropriate for their locality and type of building.
However, this is not the case today. The implementing rules and regulations (IRR) of the National Building Code (Presidential Decree 1096 enacted in 1977) require, for example, that:
– Shopping centers should provide one parking slot per 100 sqm of shopping area.
– Restaurants, bars and fast-food outlets should provide one parking slot per 20 sqm of customer area.
– Places of worship and funeral parlors should provide one parking slot per 50 sqm of floor area.
These parking space requirements in the IRR of the National Building Code are called “parking minimums.”
Unfortunately, minimum parking requirements lead to many undesirable and harmful impacts that outweigh intended benefits, especially in a country where only six percent of households are car owners. A major negative impact is that parking minimums increase the cost of goods and services for everyone, especially the cost of housing.
Because developers need to reserve space to satisfy parking requirements, building costs naturally increase making housing less affordable. Parking spaces consume valuable floor area and can add 20 percent or more to the cost of a building. This additional cost could be shaved from housing prices; floor area currently devoted to parking could be converted into new residential or commercial space.
In commercial establishments, markets and shopping malls, the extra cost of the required parking spaces are compensated by charging higher rents; higher rents are, in turn, recovered through higher prices of goods and services. While the availability of parking benefits the small minority of Filipinos with motor vehicles, the general public ends up paying the tab for such facilities, whether or not they use cars. This is akin to a subsidy provided to the most affluent six percent of Filipinos financed by a “tax” on the entire population (the 94 percent who are not car owners).
‘Just right’ on-street parking rates
The late Donald Shoup, the author of “The High Cost of Free Parking,” said on-street parking should not be free or priced too cheaply. When parking is perceived to be free or almost free, drivers spend an inordinate amount of time cruising around to find a parking space. Shoup said on-street parking should be priced high enough and on an hourly basis — at a level that results in an enough turnover to leave an average of one or two spaces empty per street block during business hours. This “Goldilocks” approach thereby brings more customers to local businesses. Shoup also suggested that part of the revenues collected should directly benefit the streets and neighborhoods where the parking fees are collected; they can be spent on things like sidewalk improvement, shade trees, street lighting, better signage and CCTV cameras.
A parking levy for public transport
A parking levy on non-residential parking spaces in urban areas collected in the same way as the real property tax can provide a sustainable stream of revenue that is progressive and provides the right incentives. Moreover, a parking levy is one way for society to be compensated for the negative impacts associated with the availability of private non-residential parking spaces. Revenues generated from the parking levy can be earmarked to finance improved public transportation and better infrastructure for walking and cycling, making our cities more livable and sustainable.
The proposed revenue collection method is also straightforward. In every LGU, property owners would be required to declare the number of non-residential parking spaces that each person or entity maintains. The parking levy could then be collected by the LGU in the same way it collects real property taxes. There is also the option for revenues to be shared between the national government and the concerned local government unit. The additional revenues, if earmarked for public transport and active transport, will give local governments the confidence to assume greater responsibility for transportation and mobility outcomes in their localities.
The potential revenue from a parking levy can be substantial. Think of the number of non-residential car parking spaces you find in office buildings, shopping malls, commercial parking lots plus those in front of shops, restaurants and banks. My rough estimate is that there are at least two million private non-residential parking spaces in just the Greater Manila Area (Metro Manila plus surrounding provinces); if a parking levy of P100 were charged for each per day (whether the space is used or not), the revenue collected just for Greater Manila would amount to about P73 billion per year. This could help finance a continuing subsidy for urban public transport and mass transit.
The above parking policy reforms will deliver substantial improvements in our mobility environment without significant cost. They could be important legacies of the Marcos administration. The most important ingredient though is political will.
Source: Manila Times