Parking Space Value
GroundSwell, November-December 2005]
Cars, trucks and buses in this great city had almost come to a
complete halt. The traffic did not have the room to either move or
stand still. The crisis was so severe that it was no longer possible
to postpone decisive action. The city council knew that they had to
do something drastic and they did. They devised a master plan to
control the flow of vehicular traffic. It was rather a simple plan.
They knew that private car ownership had reached epidemic
proportions. Families now owned three or four cars. Limiting the
number of cars each family could own was too complicated and raised
more problems than were solved.
Therefore, individual parking spaces in the streets were numbered.
All the streets in the city would be listed with their numbers on a
master sheet. All car owners would be noted and it was decided that
all owners of cars on each block would be entitled to take part in a
public raffle. It was agreed that each car owner should have a
chance of winning a parking space reasonably close to where they
lived. They divided the neighborhood so that no one would walk more
than three blocks to park their car. All the names of car owners
were put into a container and then lots were drawn. If there were
more car owners than spaces, then there was some element of worry.
Some areas had more spaces than cars. Therefore the city could
draw on other areas close by that had an excess of spaces. Two years
would pass before all objections, quarrels, and charges of fraud
were settled and peace was secured. But it was done. The
unfortunates who did not win faced the prospect of paying for
private parking or not owning a car. Many felt that this was best
and were not too unhappy when they were forced to make this
Areas considered to be public had only parking meters and were not
assigned to anyone. Designated spaces also had meters and were used
by others when their owners were not occupying their spaces. A limit
of half an hour use was set and then the owner could park there
Each parking space was assigned to the car itself. As long as the
car was in use, the space belonged to you. If the car was junked the
ownership of the space reverted to a general pool and new drawings
were held. It was hoped in this way to give almost all car owners a
chance to own a space at some time. It was also decided that
ownership of the space could be transferred with the sale of the
car. This would cause the turnover of spaces as people purchased new
cars and they then would need new spaces. The fact that people would
be discouraged from buying new cars knowing that the loss of a space
was mandatory was accepted for the good of the city. After much
debate objections and wrangling, the plan was finally accepted.
The plan had some very important results. It limited to a
tolerable amount the number of cars that the city could absorb.
Anyone not owning a parking space or access to private parking,
would not own a car. Private car traffic was at an acceptable level
because many cars had to be sold and shipped out of the city. The
streets were now less congested. Most people became accustomed to
the pleasure of having the freedom to drive on the streets of the
city. Although trucks and taxi cabs offered other problems, they did
not seem as severe now that the private car problem had been solved.
Other changes were taking place that were not noticed at first.
The price of old cars did not drop as occurred before the master
plan was effected. The value of cars declined in a predicted manner.
Books were printed quoting wholesale and retail costs of old cars. A
car had a life value of ten years or so. After that time, it would
be difficult to sell at any price. Now it appeared that old cars
were rising in value. Since a loss of parking space accompanied the
junking of a car, every effort was made to keep the old car rolling.
The auto repair business began to boom. More and more young men
trained to become auto rejuvenators, as they were called. Schools
opened and were successful in turning out great numbers of
graduates. Abandoned buildings now showed new signs advertising auto
repairs of all types. The old buggy did not look as old as it once
No one could have imagined that people would boast of owning an
old car more so than a new car. Because of the ownership of a
parking space, it was happening. More old cars remained on the road
than before. The sale of new cars dropped drastically. Who wanted a
new car? Where could it be parked? All the parking spaces were
occupied both public and private. Except for a short visit of less
than a day, new cars were not welcome. Old cars were now more
valuable than new cars. The price of an old car was not determined
by the old standards. It did not matter if the engine was not the
best. Its overall performance was not important. In fact, a car
could be practically dead but it would never be abandoned. Its value
was in direct proportion to the location of its parking space. The
affluent neighborhood cars had a higher price than cars of a less
desirable neighborhood in spite of being of the same make, year and
condition. Two cars of equal cost when new were now worth more or
less depending on the location of the parking space assigned.
Auto showrooms in the city took on a strange appearance. No longer
were new cars exhibited prominently, if at all. They were filled
with shiny old cars. Time passed and old cars did not need to shine
at all. Old cars needed a fashionable parking space. The buying and
selling of parking spaces seemed more and more important than the
condition. Unbelievably, the cost of a car assigned an exclusive
parking space was now double the selling price of a new car and
A speculative market arose. People would buy old cars with their
space and never use the car. It was held for a rise in value which
did not take long to come. The car was moved occasionally to prove
that it could be used. The city fathers began to wonder about the
new game in town. Old cars are now more valuable than new cars. This
was strange but acceptable because the prospect of going back to the
old way was too horrible to think about. The streets were clear and
usable. After all, that was the problem to begin with. Pollution was
less because of the decreased number of cars in use. The experts
felt that soon the advantage would disappear if the old cars were
not kept in tune.
Time passed, nothing changed. One day a new thought arose. Here
was a new source of a tax. It's only fair that each space pay
something to the city for the monopoly or right to a parking space.
The question of how to levy this tax was not easily settled. Many
proposals were tendered. The dispute ranged on. Some said, "The
total value of the car and spot should be evaluated or assessed, and
then the tax should be levied on it."
Example: car - $ 500
space - $5,000
$5,500 x 1% tax rate = $55.00 tax
Some said each space should be taxed at $50 regardless of its
value. Some said tax the value of car only, the bigger the car the
more valuable, the greater the tax. But most people argued that it
was the location of the space that created the greater part of the
value. Also, the car was originally taxed when built. Also, the
parts and repairs were being taxed. So the decision to assess and
tax the parking space only was implemented.
The value of the old car was directly related to its parking space
location, therefore its value could be determined by replacement
value only. But who would want to build an old car so as to
The conclusion reached was as follows: The location formed its
greatest value. Therefore the car had very little value and it was
decided to ignore this completely. Henceforth, for the purposes of
taxation, the location value of a parking space would be used to
determine the tax. The tax rate would be varied from year to year,
depending on how much money would be needed in the city. The system
worked well and most people were happy.
The auto industry was very unhappy. Unemployment rose, factories
were shut down. Total production dropped and the industry faced the
prospect of other cities adopting the great city's plan. What to do?
Most people could not believe the simple solution. Why not keep the
present system except for one change. The present owner of the
parking space would be given the right to park any car that they
owned on his space.
With the simple change came the avalanche. The new car market
exploded. The desire to own a new car, with prestige lower upkeep,
less mechanical problems, etc., became desirable again. Old cars
were junked and most spaces were occupied by new cars. The
fashionable, affluent neighborhood sported their Mercedes, Porches,
Cadilacs and Lincolns. Everyone was happy again. The bad aspects of
the plan had been eliminated; the good was retained.
And still the thinking went on. Why should individuals who owned
their parking spaces be allowed to sell them. The going rates for
spaces had reached $15,000 per parking space and more. This price
was gained in the very exclusive neighborhoods; other neighborhoods
paid $10,000, $5,000, $1,000, $500 down to $50 a year. Since the
people demand for car space created this value, why not tax this
value and possibly eliminate or substitute for other nuisance taxes.
It was decided that all parking spaces would be assessed at their
market value. The market place or speculative market knew how much
each space was worth and the brokers of this market were asked to
help assess this market. After the values were set, an annual 10%
tax would be levied on this space.
Example: Space value = $15,000 @ 10% tax = 10% x $15,000 = $1,500
annual rental value tax.
A great sum of money was realized and some of it was used to hire
more police. They were needed to police the streets so that cars
would not be broken into or stolen. It was also noted that the
stolen car rate dropped drastically for two reasons. Cars could now
be parked anywhere and there were more police guarding the streets.
Also, the general crime rate dropped. More police meant less crime.
The fringe benefits accruing from this new tax source continued to
grow almost daily.
The city could not believe how well its master plan was working.
Time passed; other suggestions were offered to help the city solve
its problems. Some people suggested that taxing all other land and
not taxing buildings could easily produce great benefits.