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:
Podium/Structured (above ground) $20,000
Internal (Tuck Under or Sandwich) $20,000
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.