How we plan, price, and manage parking shapes the cost of housing, the traffic on our streets, and the money available for transit. Each underground parking space adds to the cost of a new building, and buyers and renters pay for it whether or not they own a car. Drivers circling for cheap curb space add to traffic on busy streets. The curb itself is contested: the Toronto Parking Authority’s own report lists bike lanes, CaféTO patios and RapidTO transit lanes among the uses competing with parked cars, and meter revenue helps fund the city budget. Decisions about all of this are usually made one building, one block or one permit street at a time.
One of the largest of those decisions is now under review. In December 2021, Toronto removed most of its minimum parking requirements for new buildings. In May, City Council asked staff to study whether the requirements should return in Scarborough, and whether new condominium, townhouse and multiplex buildings could be kept out of the residential permit program. The worry behind the request applies wherever new housing goes up: if new buildings include little parking, residents’ cars will end up on neighbourhood streets.
The research of Donald Shoup, the legendary academic and economist who died in February 2025, explains both where that worry comes from and how to address it. Shoup proposed three reforms designed to work together. Toronto adopted the first in 2021, has taken partial steps toward the second, and has not tried the third. Shoup’s work predicts spillover onto residential streets when a city removes parking requirements but leaves curb parking nearly free. Toronto should finish the reform rather than reverse it.
Shoup’s three reforms
Shoup’s 2005 book, The High Cost of Free Parking, argued that free parking is never free. Its cost is built into rents, home prices, store prices and property taxes, and everyone pays it whether or not they drive. In 2025, his former student Daniel Baldwin Hess edited The Shoup Doctrine, a collection in which 37 planners, economists, journalists and parking professionals assess how his ideas have worked in practice. The book organizes his work into three reforms: remove off-street parking requirements, charge the right price for curb parking, and spend the meter revenue on the blocks that generate it.
The first reform starts with how parking requirements were set. Planners copied ratios from other cities or from surveys of peak demand at sites where parking was free, then required every new building to supply that amount. The cost of each required space is folded into the price of the building, so households without cars pay for parking they do not use. In Toronto the cost is large: a construction industry group told the city’s planning committee in 2020 that an underground space downtown can cost as much as $100,000 to build. Ending requirements lets builders supply only the parking that buyers will pay for, which keeps that cost out of homes for households that do not need it.
The second reform sets a simple target for curb parking: the lowest price that leaves one or two open spaces on each block. Prices vary by block and time of day, and the city adjusts them based on measured occupancy rather than through the budget. San Francisco tested the idea at scale through SFpark, which aimed for 60 to 80 percent occupancy. Researchers who evaluated the program estimated that it moved blocks toward that range and cut the time drivers spent searching for parking by about half. Less time searching means fewer cars circling the busiest streets.
The third reform returns the money to the street. Shoup’s best-known example is Old Pasadena, which had no parking meters until 1993. Merchants opposed meters until the city agreed to spend all the revenue on public improvements in the district. The city borrowed $5 million to rebuild sidewalks and alleys, repaid the debt from the meters, and paid for added public services on the metered blocks. Shoup credited the arrangement, which he called a parking benefit district, with a major part of the district’s revival.
The three reforms depend on each other. Shoup argued that cities impose parking requirements mainly because curb parking is underpriced: without requirements, new residents and customers would crowd onto free streets. Correct prices at the curb remove that reason. Returning the revenue to the neighbourhood gives residents and merchants a reason to accept the prices.
What Toronto has already done
In December 2021, City Council removed most minimum parking requirements for new development and introduced maximums in their place. The new car parking rules took effect in February 2022. Requirements for visitor parking and accessible parking stayed. The province later went further around transit: a 2024 change to Ontario’s Planning Act prohibits municipalities from requiring parking in major transit station areas, and that prohibition took effect in the 120 Toronto station areas the province approved in August 2025.
The city’s own parking monitoring program shows the 2021 decision mostly confirmed what was already happening. Average resident parking in new development fell from 1.08 spaces per unit in 2016 to 0.36 in 2021, before the bylaw changed. Of projects in the 2019 development pipeline, 46 percent had been approved with less parking than the old bylaw required, through variances and rezonings. Since the change, the average has held at about 0.32 spaces per unit. Staff found that the projects proposing little or no parking are mostly in walkable areas well served by transit, and that visitor parking has declined less in the inner suburbs. Developers still build parking where buyers want it. Toronto’s condominium market has also long sold parking spaces separately from units, a practice Shoup recommended, so buyers who do not need a space do not pay for one.
On the second reform, Toronto has moved in Shoup’s direction. The Toronto Parking Authority manages more than 20,000 on-street spaces, and in 2026 it raised most rates again. Most spaces went up 25 cents an hour, with larger increases on high-demand blocks downtown, in North York Centre, in Yorkville and near the University of Toronto. The authority’s report describes the goal as pricing to encourage turnover, and its review considered utilization and price elasticity. That reasoning is close to Shoup’s. The method differs: rates are set through a periodic citywide review tied to the budget, rather than adjusted block by block to hit an occupancy target.
On the third reform, Toronto has not started. Meter revenue supports the city’s budget as a whole, and none of it is set aside for the blocks where it is collected.
Why less parking does not mean more congestion
The most common objection to removing parking requirements sounds like common sense. People will still own cars, the new building has nowhere to put them, so the cars end up circling neighbourhood streets and adding to congestion. Shoup’s research answers the objection in four parts.
First, requirements do not decide whether people own cars. They decide who pays for the parking. When a space comes bundled with every unit, a household has already paid for it, so owning a car costs less at the margin and owning a second one looks reasonable. When parking is optional and priced separately, households without cars stop paying for it and households considering another car see its full cost. Over time, required parking produces more car ownership than optional parking.
Second, congestion comes from trips, and parking at the destination shapes how many trips are made by car. When every office, store and apartment is required to offer abundant parking at no visible cost, driving becomes the easiest way to make almost every trip.
Third, searching for cheap curb parking creates traffic of its own. Shoup compiled studies of congested downtowns from 1927 to 2001 and found that, on average, about 30 percent of cars in the traffic flow were cruising for a space, and the search took about eight minutes. That figure is often misquoted. The studies measured the worst streets at the worst times, and more recent research for the US Federal Highway Administration found that between 5 and 7 percent of trips in Ann Arbor and Seattle included excess searching. The same research found that in San Francisco, cruising rose sharply in some metered areas as soon as the meters switched off for the day. Free curb parking draws drivers to search for it.
Fourth, spillover onto residential streets is a curb pricing problem. In Toronto’s permit areas, a resident with no parking on their property pays $24.23 a month plus HST for an on-street permit, or about 80 cents a day. A space in an underground garage costs tens of thousands of dollars to build. When the street costs almost nothing and the garage costs a great deal, households use the street. Reinstating garage requirements would raise the price of new homes without changing that calculation for anyone who parks on the street now.
Neighbourhoods far from rapid transit, many of them in the inner suburbs, face a harder version of the problem. Where buses are slow and infrequent, many households need a car, and pricing the curb raises costs for people with few alternatives. Shoup’s reforms reduce car use at the margin. They do not build transit. Parking requirements do not build transit either, and a building approved today with a large garage will shape how its residents travel for decades, long after new transit lines open.
Pricing the curb
Toronto’s next step on meters is to set prices by measured occupancy. The Parking Authority already collects payment data through its pay stations and the Green P app. A program on the SFpark model would publish a target, such as one or two open spaces per block, measure occupancy by block and time of day, and adjust prices on a fixed schedule. Prices would rise where blocks are full and fall where spaces sit empty. Seattle already adjusts its meter rates each year, up or down, to meet occupancy targets.
The same logic applies to residential permits. Toronto already prices permits in tiers: $24.23 a month for a resident’s first vehicle with no parking on the property, $70.35 for a second vehicle, and $97.97 for a resident who has a driveway or garage and wants the street for convenience. Some permit streets also have wait lists. In Shoup’s terms, a wait list signals a price below what the space is worth. Where streets are consistently full, the city could raise the price of second-vehicle and convenience permits first, then move the base price toward the value of the space in that location.
Permit rules also vary from street to street. The same city page notes that one district alone has more than 70 combinations of permit parking hours, each developed over time with local councillors and residents in response to specific concerns. A consistent citywide method, with prices set by measured demand, would simplify that patchwork.
Council has already asked staff to study one related tool: keeping new condominium, townhouse and multiplex buildings out of the permit program. Exclusion manages the curb directly, and buyers would know before they purchase that the street is not available to them. Pricing has one advantage over exclusion: a household that values the space more than its price can still use it. Both approaches address spillover more precisely than a garage requirement, and both cost new homebuyers far less.
Putting parking revenue to work
Higher parking prices are unpopular when the money disappears into a general budget. Toronto’s recent rate increases drew the familiar objection that drivers pay more and see nothing in return. Shoup’s third reform changes what residents and merchants see. When a share of meter revenue stays on the street where it was collected, the price pays for wider sidewalks, street trees, lighting, benches, bus shelters, cleaning and snow clearing that people can point to.
Toronto has natural partners for a pilot. The city’s business improvement areas already manage local streetscape budgets, and the Toronto Association of Business Improvement Areas endorsed pricing in 2025 as a way to improve parking availability. A pilot could return a share of new revenue, above a baseline the city already collects, to one or two busy BIAs. The city keeps its existing revenue, the BIA gets a new source of funding, and both have a reason to support prices that keep spaces available. Pasadena avoided a loss to its general fund the same way: Old Pasadena’s were the first meters in the city, so returning the revenue cost the city nothing it already had.
Other cities have applied the idea to residential areas. Austin created a parking benefit district in its West Campus neighbourhood in 2005 after residents raised concerns about spillover parking from nearby commercial and educational institutions. Meter revenue there pays for sidewalks, crosswalks, transit shelters, bike lanes and street trees, while residents receive permits that exempt them from the meters. Washington, D.C. began a pilot in 2008 that directs most of the revenue to walking, cycling and transit improvements in the district.
Parking revenue can also support transit. In San Francisco, one agency runs both curb parking and the Muni transit system, and before the pandemic, parking fees and fines made up about 28 percent of its projected revenue. Toronto’s meter revenue is much smaller, and on its own it will not fund new transit lines. Directed locally, it can pay for the pieces that make existing transit easier to use: shelters, lighting and sidewalks on the way to stops, and the curb changes that let buses move through busy blocks.
Revenue return also fits how parking decisions are made in Toronto. The municipal code requires the Parking Authority to consult every ward councillor whose ward is affected by a rate change. A parking benefit district gives a councillor something to bring back to the ward along with the higher price.
What next?
The staff review council requested in May will likely reach the council elected on October 26. The evidence points to keeping the 2021 decision. Parking supply in new buildings was falling for years before the bylaw changed, developers still build parking where buyers want it, and provincial law already prevents requirements around transit stations.
The spillover concern calls for the two reforms Toronto has not finished. On meters, the Parking Authority can move from periodic citywide increases to prices set by measured occupancy, block by block. In permit areas, the city can price permits closer to the value of the space, or keep new buildings out of the program where the street is already full. On revenue, a pilot with one or two business improvement areas would test whether returning part of the money to the street changes how residents and merchants view the prices.
None of this replaces better transit, which remains the condition for lower car dependence in much of the city. Shoup’s reforms price parking at its value and spend the revenue where it is collected. Applied across Toronto, they would keep parking costs out of new homes for people who do not need a space, reduce the circling that adds to congestion on our busiest streets, and give neighbourhoods a steady source of money for sidewalks, streetscapes and better access to transit. Toronto took the first step in 2021. The second and third steps would address the concerns residents across the city are now raising.