Market Urbanism

Liberalizing cities | From the bottom up

“Market Urbanism” refers to the synthesis of classical liberal economics and ethics (market), with an appreciation of the urban way of life and its benefits to society (urbanism). We advocate for the emergence of bottom up solutions to urban issues, as opposed to ones imposed from the top down.

Hell freezes over, or: the one in which I agree with Randal O’Toole’s argument over Shoup’s

By

Cato's DC headquarters

I never thought the day would come, but I actually find myself taking issue with Donald Shoup’s recent criticism of the Cato Institute (which Randal O’Toole works for) and its own DC headquarters’ employee parking program. While I agree with Shoup’s more general critique of Cato’s stance on transportation and land use issues, and consider him to be the greatest urbanist since Jane Jacobs, his attack on Cato for giving its employees free parking appears to me to be misdirected.

The gist of his argument is that since Cato offers free parking to its employees and neighboring NPR (both on Massachusetts Ave. in DC) charges its workers for parking, NPR is taking the “free market” approach and Cato is taking the “free parking” approach. But I don’t see how this comports with Shoup’s broader research, which focuses on parking policies of governments and not private (well, sort of) entities like NPR and Cato. Corporations are allowed to take a command-and-control approach to their operations and still be considered “free market institutions” as long as they are competing in a free market, and in fact some of the most successful ones are (Facebook, for example, is still run as Mark Zuckerberg’s own personal fiefdom).

Now of course, Cato is not operating in a free market when it comes to parking. It likely was forced to build some amount of parking by law, and even if it wasn’t, the influence of neighboring areas’ land use policies looms large on a single building like Cato’s. There’s also the issue of employer-provided parking as a fringe benefit not being taxed, which Shoup mentions. He then suggests that Cato offer a parking cash-out program, whereby they pay employees who choose not to park the cash equivalent of the spot, which Cato doesn’t appear to currently offer. Maybe it’s because of the tax effect, but it seems more likely that Cato just doesn’t want to take on an added expense (paying its employees not to park) when it’s already built the parking infrastructure under the old rules.

It just doesn’t seem fair to blame Cato for what is essentially a program of government policy. Cato and all the other businesses that provide free parking are simply acting rationally when presented with status quo incentives. I do think that Cato should be working harder to do away with the incentives for cars and roads in the marketplace, but that doesn’t seem to be the argument Shoup is making in this article.

Furthermore, I’m worried that this sort of finger-waving at private firms for providing free parking will give ammo to Shoup’s critics who claim that he’s anti-free parking rather than anti-mandated and subsidized free parking. I understand that his using the examples of the NPR and Cato HQs is meant to be symbolic and rhetorical, but I personally found it to be a bit muddled. It’s only a minor disagreement, and like I said, I still have the utmost admiration for Shoup’s work, but I felt it needed to be said.

  • I think you might be missing the bigger picture here. You seem to agree that zoning regulations requiring a certain number of parking spots constitute a subsidy (which is what Shoup’s research is about). Why wouldn’t you agree that a company offering free parking effectively subsidizes the car ownership of their employees. It seems like a pretty straightforward argument. If Cato, for example, paid the metro fare for all it’s employees, then that would be a subsidy favoring public transport. And this is ironic, since Cato pretends to be a libertarian think tank – they should embrace a potential market like this, and not muddle about with these sort of subsidies.

  • Leo Petr

    > will give ammo to Shoup’s critics who claim that he’s anti-free parking rather than anti-mandated and subsidized free parking.

    Are critics who would make this distinction numerous?

  • Stephen Smith

    My point is that Cato is a private entity, and with private entities we don’t call them subsidies, we call them perks. They’re paid for out of money earned in the marketplace, not money taken by taxpayers who have very little choice in the matter. Many offices also offer free coffee as a perk, and yet that’s clearly not a “coffee subsidy” that they should correct if they want to be called “free market.”

  • Daniel

    I’ll still blame Cato, even if technically they are still operating within the free market. Here’s an analogy. Suppose an advocacy group lobbies for raising the state minimum wage, but they pay their own employees less than what they demand the state should mandate. Someone calls them out on this and they say: hey we’re just in the business of changing public policy not in the business of advocating corporate practices.

    I guess this gets to what the whole point of Cato is. Do they simply promote government non-intervention? Or do they promote individual liberty? If it’s the latter, then they are denying their own employees the right to choose how to get to work on a level playing field. It rings hollow to push for a government to do something that you, as a company, are not willing to practice.

  • David Keddie

    Randall O’Toole addresses this question here:

    http://ti.org/antiplanner/?p=3618

    He argues that in a free market without any zoning or minimum parking requirements, nonetheless businesses have a huge incentive to provide free parking for their customers. A good argument can be made that the Cato Institute should charge for parking as a matter of principle, but it’s nonetheless their free choice to provide the perk or not. I don’t follow Shoup in his belief that eliminating parking minimums would change land-use patterns in some significant way. Do we really think that a store that charges for parking will compete effectively with a store that gives it away for free and absorbs the cost into the price of the items?

  • Amy

    I’m almost positive (you can call Cato’s HR department to find out for sure) that Cato offers free or subsidized Metro passes to employees who don’t take advantage of on-site parking. So they’re offering at least a partial cost offset to employees who choose not to drive to work.

  • Tom

    Right on! Could not have said it better.

  • Stephen Smith

    Obviously in the short-run the median American shopping center needs (or has no better use for) all the parking it has, but it’s all about marginal change. There are many places in America where making walking a little easier (by removing parking lots, which act as barriers), transit a little more financially sustainable (by both rising density from fewer surface lots and also an increase in the cost of parking), and driving a little harder (from the increase in cost of parking) will induce relatively large changes – think any innercity area, a lot of “streetcar suburbs,” and a handful of dense, transit-connected suburbs. But over time as the transit-friendly, parking-scarce neighborhoods get bigger they start to border on more and more places, and the walkability has the ability to spread.

    Clearly we’re a long way away from liberalizing land use policy so we’re not going to see which of us is right in the short-run. I could go on forever about why I believe what I do – that a free market would be substantially denser and less auto-oriented than the status quo – but that’s why I have the blog, so hopefully you’ll keep reading and find out why we think the way we do.

Meta