There are two types of markets for parking in Washington DC: the private market, which tends to charge what the market will bear, and the government, which charges a price that’s deemed to be “fair” and “non-exploitative” to the constituents in residential areas. How’s that working out for everyone?


Not very well, it turns out. The “fair” price on residential streets is just $25 a year, which is less than one percent of the private market rate. As a result there’s a large excess demand for parking on city streets, which has created a few predictable and undesirable consequences: For starters, people spend a lot of time driving around looking for “free” on-street parking, which congests streets, increases pollution, and makes streets less safe for pedestrians, as automobiles do quick U‑turns and other risky maneuvers to claim a spot that suddenly opens.


The pro-free-on-street parking people will acknowledge these costs to some degree but would dismiss them in the name of “fairness” by trotting out the canard that some poor people drive to work and therefore this reduces inequality. The problem is that most people with cars parked on city streets are wealthy and most of the attendant consequences of the lousy deal are all borne by the less-well-off, most of whom do not own cars.


Making residential on-street parking nearly free means that those who avail themselves of it fight fiercely to limit competition for those spots. As a result, every proposed housing development in these neighborhoods are bitterly fought in the name of (pick one) historical preservation, neighborhood harmony, architectural purity, or some other vague sentiment that belie the true motive. In the last few years residents of Northwest DC have sought to declare an empty lot and a parking lot as “historic” and prevent any development on them, for no reason other than some fraction of those in the new apartment buildings to be constructed may also want to park on the street.


New developments in the city take years to get approved and are invariably shorter than the existing buildings they abut. The result of all this is that housing becomes more expensive, and middle-income residents find themselves struggling to remain in the neighborhood.

The city has come to realize this problem and has decided to combat it–not by tackling free parking or explicitly encouraging the construction of more housing but by strengthening rent controls in the city. Such a step would only exacerbate the housing shortage: if we are going to cap rental prices then developers will build less rental housing and either build more condos that they can sell and escape before more restrictions enter that market or else they will forego investing in housing altogether. There is already considerable backlash against developers who buy, expand, and subdivide large townhomes in the area for being “anti-family” although having four two bedroom apartments that cost $500,000 each is infinitely more amenable to middle income households than a single $2 million home.


Rent control will only make the city’s housing problem worse, but from a political perspective it works because it allows the rich progressives who benefit from the city’s inane parking giveaway to tell themselves that they aren’t the cause of the problem. Rent control helps those who currently have housing that will be protected but it hurts every middle class family who will be looking for housing in the future.


The true solution to high housing costs is simple: The government should stop giving away a scarce asset and set a market price to be charged to the wealthy residents of Washington DC who park their cars on city streets. Providing an implicit subsidy to some of the richest people in town is not only bad land-use policy but it also costs the low and middle income earners plenty by creating the economic conditions that dampen the construction of new homes, pushing up their rents.


And if the progressives and activists who make up the bulk of my neighbors have a problem with a policy change that reduces inequality, improves the environment, and makes the city more livable, they’re going to have to work a lot harder to defend their free parking.