This paper exploits the theoretical connections between employer-paid parking at the CBD and city size, urban
welfare, land rents and car commuting using a spatial general equilibrium model with two transportation modes and endogenous residential parking.
Our results show that employer-paid parking at the CBD is an ending parking subsidy that shifts a commuter’s decision towards driving to work by changing the relative costs structure of transport modes. By shifting population densities from locations near downtown towards the suburbs, the subsidy also increases the share of workers driving to work and expands the city size. However, the net impact on residential parking land cannot be signed in general because the effects on housing units and parking spaces per dwelling at a particular location in the city run in opposite directions.
In addition, because employer-paid parking leads urban residents to prefer locations farther from the city core, residential land rent close to the downtown district decreases while, the value of residential land at central-suburban and in the suburbs increases. On the other hand, city residents as group generally benefit from employer-paid parking.N/
