"Paid" Parking at Shopping Malls - convenience or upcharge annoyance?

Part One - Preferred Parking surcharges:

Let me start by establishing the situation. I saw the headline below in my virtual edition of USA Today a couple of days ago (the article has subsequently been updated a couple of times). I had seen a couple of articles here in Colorado about "surcharges" for parking or driving in particular areas in the past couple of years - we have "express lanes" on several of our freeways and a couple of downtown shopping areas have been debating about ending free parking and using parking meters for the first time since COVID. It was also "top of mind" for me from a different setting - in my travels this summer I've started coming across hotels charging for parking not because they are trying to discourage long-term parking (like hotels near airports often do) but simply because the owners see a new source of income.

This article, though, was the first I had seen to focus on the "backlash" - not only shoppers expressing their unhappiness at seeing benefits for those who can pay more (or at least are willing to pay more for the "convenience") but more importantly shoppers actively choosing to take their business elsewhere. That's always a risk for any business - the more "special" programs you offer for your regulars or "big spenders", the possibility increases that some other potential customers will not even show up (and you will never know your actions pushed them away unless they complain on social media or in reviews). So let's start by looking at the USA Today article - this is an AI summary of the article, followed by two quotes on either side of the issue . . .

Next, some video clips from news stations in various parts of the country looking at how these preferred parking programs are being implemented (or ended) in their parts of the country . . .

Part Two - Economic Concepts and Parking:

While reading a variety of articles about issues around parking (many of which I am not going to get into within the scope of this post) I came across an interesting economic blog post from Alts.co (a website for alternative investing strategies) titled "Parking lot economics: The costs of convenience". It did the best job I have seen of summarizing a few of the economic concepts involved with the whole parking issue (along with some of the articles THEY linked to).

Let's start with a couple of graphics/explanations I really liked on the scope of the land usage involved . . .

So here are a few of the economic factors that come into play . . .

• Opportunity Cost - As the graphics below attempt to demonstrate, simply a look at the potential next-best-alternative uses for the land. Parking lots are typically not being built where land demand is scarce, but instead where demand is high.

• Negative Externalities - As an example, according to UCLA economist Donald Shoup’s estimates, in just one 15 block area of Los Angeles during one year, motorists used an extra 47,000 gallons of gasoline and emitted 730 tons of CO2 when they drove 950,000 extra miles looking for parking spaces. He suggests though we should not blame the drivers. Instead, municipalities need to create new incentives.

• Environmental Costs - Cutting down trees and paving over soil increases the risk of flash flooding in heavy rains. In northern climates, that extra pavement has to be plowed and salted in winter. Runoff from the pavement can seep into groundwater, contaminating wells. Parking lots make driving more convenient and walking less convenient. Subsidizing the automobile leads to more air pollution.

• Impact on Inequality - Requiring a minimum number of parking spaces for businesses or multi-family housing is regressive, redistributing wealth away from the poor. After all, the poor are most likely to be willing to rent an apartment with only one parking space or none at all in exchange for lower rent. Forcing every apartment to have one, two, or even three spaces, as some towns do, drives up rents for everyone, but hurts the poor the most, because they spend a greater share of their income on housing than richer people do.

• Privately-owned parking induces public sector costs - A common claim is that parking lots may not produce much economic value, but they also come at little to no ongoing service cost because they require few services. This argument misses a key point about infrastructure costs. Infrastructure—roads, sidewalks, water pipes, sewer pipes, gas and electric and internet lines—exists to service productive land uses: that is, places where people are. Devoting a large amount of land to parking spreads those productive uses farther apart from each other. The resulting infrastructure cost is real and quantifiable. And it's paid by the public at large, through local government and utilities.

• Government Intervention in the Market ends up picking winners (drivers) and losers (non-drivers) - Oversupplying parking leads to parking that is either free or underpriced. This means drivers don’t actually bear the full cost of driving. Unless the driver is paying for a market-rate garage, the cost of finishing their trip and storing their vehicle is at least partially borne by consumers (via developers) or taxpayers (via local government). This artificially lowers the cost of driving, leading a higher proportion of people traveling by car.

To be fair, note that there are two sides to most of the issues listed above (and you could have a good discussion in your classroom on many of them as examples of economics in real life. For example, in most cities drivers are the majority of voters (and thus "could" lobby their government representatives for more parking to be available). Having said that, the trend in most large cities is the opposite, with many cutting down on streets to make way for alternative transportation or mass transit.

Links connected to Preferred Parking surcharges:

These are links connecting to resources used above

"Fashion Outlets of Chicago begin charging for parking at suburban mall", NBC5 Chicago, Feb 2026, https://www.nbcchicago.com/news/local/fashion-outlets-of-chicago-begin-charging-for-parking-at-suburban-mall/3900563/

"Modern parking “meters” give cities the power to reduce congestion" (podcast w/story), Marketplace, Jun 2022, https://www.marketplace.org/story/2022/06/28/modern-parking-meters-give-cities-the-power-to-reduce-congestion

"Paid parking for spots at Mall in Columbia upsets many customers" (video), WJZ News, Aug 2026, https://www.youtube.com/watch?v=TFliIS4EKbE

"Paying to park at the mall? New option at La Cantera sparks debate" (video), KSAT-12, Dec 2025, https://www.youtube.com/watch?v=PiRhGXhu4Zs

"Shopping malls are charging for prime parking. It's not going well", USA Today, Aug 2026, https://www.usatoday.com/story/money/retail/2026/08/26/why-shopping-malls-are-charging-you-for-premium-parking/91450581007/ OR video version - https://www.usatoday.com/videos/life/shopping/2026/08/26/mall-paid-preferred-parking-st-matthews-louisville-ggp-properties/91479172007/

"Shoppers express frustrations over new paid parking option at Mall St. Matthews" (video), WDRB News, Jul 2026, https://www.youtube.com/watch?v=aDKnDoSomXI

"Willowbrook Mall adds paid parking spots - Shoppers at the largest retail hub in Passaic County must pay for the best parking spots" (video), USA Today, Aug 2026, https://www.usatoday.com/videos/news/passaic/wayne/2026/08/04/willowbrook-mall-in-wayne-nj-adds-paid-parking-spots/91162724007/

And I had to include one more - short stories about the "unintended consequences" of preferred pricing strategies (like, in this case, surge pricing)

"Tales From The Parking Lot" (podcast w/transcript), Planet Money from National Public Radio (NPR), Jun 2019, https://www.npr.org/2019/06/21/734762556/episode-921-tales-from-the-parking-lot

Additional Resources and Links:

This is a selection of other links related to the economics of parking in general

"Abolish Parking Minimums. Yes, All of Them", The Daily Economy blog from the American Institute for Economic Research (AIER), Oct 2023, https://thedailyeconomy.org/article/abolish-parking-minimums-yes-all-of-them/

"How Parking Explains Everything" (podcast w/transcript), the Consider This podcast from National Public Radio (NPR), updated Nov 2025, https://www.npr.org/2025/11/28/nx-s1-5621990/how-parking-explains-everything

"The perilous politics of parking (The average car moves just 5% of the time. To improve cities, focus on the other 95%)", The Economist magazine (U.K.), Apr 2017, https://www.economist.com/leaders/2017/04/06/the-perilous-politics-of-parking

“A review of the economics of parking", in the Economics of Transportation (the official journal of the International Transportation Economics Association), Spring 2015, https://www.sciencedirect.com/science/article/abs/pii/S2212012214000562?via%3Dihub

"The Seven Ways We Pay For Free Parking" (blog article), Econlife.com, Dec 2014, https://econlife.com/2014/12/diminishing-free-parkings-negative-externalities/

"The unexpected factor driving US inequality – free parking", World Economic Forum, Jun 2016, https://www.weforum.org/stories/economic-growth/the-unexpected-factor-driving-us-inequality-free-parking/

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