UCLA Institute of Transportation Studies

This discussion paper argues that cities should discourage off-street parking by levying a tax — a parking impact fee — on new development. Parking generates environmental and social costs or externalities, and developers, left to their own devices, will provide too many spaces from a societal perspective. A parking impact fee can account for these externalities and provide incentives for developers to reduce the oversupply of parking. One practical way to implement such a fee is to repurpose the transportation impact fees that cities already levy on new development. Rather than the current practice of charging a fee for each housing unit or square foot, which discourages housing and commercial development, cities should charge for each new parking space — discouraging parking instead.