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Parking Externalities in Commercial Real Estate

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  • Bowman Cutter IV
  • Autumn DeWoody

Abstract

Local governments have employed a variety of strategies to reduce street congestion through an increase in parking supply. These policies have been criticized as an implicit subsidy that shifts costs from drivers to the public at large. Others have noted that parking lots and structures can lead to increased water and air pollution. However, there has not been an examination of whether parking, presumably by reducing congestion, generates external benefits. We measure whether nearby parking availability influences commercial property prices after controlling for property characteristics, including on‐site parking. We find that publicly accessible parking, such as commercial parking garages, generates significant aggregate externalities. We also find evidence of a significant complementary relationship between building and parking area in property values. This suggests that parking regulation could have a significant impact on property development through its effect on the value of the marginal square foot of building area.

Suggested Citation

  • Bowman Cutter IV & Autumn DeWoody, 2010. "Parking Externalities in Commercial Real Estate," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 38(2), pages 197-223, June.
    • Handle: RePEc:bla:reesec:v:38:y:2010:i:2:p:197-223
    DOI: 10.1111/j.1540-6229.2010.00265.x
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    References listed on IDEAS

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    Cited by:

    1. Cutter, W. Bowman & Franco, Sofia 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, Elsevier, vol. 46(6), pages 901-925.
    2. Bo-sin Tang & Kwan To Wong, 2020. "Assessing externality: Successive event studies on market impacts of new housing development on an old residential neighbourhood," Environment and Planning B, , vol. 47(1), pages 156-173, January.
    3. W. Bowman Cutter & Sofia F. Franco, 2012. "The uneasy case for lower Parking Standards," Nova SBE Working Paper Series wp564, Universidade Nova de Lisboa, Nova School of Business and Economics.
    4. Clark, David & Pennington-Cross, Anthony, 2016. "Determinants of industrial property rents in the Chicago metropolitan area," Regional Science and Urban Economics, Elsevier, vol. 56(C), pages 34-45.
    5. Merten, Laura & Kuhnimhof, Tobias, 2023. "Impacts of parking and accessibility on retail-oriented city centres," Journal of Transport Geography, Elsevier, vol. 113(C).

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