Parking tradeoffs - on-street and off-street

Requiring developers to build off-street parking is expensive.  That’s the key takeaway from a City of Portland study on the impacts of parking requirements on housing affordability. (This study was linked to in a previous post)  To illustrate the point, the city looks at a hypothetical development and considers a number of different scenarios for providing parking to the building.  The results show the trade-offs involved.  The method of providing parking not only adds to the cost, but also limits the ability of a building to fully utilize a site.

For example, providing parking via an off-street surface lot is rather cheap to build, but has a high opportunity cost – that land used for parking cannot also be used for housing. The study keeps the land area and the zoning envelope constant: that is, the off-street parking must be provided on-site, and you can’t get a variance for extra building height.  The trade-offs for this hypothetical development, then, are between cost (and the rent you’d have to charge to get a return on your investment) and in utilization of the site.

Assumed cost per parking spaces are as follows:

Surface $3,000
Podium/Structured (above ground) $20,000
Underground $55,000
Internal (Tuck Under or Sandwich) $20,000
Mechanical $45,000

Apply those options to a hypothetical development site, and you can see the trade-offs emerge.  In every case, requiring parking means fewer units can be developed, and each of those units is more expensive to provide.

Requiring parking makes all of the apartments more expensive, but for different reasons.  The surface parking is cheap, but the real reason the  rent is high is due to the opportunity cost – the surface parking option only allows for the development of 30 units instead of a hypothetical max of 50.

Underground parking is also substantially more expensive in terms of rent, but also in terms of construction costs – the rent increase isn’t that much higher than the surface option (in spite of the $50k per space cost differential) due to the fact that underground parking allows for substantial utilization of the site.   Even underground parking does not allow for full utilization, as the ramps to the garage take up space that could be used for housing in the no-parking scenario.

Requiring developers to add parking in all of these cases jacks up the rent they must charge to make these developments pencil out.  The underground parking example is a 60-plus percent increase in the monthly rent – and it’s a dollar figure that probably ensures that a developer couldn’t just rent out unused parking spaces and break-even on the proposition.  Instead, that cost gets passed through to the renter – both the cost of the space, as well as the opportunity cost of not building more housing.

The other thing to remember from this is that all of those options for how to park a building might not be allowed.  Tuck-under parking might make sense (get a few spaces at a reasonable cost), but if the zoning code requires more than 0.25 spaces per unit (as it does in Downtown Brooklyn), that method would not be allowed by the zoning code.  Podium parking is also reasonable, but that means you’re devoting the entire first floor to parking – meaning you can’t use it for housing units or retail or any of the other ground-floor uses that make for vibrant streetscapes.

Framing the issue. One other page on Portland’s website does a nice job of framing the issue of zoning code reform for on-site parking requirements.  Instead of talk about reducing on-site parking requirements, we’re talking about places where parking is allowed, but not required.  Soldiers on the automotive side of the “war on cars” (a phrase worthy of the scare quotes) will frequently frame this as removing parking.  This kind of language is both more accurate about potential changes and less inflammatory in skirmishes of this “war.”

More on-street parking isn’t always a problem. One of the fears of these parking-free developments is that not all of those residents will be car-free.  The Portland study shows this to be true – but it also shows that this isn’t really a problem.  Even at the peak utilization of on-street spaces surrounding these new parking-free buildings, 25% of the spaces are still available (page 2 of this document), meaning that there shouldn’t be a problem for residents in finding an on-street space.

Even if on-street parking isn’t actually a problem yet in Portland (no matter how it is perceived), that can always change.  When demand for that parking exceeds the supply, then you turn to parking management.

Managing on-street parking.  If we’ve established that off-street parking requirements increase the cost of housing, and we know that not all residents of a parking-less building will also be car-less, then management of scarce on-street parking will be critical. The Portland Transport blog points to a proposal in Portland that has a nice structure.

The proposal would divide part of the city into essentially three kinds of areas:

  • Commercial areas: all on-street parking is metered.  Anyone may park, but all must pay.
  • Residential areas: residents (with permits) are prioritized, non-residents can park for free, but must obey time limits (similar to DC”s current RPP framework).
  • Bordering areas: on streets adjacent to commercial areas, all spaces are metered but those with residential permits do not need to pay the meters.

Now, the devil is always in the details for things like permit zone sizes, cost of the permits, meter rates, etc.  However, the basic structure does a nice job of shifting the emphasis on what kind of parking should be prioritized in certain areas.

Beyond management. One benefit of allowing more parking-free development would be to increase density in the area, thereby supporting more transit service and key destinations within walking distance.  The more parking-free units there are, the easier it gets for residents to live car-free.  Each of these represents a bit of the virtuous cycle.

9 comments to Parking tradeoffs – on-street and off-street

  • charlie

    Pardon me if I don’t find this convincing.

    Looking at the model they used, they jammed it to support their outcome.

    A larger building would make underground look better, and you can also do two levels of podium parking (as in the building I live in), although on a hill it looks as if one is underground.

    I can see why a place like Portland can aborb the new cars on the street. The question is whether that is true in DC.

  • Alex Block

    Charlie,

    Yes, a larger building would make underground look better, but that’s not the point of the analysis. They held the size of the building constant for a reason.

    Point being, providing parking on-site for these lower-density zones (3-4 story construction) is even more problematic than requiring it for larger lot, high rise development.

    And the base point also still stands: All forms of parking requirements make the buildings more expensive.

    If it’s an amenity for the developer to market to renters/buyers, that’s one thing. Build it into the cost just as you would granite countertops and a sub-zero range & fridge. But no one requires those things as part of the zoning code. Nor should we require parking spaces in the same way.

    Allow, yes. By all means. But require? No.

  • […] on the Network today: City Block calculates how much parking inflates housing costs in Portland. Systemic Failure reports that […]

  • charlie

    Alex, you need to pick a side here. Do we have a street parking problem in DC, or not?

    (my own view is we don’t, except in 2-3 neighboorhoods. and in those we do need to put more underground parking in)

    And those price points seems more related to the very low income in the portland area, compared to DC.

  • Alex Block

    Alex, you need to pick a side here. Do we have a street parking problem in DC, or not?

    Well, that’s not really a question that makes any sense.

    (my own view is we don’t, except in 2-3 neighboorhoods. and in those we do need to put more underground parking in)

    If we do have a parking problem, why do you assume the solution is to build more parking? You might have to face the fact that it’s simply not cost-effective to build parking in the first place.

    And those price points seems more related to the very low income in the portland area, compared to DC.

    The price points aren’t the focus. The key is a) the relative difference between the options presented, and b) the fact that the prices are what a developer would need to charge in order to cover his/her costs, plus a reasonable ROI (either 7% or 10% in the table).

    It’s a measure of cost, not of demand. They’re presenting it in terms of monthly rent, because that’s a far more accessible way to make the point to an average reader.

  • This is EXACTLY what we are going through in Ithaca, NY. We are stuck in out-dated zoning for minimum off-street automobile parking of .5 spaces per bed for residents.

    The main reason why Collegetown of Ithaca, NY (Cornell) does NOT HAVE A GROCERY STORE* for the last ~20 years is because of high land value and Min. Parking Requirements.

    Proposed 50 unit apartment with 103 beds, 60′ wide property with a main commercial tenant who just agreed to a 20y lease is the local Cooperative Market. So now the development is to be decided upon whether to allow people the option of having this awesome proposal and healthy foods in Collegetown, the option of paying for housing WITHOUT subsidizing automobile parking at the tune of several hundred dollars per month higher rent. Or the building could just sit there–4 apartments, unrented for the past 5 years or more.
    I hope the board makes a decision to help people and allow this to go through.

    http://www.cornellsun.com/content/images/collegetown-crossing

    *also the most urban dense area in Tompkins County.

  • There is really a simple answer to zoning parking requirements. Remove them. Let the market decide!

    Who car argue with that? As cities better manage their on-street parking, such as with demand management systems, and garages and City run lots, if there is a low demand for parking and a property owner wants to use the space for people instead of cars, we should let them.
    It’s really about time for cities to end this addiction that the parking and traffic crisis will be solved by building more parking spaces, when it seems the exact opposite is true. More parking spaces allows for more cars and more traffic.

  • charlie

    Sadly, I am looking at buying a place in DC. The place that I like basically did the math here — they went with a very small surface lot. Giant negative, although they are just at the price point I can afford. Sigh.

  • […] That risk-aversion applies to parking, too – and perhaps explains a great deal of the reluctance to embrace a whole host of parking reforms, both for on-street parking management, but also for zoning code off-street parking requirements. The evidence for the ineffectiveness of these requirements in managing on-street parking is huge; the unintended consequences are large. […]

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