Let’s Minimize Parking Minimums

By Mike Koetting May 23, 2023

Most of the concern about automobiles in America centers on their carbon emissions. Today’s blog, however, focuses on a different aspect of the impact of America’s car culture–how parking spaces can become a bad use of society’s resources. It also reminds us that the fabric of our lives is shaped by an invisible, even if in plain sight, network of rules and laws that we rarely think about but that we could change.

Central Cities

I got started thinking about this issue after reading a blog by the son of a friend on the impact of laws in Chicago creating minimums for the number of parking places required as part of construction. (As a complete aside, I note there is something simultaneously disquieting and reassuring when you start seeing cogent articles from people you knew as a baby.) He argued that mandating parking space minimums imposes a meaningful drag on the real estate markets because, in many circumstances, it is leading to more spaces than necessary. Excess spaces drive up construction costs which increase rents in order to cover the excess spaces. Research in Chicago shows that in the central city, about one-third of all parking spaces in large residential buildings are empty at 4 AM, the expected point of maximum use. This is consistent with the excess rate found in several other cities. These excess spaces are estimated to add 17% to the rental costs in these buildings.

My concerns are less about the additional rental costs to those who can pay them, and more about the impact on people who can’t pay them, namely, those who would live in affordable housing—were it available. If developers aren’t going to be able to recover the cost of the required parking it becomes another disincentive and affordable projects never get built, or have fewer units than would otherwise be the case. I am sure there are other reasons not to build affordable housing, but should we be making it harder?

A number of case-studies around the Portland area show the impact of parking minimum on several affordable housing projects. For instance, one non-profit proposed a project with only .8 parking spaces per unit, based on data that car ownership was significantly lower among people meeting their income requirements than the general population. Eventually the planning commission required 1.1 spaces per unit. Although that was less than the 1.5 spaces per unit which would have been required without the variance, the added costs forced removal of 30 units from the project that would have been built as originally proposed. Subsequent counts show that a couple dozen parking spaces are empty each night., consistent with the original estimate. There is now a proposal in Oregon to allow affordable housing projects to size their own parking provisions.

After Minneapolis relaxed its mandatory parking minimums, the number of parking spaces built began to drop. Rents of studio apartments in new construction dropped from roughly $1,200 per month to just under $1,000. It was also the case that in the relaxation of parking minimums made it easier for smaller scale development projects outside the downtown area—where it doesn’t make sense to build a large residential tower with a parking ramp but land is also not cheap enough for surface lots.

One might wonder about the impact of the new construction on the parking options for residents of the existing community. So far, at least in Minneapolis, there has been no outcry. However, in Minneapolis some of potential problems may have been avoided by making this part of a larger plan that included additional public transit funding and other disincentives to driving.

Chicago has started experimenting with lowering requirements in specific Transit Oriented Districts (TODs), which are areas close to existing mass transit options. These have been very well received. In Seattle, elimination of parking requirements in designated transit oriented neighborhoods in 2012 led to 40 percent fewer spaces in new projects, saving roughly a half a billion dollars in construction costs without causing obvious problems. Reduced demand for residential central residential parking is consistent with two larger trends—the increasing concentration of young people in central cities and the reduced use of automobiles by the younger generations.

Beyond the Central City

All this raises the broader question of how should policy address parking more broadly and its impact on urban planning. Unlike required parking minimums in the central city, where the general direction policy should take seems clear, it is much less clear how to approach the rest of the metro area. The Parking Reform Network, a national organization to reduce the amount of parking spaces, has recommended eliminating all minimums. About 35 cities have done this—from large to smaller cities— mostly very recently. These changes have received mostly favorable reviews, although in Portland some minimums were restored, albeit at lower levels.

My immediate instinct is that removing all minimums, or at least lowering them, is a good idea as it removes one more barrier to varied housing approaches. But I don’t know enough about the actual dynamics of residential parking to know how to fully score it. In areas where residents now have free on-street parking, it’s likely any new construction will have fewer spaces and that would lead to more people seeking on-street parking. In most places, that might not be an immediate problem. And any adverse consequences might take a while to show up in established neighborhoods.

But if parking does tighten up, people will get upset—perhaps even at the possibility that parking might tighten up in the future. Americans are a long way from giving up their dependency on autos and the entitling assumptions that now come with it. There isn’t an obvious way to address a tightening of parking in an established residential neighborhood. There would be questions, both technical and conceptual, as to how spaces should be allocated.  For instance, how would priority for residents of newer construction built without parking compare to residents who have off-street parking but are using it for other purposes? Would second or third cars be accorded the same access as first cars? How do guests fit into whatever scheme is used.? And how would any of it be enforced? Based on Chicago’s experience with Residential Parking Permit zones, enforcement is both critical to making it work and hard to accomplish.

Whether there should be any free parking is a more fundamental question. While we have come to expect this is in many areas, both residential and commercial, maybe it’s worth a second thought. In truth, free parking is as imaginary as free lunches. Someone has to pay. In the case of “free” parking, there are many sources of payment (included in rental costs, higher priced goods, taxes to support roads, etc.) but all have the property that people who do not own cars subsidize people who do own them and everyone pays for any excess. Given the extent of car-ownership in this country, the question seems academic. But as we endeavor to reduce dependency on cars in response to environmental concerns, it may become more important. It is also the case that there are lower rates of car ownership among people with lower incomes which has its own distributional impact.

None of this addresses the issue of how to think about parking in the non-urban suburbs. There will be some relatively close in suburbs that have, or can develop, sufficient density and are connected to a functional regional transit system that they can reduce parking spots in much the same way as central cities. But those are a relatively small fraction of the suburbs. Most will continue to be car centric and, as such, will need parking. How much parking and whether we have too much will eventually need to be addressed in the suburbs. It is possible there are some quick wins there as well. But this will require some concerted, long-range planning. Over time, we need strategies to make the suburbs more environmentally sustainable since they are not going away any time soon.

On Balance

In the short term, I am pretty sure we can’t materially reduce dependency on cars by making parking more targeted and, therefore, more expensive for those who use it. But doing so will push in that direction. And reducing the number of parking spaces is probably a good idea in its own right. Every estimate I have seen suggests that, whatever it feels like when you’re looking for a parking space, the country has a material oversupply of parking spaces. These spaces add costs, per above, and create their own environmental damage. Reducing the number of unneeded spaces seems like a sooner-or-later required step as we figure out how to reframe our daily lives to fit more comfortably into a world where we do a better job of recognizing the constraints.