Universities have tried almost every possible way of dealing with the shortage of campus parking: lotteries, hunting licenses, first-come-first-served, waiting lists, seniority, and need-based systems. As another way to eliminate parking shortages, this paper proposes using variable prices to balance supply and demand. We can call this the Goldilocks Principle of parking prices: the price at any location is too high if many spaces are vacant, and too low if no spaces are vacant. When a few vacant spaces are available everywhere, the prices are just right and drivers can always find a place to park. The paper concludes by proposing a pilot program to test drivers’ responses to performance-based prices for campus parking.

California law requires many employers to offer commuters the option to choose cash in lieu of any parking subsidy offered. This report presents case studies of eight firms that have complied with California’s cash-out requirement. For the 1,694 employees of the eight firms, the number of solo drivers to work fell by 17 percent after cashing out. The number of carpoolers increased by 64 percent, the number of transit riders increased by 50 percent, and the number who walk or bike to work increased by 39 percent. Vehicle-miles traveled for commuting to the eight firms fell by 12 percent. Carbon dioxide emissions from commuting fell by 367 kilograms per employee per year. The eight firms’ spending for commuting subsidies rose by $2 per employee per month because payments in lieu of parking increased slightly more than spending for parking declined. Federal and state income tax revenues increased by $65 per employee per year because many commuters voluntarily traded tax-exempt parking subsidies for taxable cash. Employers praised the cash option for its simplicity and fairness, and said that it helped to recruit and retain employees. The benefit/cost ratio of the eight cash-out programs was at least 4/1. In summary, these eight case studies show that cashing out employer-paid parking can benefit commuters, employers, taxpayers, and the environment. All these benefits derive from subsidizing people, not parking.

Some cities allow developers to pay a fee in lieu of providing the parking spaces required by zoning ordinances, and use this revenue to finance public parking spaces to replace the private parking spaces the developers would have provided. This paper presents a survey of in-lieu programs in 46 cities in the United States, Canada, the United Kingdom, South Africa, Germany, and Iceland. These in-lieu programs reduce the cost of development, encourage shared parking, improve urban design, and support historic preservation. The in-lieu fees also reveal that the cost of complying with minimum parking requirements is more than four times the cost of the impact fees that cities levy for all other public purposes combined. The high cost of required parking suggests another promising in-lieu policy: allow developers to reduce parking demand rather than increase the parking supply. Examination of an Eco Pass program in California shows that reducing parking demand can cost far less than increasing the parking supply.

Employer-paid parking subsidizes about a third of all automobile travel in the United States, and about two-thirds of all automobile travel during the morning peak hours. To reduce traffic congestion and air pollution, California has recently enacted legislation requiring employers who subsidize employee parking to offer employees the option to take the cash value of the parking subsidy, in lieu of the parking itself. The legislation also requires cities to reduce the parking requirements for developments that implement a parking cash-out program. This study estimates how the option to cash out employer-paid parking will reduce commuter parking demand, and recommends a corresponding reduction in minimum parking requirements. To deal with spillover parking problems that may occur if cities reduce parking requirements, the article concludes with a proposal to create "Parking Benefit Districts" where the revenues from market-priced curb parking are dedicated to paying for neighborhood public services. At market parking prices, curb parking revenue could easily exceed the current residential property tax revenue in neighborhoods subject to spillover parking.

Employer-paid parking is the most common tax-exempt fringe benefit offered to workers in the United States, and 95 percent of American automobile commuters park free at work. All this free parking at work helps to explain why 91 percent of commuters drive to work, and why 91 percent of commuters’ cars have only one occupant. When it comes to free parking, commuters, and solo driving in the US, all percentages are in the nineties.

Although drivers park free 99 percent of all their trips, you probably feel that you pay for parking on more than 1 percent of your automobile trips, and perhaps you do. Many of us undoubtedly pay for parking more frequently than others do. Americans make 230 billion vehicle trips a year, so drivers pay for parking 2.3 billion times a year (1 percent of 230 billion), but they also park free 228 billion times a year.

If drivers don't pay for parking, who does? Initially, developers pay for it when they provide all the parking spaces required by zoning ordinances. The cost of land and capital devoted to required parking raises the cost of all development, and this cost translates into higher prices for everything else, so everyone pays for parking indirectly. Residents pay for parking through higher prices for housing. Consumers pay for parking through higher prices for goods and services. Employers pay for parking through higher office rents. Only in our roles as motorists do we not pay for parking because motorists park free for most trips. Everyone but the motorist pays for parking.