In the 1950s, when car ownership was becoming widespread across the industrialized world, governments worried about where all these new drivers were going to park. In response, cities instituted rules on minimum parking requirements. Property developers were forced to build out space for parking spots according to the size of a building.

The policy seemed sensible on paper, but has proved disastrous in practice. By forcing developers to build massive parking lots, these rules increase traffic and harm the environment by encouraging more people to drive. It also leads to inefficient land use—the parking lot next to that downtown grocery store might be high-density housing or office space if market forces were allowed to play out.

“If developers were allowed to face directly the high land costs of providing so much parking, the number of spaces would be a result of a careful economic calculation rather than a matter of satisfying a legal requirement,” writes economist Tyler Cowen in the New York Times (paywall). “Parking would be scarcer, and more likely to have a price… and people would be more careful about when and where they drove.”

Donald Shoup, a professor of urban planning at the UCLA and author of the book The High Cost of Free Parking argues that Los Angeles’s minimum parking requirement of one parking space per every 250 square feet (23.2 meters) of retail space can nearly double the cost of building a shopping center. These costs are subsequently passed on to customers, and offer no benefit to people who don’t own cars (primarily the poor).

That is why it is noteworthy that Mexico City mayor Miguel Mancera recently announced that his city, the largest in North America, is scrapping minimum parking regulations. Rather, it is shifting to maximum parking rules. Whereas before developers were required to create one parking space for every 30 square meters of office space, that is now the most parking they are allowed to build, reports Angie Schmitt at Streetsblog.

Developers who build more than 50% of the maximum allowable parking spaces will be required to pay a fee. Those fees will go to improving public transit and subsidizing housing. In a city where less than a third of residents own cars, generally the wealthier ones, this is a highly progressive policy.

Other cities have been slow to address the distortions created by minimum parking requirements. Shoup writes in Planning magazine (pdf) that a number of US cities have decreased their minimum parking requirements in order to encourage dense or affordable housing. Still, the only city in the US to completely get rid of minimum parking rules is Buffalo, New York. Though European cities generally have more progressive driving policies—cities are more likely to charge congestion taxes on drivers as well as set lower minimums parking requirements—nearly every major European city still has some minimum parking regulation on the books.

Mexico City’s move may serve as a watershed moment. Parking is a luxury, not a right. People who don’t drive in cities shouldn’t have to subsidize those who do.