Parking Externalities in Commercial Real Estate

27 Pages Posted: 4 Jun 2010

See all articles by Bowman Cutter IV

Bowman Cutter IV

affiliation not provided to SSRN

Autumn DeWoody

affiliation not provided to SSRN

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

Cutter IV, Bowman and DeWoody, Autumn, Parking Externalities in Commercial Real Estate. Real Estate Economics, Vol. 38, No. 2, pp. 197-223, Summer 2010, Available at SSRN: https://ssrn.com/abstract=1612467 or http://dx.doi.org/10.1111/j.1540-6229.2010.00265.x

Bowman Cutter IV (Contact Author)

affiliation not provided to SSRN

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Autumn DeWoody

affiliation not provided to SSRN

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