Cycles of Car Ownership

The news that grocery delivery service FreshDirect is looking at raising funds to expand into DC and Baltimore is a nice indirect illustration of why I'm so obsessed with things like parking regulations.

The issue here is that which services are available in an urban neighborhood is in part a function of what everyone else is doing. If lots of households in Neighborhood X don't want to drive to the grocery store (either because they don't own a car or else because near-store parking is expensive), then a relatively low-cost grocery service for Neighborhood X is a viable business due to the high volume. And of course conversely, if Neighborhood X has a low-cost, high-volume grocery delivery service then at the margin households are less likely to want a car.

Parking regulations tend to tip this in the other direction. If new apartment buildings all need to provide more parking spaces than market conditions would support, then more residents will be car owners than would otherwise be the case. That will mean less pedestrian-oriented retail and fewer market opportunities for delivery-oriented businesses. That, in turn, makes car ownership much more objectively desirable than would otherwise be the case. The resulting level of car ownership and driving is perfectly authentic—people aren't suffering from false consciousness—and can thus present itself to people as the "voluntary" result of "preferences" and "culture." But in reality, it's in part the result of regulations. The regulations increased car ownership at the margin, which altered the economics of the neighborhood in a way that made car ownership more valuable.

During the 25 years after World War II, the United States employed regulations of this sort as part of an industrial policy oriented around automobile manufacturing, steel, highway construction, and homebuilding. But as a development strategy, I think cars/steel/asphalt/houses has more-or-less run its course. And as environmental policy, it stinks. An alternate strategy based on deregulation of land use, taxation of pollution, and investment in density-facilitating infrastructure would spur further technical and organizational innovations in the service sector to help meet the patterns of demand suggested by intensive land use and lower rates of car ownership.