Parking not included: The effect of paid residential parking on housing prices and its relationship with public transport proximity

Abstract

Under-priced street parking is widely considered to be a great urban policy failure and is partly what motivated Stockholm to expand its parking zones for both visitors and residents from 2016 onwards. In this paper we use a unique natural experiment to study the effect of priced parking on property prices in Stockholm suburbs. We find that apartment prices were negatively affected by the unexpected appeal and subsequent revocation of parking fees. This finding is interpreted to mean that the introduction of priced parking yielded benefits to apartment residents in the studied areas, which were capitalized in the price of housing. Based on our estimated results, we find that the implied benefits to residents amounted to the equivalent of approximately €2.5 per day. We investigate whether apartments were differentially impacted based on their distance to public transit but find no strong evidence to support this hypothesis. For single-family homes, no conclusions can be drawn as the standard errors are large in relation to the estimated effects.