Planners reevaluate parking requirements for affordable housing

By Brian Lutenegger
The most recent issue of Planning, the magazine of the American Planning Association, examines how cutting parking requirements can also improve the supply of affordable housing. Minneapolis lowered multifamily parking requirements in some neighborhoods and the market responded with proposed projects that included fewer parking spaces. This resulted in rents lower than market rates for similar units.
Minneapolis had been offering what most cities extend to developers: tax incentives and development subsidies to create affordable housing units. Three years ago it cut in half the one space per unit parking requirement for larger multifamily projects, and eliminated minimum parking requirements entirely for projects near high- frequency transit with 50 or fewer units.
The result was multifamily projects that proposed fewer parking spaces. Less parking meant lower construction costs; surface spaces cost about $5,000 to build and garage spaces at least $25,000 each. The reduced costs allowed rents to fall below the previous market rates. One UCLA study suggested that parking contributes 17 percent to a unit’s rent or about $142 per month.
Reduced parking requirements also helped a 35-unit affordable housing project for seniors in Portland, OR, move forward. Changes in the city’s zoning code meant that the project needed only two instead of five spaces. This change allowed the project to be built with four stories instead of five, making it financially possible to construct.
These changes to parking requirements recognize that cities have more than enough parking already, people’s transportation preferences are shifting, and future parking needs will likely be much less than today’s.
The reduced future demand for parking takes into account that Millennials are driving less than previous generations as new transit lines are built and transportation alternatives like Uber, Lyft, and Zipcar proliferate. Autonomous vehicles could also significantly change personal transportation, resulting in less need for parking, particularly in urban centers.
These changes have led some projects to build a parking garage that can be convertible into other uses if demand for parking declines.  In Houston, the Fairview District, a mixed-use project, includes a five story parking garage designed to be converted into housing or offices in the future. Especially in downtown areas, land currently utilized for parking may suddenly be ripe for more valuable uses in other cities as well.
Parking expert Donald Shoup, a UCLA professor, has called for three steps to reform cities’ outdated parking regulations in his recent book, Parking in the City:

  1. Eliminating off-street parking requirements;
  2. Charging the right price for on-street parking; and
  3. Putting revenues toward parking benefit districts.

The above projects represent a step in the right direction toward Shoup’s recommendations. For on-street parking Shoup recommends charging “market” pricing, the lowest amount that would leave one or two open spaces on each block. This would prevent drivers from having to search for parking; while it wouldn’t be free, it wouldn’t be scarce either.
As Shoup notes, a scarcity of parking in dense areas is a sign of a great city. Parking reform for public spots could not only assure parking spaces will be available but that money will be available to pay for transportation system improvements or other critical public needs. A parking benefit district organizes this more formally, allowing residents to see the funds collected on their block at work to improve their street and other neighborhood public services.
It is clear that parking demand is changing across the United States. Both cities and developers are recognizing that new projects may require significantly fewer spaces in the future as people eschew car ownership in favor of transit, ridesharing, carsharing, and non-motorized transportation options.
Brian Lutenegger is a Program Associate at Smart Growth America.