Living in Cambridge, MA and having read the zoning by-laws here, I believe the intent is two-fold:
1. To control density of housing to preserve the character of the various neighborhoods. We have very high-density housing areas (small triple-deckers with minimal yards) as well as other neighborhoods with large single family detached housing and large (for a city) yards. The former has much lower off-street parking requirements than the latter, and I think for good reason. A city should ideally have housing stock suitable for a range of income and wealth levels, and putting the onus of providing off-street parking onto the inexpensive housing drives up the cost. Let that stock optimize for less convenient but more affordable and "force" the more expensive housing stock to provide some or all of its own parking demand on-site.
Absent this regulation, you might find less expensive housing projects without on-site parking being proposed next to expensive SFH sites and you'd start to lose the appeal [and value] of the old neighborhoods with their single-family homes. (Think of a restaurant with every other table as the smoking section.)
2. Indirectly, this regulation slows the growth rate of demand for on-street parking, which can be tremendous in some of our neighborhoods. Suppose that you were a long-time resident of an established neighborhood with moderately tight parking. Would you prefer that the new condo high-rise a block away be required to provide on-site/off-street parking, or would you happily back the project knowing that an extra 100 cars would be coming to your neighborhood once completed?
The regulations are largely a codification of the above, as the voters are the incumbent residential property owners and not the land developers.
(As a libertarian, I will also observe that there doesn't need to be a market failure to create regulation, but in this case even I have to admit that some good comes from the regulation, even though I now have to waste time reading the by-laws to determine what type of garage structure I'm permitted to build on my own property.)
> Suppose that you were a long-time resident of an established neighborhood with moderately tight parking. Would you prefer that the new condo high-rise a block away be required to provide on-site/off-street parking, or would you happily back the project knowing that an extra 100 cars would be coming to your neighborhood once completed?
I'd prefer a third option: that people who live there not be allowed to park a car within $X meters of their residence. This only works in high-density areas where there is good public transport, of course.
I always assumed that would be something perfectly well decided by the market.
Does anyone know the failure that requires regulation there?