Providing a generous parking supply is costly, ranging from about $250 to $2,250 per space (direct, annualized cost calculated by Litman 2006). These costs, however, do not include the indirect costs that municipalities face, such as: "increased sprawl, impervious surface and associated stormwater management costs, reduced design flexibility, reduced efficiency of alternative modes (walking, ridesharing and public transit use), and increased traffic problems" (Ibid). In this section, we will examine how parking management can affect these different areas.

Our development patterns have created a landscape that is often dominated by the car. Since a car spends 95% of its life parked (Shoup 2005), much of the landscape has been turned into parking lots. In many cases, residents of auto-oriented communities would like to have more transportation options, but the low-density associated with a generous parking supply makes this unfeasible. Also, residents who are opposed to new developments with increased density often cite fears of increased traffic and parking difficulties. Unfortunately, the reality is that low-density development patterns preclude transit options and force more people to drive.

Todd Litman's "Cycle of Automobile Dependency" shows how auto-centric land use planning and excessive parking supply have created this situation. Parking management strategies can be used to break this cycle, by changing development patterns and improving travel options (2006).

The impacts of parking management strategies will vary depending on a number of factors, and they will be higher when travelers have alternative transportation options. But even in the absence of transit, it is still possible to use parking strategies to affect land use, congestion, and environmental degradation.

If the provision of parking spaces were left entirely up to the market, we would live in a very different society today. The market would only supply parking where it is profitable, and there would be fewer spaces and people would probably live closer together, walk more, and drive less. A large under-priced supply of parking does not necessarily create traffic, but it does reduce the cost of travel by automobile. Parking management strategies, particularly pricing, will have the effect of forcing users to "economize" when it comes to parking. Many drivers will shift to different modes, different times of day, or combine trips. These actions will help to reduce traffic congestion, roadway costs, pollution, and more. At the low end, Shoup estimates congestion costs to be about $73 per month per parking space (2005), which would equal almost $3 billion in annual costs for the Chicago region.

Todd Littman has found that offering cash-out programs (such as $50 / month for not using a parking spot) typically reduces automobile commuting by 20% (2006). In another study, Litman found that shifting from free parking to cost-recovery parking (prices that reflect the full cost of providing parking facilities) typically reduces automobile commuting by 10-30% (2008). Wilson and Shoup found that, when employees are charged to park, 20% fewer drive solo (1990). At suburban locations with limited transit, it is still possible to reduce the number of single-occupant drivers by incentivizing carpooling, although the impacts will be less. Factors that affect the success of parking cash-out programs include: proportion of employees that are candidates for cash-out, availability of transit, and the presence of uncontrolled parking supplies (Vaca and Kuzmyak, 2005). Downtown San Francisco has developed a "Transit First" policy to encourage transit ridership that has no requirements for parking provision, but instead has implemented maximum parking ratios. In ten years, there has been no major increase in peak traffic despite "considerable office growth" (Kuzmyak, et al, 2003). Other studies have found a decrease in parking demand ranging from about 15% in areas with low transit to 38% in areas with some transit (Transportation Authority of Marin).

A combination of parking management strategies, tailored to specific neighborhoods could price on-street spaces so that they maintain 85% occupancy. Drivers who are willing to pay the cost of on-street parking will no longer find themselves "cruising" for a spot. This will significantly reduce traffic in CBDs. Programs that encourage alternative modes, while charging for parking, will also have the effect of reducing single-occupant drivers.

There are very few land uses that generate less revenue than surface parking lots; in fact, they are more likely to reduce the economic success of a downtown than to improve it (Robertson, 2001). From a regional perspective, limiting the parking supply would be a boon to the economy. Local municipalities, however, see the situation differently, because of the importance of retail tax revenue. If one municipality offers free parking at a shopping destination and the next one does not, customers will probably pick the former. But as municipalities compete, it becomes a zero-sum game at the regional level because increasing the parking supply everywhere does not increase the total regional sales volume, although there may be marginal changes near the region's boundaries.

An integrated parking management strategy, optimally organized by local PMAs, can be used to increase the attractiveness of a retail center by reinvesting the parking revenue into street improvements. The city of Pasadena used parking management to revitalize their downtown. With agreement from local merchants, they added parking meters and used the revenue to purchase new "street furniture and trees, more police patrols, better lighting, more street and sidewalk cleaning, pedestrian improvements, and marketing (including maps to show local attractions and parking facilities)" (Litman 2009). Local merchants actually saw an increase in business as the location became a more attractive place for customers to shop and spend time in "Old Pasadena." A city might have more than one PMA (separated by neighborhoods) but it is unlikely that a PMA would cover more than one town.

The two biggest environmental impacts of parking are a result of vehicle miles traveled and increased impervious surfaces. As established in this paper, an over-supply of under-priced parking encourages driving and congests our roadways. Shoup estimates the cost of emissions alone to be about $44 per month per parking space (2005). Compact development with a mix of uses can reduce driving and the need for parking; design can be used to minimize the impacts of parking on impervious surfaces. Boston Metropolitan Area Planning Council recommends the following design improvements to reduce environmental impacts of parking (2007):

• Reduce the dimensions of parking stalls and encourage inclusion of compact car spaces
• Use pervious surfaces for low-volume parking areas to allow infiltration of stormwater
• Require landscaping to provide shade and improve air quality
• Use bio-retention basins or rain gardens to treat and infiltrate stormwater
• Build parking garages with green roofs to capture stormwater and mitigate heat island effects

Construction of parking often involves paving over land that once served as a filtration mechanism for rainwater. The paved area increases flood risks and degrades water quality, as oil and other pollutants are washed into the water system. Dark pavement absorbs heat from the sun and results in the "urban heat island" effect with increased air temperatures. Parking management strategies to encourage better utilization of existing facilities and pricing parking to match its cost will have the effect of reducing stormwater management costs, reducing the urban heat island effect, reducing land consumption as well as creating a possible cash infusion from parking revenue. Many principles of conservation design can be used in the development of parking facilities. Conservation design is a design system that takes into account the natural landscape and ecology of a development site and facilitates development while maintaining the most valuable natural features and functions of the site. Conservation design includes a collection of site design principles and practices that can be combined to create environmentally sound development. The conservation design strategy paper has more information.

There are many costs associated with parking spaces. There are costs to developers to construct the spaces, costs to drivers who occupy them, ‘opportunity costs' of the land used for parking, and external costs (which are covered in Traffic and Environmental sections). Most parking in the US is provided free, is highly subsidized, or automatically included with building purchases and rents. This forces consumers to pay for parking whether or not they use it, as businesses will often pass on the cost of parking lots to consumers in the prices of goods they sell (Litman 2006).

In his book, The High Cost of Free Parking, Donald Shoup calculates the direct and indirect cost of providing off-street parking spaces (2005), using 15 projects on UCLA's campus from the past 40 years. He estimates the average cost in 2002 dollars to be at least $22,500 per space, or about $127 a month per space for 40 years. He also cites other cities who quote monthly costs per space at $200, $138, and $160 for Seattle, Bellevue (WA), and Ann Arbor, respectively.

Prices per space vary significantly between the type of structure (surface lot, above-ground, or underground) and the efficiency with which it is built (See Appendix: Factors Affecting Cost of Parking Structure). The associate vice president for facilities management at Northwestern University estimates per-space parking construction costs to average $4,000 for surface parking lots, $20,000 for above-grade garages, and $30,000 to $40,000 for below-grade garages (Northwestern University Newsletter, 2006). An efficient structure with 300 square feet per space could cost $15,000 per space, while a less efficient structure with 400 square feet per space could cost about $20,000 per space (Shoup 2005). Superior quality and design will add to those costs.

Calculating on-street costs of parking is slightly more complex, as it is generally wrapped into the cost of road construction. Consider the example of a 36-foot wide residential street with two 10-foot wide travel lanes and two 8-foot wide parking lanes: curb parking takes up 44% of the road space (Shoup 2005). Since a car usually parks for free, and roads are a significant portion of public infrastructure costs, on-street parking is a major subsidy provided to drivers.

Using Mark Delucchi's research at estimating the high and low values of annual capital and operating costs of off-street parking, Shoup estimates the total subsidy in 2002 for off-street parking in the U.S. to be between $127 billion and $374 billion (2005). Shoup also calculates the following:

• Free parking is worth 22 cents per mile driven to work
• Free parking is worth more than $4 per gallon of gasoline
• Free parking reduces the cost of automobile commuting by 71 percent
• Total US parking supply is worth more than twice the value of the total vehicle stock

Reducing the requirements for parking spaces will equal a significant reduction in public expenditures; charging for the cost of parking would help reduce parking congestion and demand while improving municipal budgets. Reduced parking requirements will also encourage infill development since developers will typically encounter reduced development costs. Employers will have a reduced burden of subsidizing parking. Also, some revenue from parking management strategies can be put toward the cost of providing parking facilities or transportation improvements (Litman 2006).