Reduced Parking Requirements

Introduction

Typical parking requirements subsidize driving, increasing drive-alone mode shares and acting as a barrier to Smart Growth. Rigid parking requirements—especially those that are high—can prevent development or incentivize development in low-density areas where land costs are cheaper. Standard uniform parking requirements disproportionately dampen urban development because of higher land values in urban areas compared with suburban locations. In residential areas, the cost of building parking is passed on to the resident, increasing housing costs for all users, regardless of car ownership. Altogether, this research can help inform how parking requirements affect the cost and location of development in the Bay Area.

This information can help local governments and regional governments in developing appropriate land use and transportation policies. Local governments can benefit from this information to better understand the local land use implications of their parking policies. The regional agencies are interested in this information to help develop effective policies that provide residents with more choices in how they live and access their needs, and that support implementation of the development patterns envisioned in the regional plan, Plan Bay Area. Plan Bay Area emphasizes additional development in the larger cities and along transit corridors, particularly in priority development areas (PDAs) in part to address housing and greenhouse goals. In the long run this information and subsequent policy changes are expected to benefit residents who desire housing with less parking, through reduced costs for housing.

Demand for Lower Residential Supply & Unbundling

Introduction

Building excess parking for residential uses increases the total cost of a development, which is then passed on to the resident. If the resident doesn’t need/use all of the parking, this construction is wasted, when the cost of the housing could have been lower and/or funds/materials could have been applied to other amenities with more demand. In areas with alternative options for traveling—including public transit, walking, biking and carsharing—an increasing number of households are opting out of vehicle ownership and/or deciding to reduce the number of vehicles they own and increase the use of active modes, sharing and carpooling. However, excess free parking dis-incentivizes these decisions, and increases the cost of housing.

Because unbundled parking creates a separation between housing costs and the cost of parking, it allows residents to choose the number of parking spaces they wish to use and pay accordingly. Additionally, if residents decide to forego car ownership, or reduce their personal vehicle ownership, they can also save money by giving up their parking space. This incentivizes households to live car-free, or give up their first or second vehicle.

The regional agencies (MTC, ABAG) have goals for adequate levels of housing for low income households. In addition, they have goals to reduce the production of greenhouse gasses. To the extent that there is demand for lower cost housing with less parking, both goals can be addressed. MTC has some resources to put toward the development of low cost housing, such as through the Bay Area Transit-Oriented Affordable Housing Fund (TOAH), but these resources are very limited and would best be focused where there is high demand. If there is more demand for housing with lower amounts of parking, new developments by the private sector could reduce rental and home purchase costs – if the local jurisdictions will allow it.

Best Practice Research

A number of studies have looked at the effect of changes in reduced parking requirements, often in relationship to development potential and costs. In addition to academic studies, application examples of reduced parking requirements directly include the Los Angeles Adaptive Reuse Ordinance (ARO), Berkeley, CA and Oakland, CA.

Reduced Parking Requirements

In “High Cost of Free Parking”, Donald Shoup (2005) argues that in order to avoid subsidizing the cost of driving with free parking; parking should be viewed as a commodity like any space rental. While research is scarce, this research accumulates data from two separate studies to look at how providing free parking by way of parking requirements can (1) increase the construction costs per dwelling by 18%, (2) decreases housing density by 30%, and (3) decrease land value 32-33%. Altogether, this work discusses how parking requirements make development more expensive and discourage high density development while encouraging sprawl. Additional studies looking at the effect of reduced parking requirements include:

• “Turning Housing into Driving: Parking Requirements and Density in Los Angeles and New York,” (Manville, Beata, and Shoup, 2013) looks at how parking requirements decrease density and increase automobile ownership. In New York City, the researchers found that for every 10% increase in minimum parking requirements, there was a 6% reduction in both population and housing density, and a 5% increase in the number of vehicles per square mile.
• Vinit Mukhija and Donald Shoup, “Quantity versus Quality in Off-Street Parking Requirements,” Journal of the American Planning Association, Vol. 72, No. 3, Summer 2006, pp. 296–308. …discusses how minimum requirements increase demand for automobiles, by providing a parking supply beyond what the market would naturally provide and spreading out land uses making it more difficult to get places with alternative modes. This article looks at several successful examples of cities that have policies that eliminate or add flexibility to minimum parking requirements, including:
  • Portland, Oregon: does not have minimum parking requirements for sites within 500 feet of a transit service with at least 20-minute peak hour service.
  • Carmel, California: limits parking in an effort to maintain and enhance its pedestrian-focus by barring any off-street parking within the central commercial district.

Table 3 provides some examples of additional cities that have reduced or eliminated parking requirements.

Table 3: Examples of cities with reduced or eliminated minimum parking requirements

City	Policy
San Francisco, CA	Eliminated minimum parking requirements; established maximum requirements.
Los Angeles, CA	Project-specific reduced minimum parking requirements.
Palo Alto, CA	Reduced minimum parking requirements for land banking (summarized below).
Sacramento, CA	Eliminated and reduced minimum parking requirements (summarized below).
Berkeley, CA	Eliminated and reduced minimum parking requirements (summarized below).
Portland, OR	Eliminated minimum parking requirements within 500 feet of a transit line with at least 20 minute peaks.
Seattle, WA	Reduced minimum parking requirements for certain types of development such as senior and multi-family housing, and developments with carsharing. Eliminated requirements in downtown.
San Diego, CA	Reduced minimum parking requirements for some developments.
Hartford, CT	Reduced minimum requirements in exchange for taking efforts to reduce demand.
Centennial, CO	Reduced minimum parking requirements for shared parking.
Arlington County, VA	Context-specific reduced minimum parking requirements.
Portland, OR	Established parking maximums based on availability of transit service; eliminated minimum requirements.
Cincinnati, OH	Reduced and eliminated parking minimum requirements in the CBD.
New York, NY	Eliminated minimum parking requirements for affordable units in downtown Manhattan and Brooklyn.
Washington, DC	Eliminated minimum parking requirements in high-density downtown areas and reduced parking requirements in transit-rich areas outside of downtown.
Tacoma, WA	Eliminated minimum parking requirements throughout the downtown core.
Nashville, TN	Eliminated minimum parking requirements within the 600-acre downtown core.

Santa Clara County Parking Utilization Study

A study of 12 TOD residential properties in Santa Clara County (2010) found that there was substantial unused parking at all of the sites, which had been built to the local parking requirements. It concludes that as such, many Santa Clara County municipalities could reduce their residential parking requirements significantly without the risk of “underparking” a TOD residential site. The estimated cost of the 2,496 unused parking spaces counted in the study for these sites represent about $37.4 million in opportunity cost. Such studies can help inform decision-makers as well as the public that areas near transit stations are often over-parked. This parking can be reduced and converted to other kinds of development projects, further supporting transit ridership.

Parking Requirements and Housing Affordability

Inclusion of parking in to housing costs raises the cost of housing. There have been a number of analyses of the impact of the inclusion of parking on housing costs.

In a report by Jia and Wachs (1998), an economic analysis investigated the impact on housing affordability of code required parking in six neighborhoods in San Francisco. Using hedonic pricing it estimated that parking increased prices by about 10%. Based on the findings it recommends a rethinking of these parking code requirements so that housing is more affordable, particularly for lower income households.

Policy Application: Reduced Parking Requirements in Los Angeles

The Adaptive Reuse Ordinance (ARO), passed in the City of Los Angeles in 1999, was created to encourage the conversion and reuse of vacant commercial buildings as residential apartments in downtown Los Angeles. In order to encourage residential reuse of older, often abandoned, office buildings, the City both reduced the parking requirements and allowed off-site facilities to satisfy these lower requirements. A study of the ARO buildings by Shoup and Manville (2007) found that these developers made more efficient use of fewer spots by unbundling the parking, and reducing the overall demand for spaces by tenants.

“Parking Requirements and Housing Affordability” (Jia and Wachs, 1999) looks at reduced parking requirements in downtown L.A. This study finds that with reduced requirements, developers provide more housing overall as well as a variety of housing for different types of household sizes and incomes. It also finds that developers will provide housing specifically marketed towards non-drivers.

Policy Application: Zoning Code Reform in Sacramento, CA

In 2012, The City of Sacramento revised their Zoning Code to bring more flexibility for parking requirements in urban areas. The City has removed all requirements in the Central Business District, has removed all requirements for projects smaller than 6,400 square feet in the Central City, and for all other areas requirements are based on the neighborhood context, access to alternative transportation modes, and existing parking supplies in the area.

Policy Application: Reducing Parking Requirements in Berkeley, CA

Berkeley, California has written into their Zoning Ordinances that parking requirements can be reduced if a new development falls under certain criteria. While the exact wording of the code can be found in Berkeley’s Zoning Ordinance Section 23B.28.050, the code stipulates that the land use falls under one of the following summarized criteria:

1. The development is within 1/3 mile from a BART station, Berkeley’s Amtrak stations, or a bus rapid transit stop;
2. The development is within ½ mile from an underutilized public parking lot;
3. A parking survey shows that there is ample parking during the new development’s peak parking demand;
4. The new development is a Retail Product Store, Food Service Establishment, and/or Personal/Household Service; or
5. The reduced requirements are deemed to improve the area or there are other factors where demand will be reduced.

Policy Application: Elimination of Minimums and Creation of Maximum Requirements in San Francisco

In 2006, San Francisco eliminated parking requirements for housing in downtown commercial (C-3) zoning districts and has instead replaced these with maximum parking requirements of 1 parking space for every 4 housing units. These policies have been implemented along with car-sharing, secure bicycle parking and unbundling policies (further detailed in Policy Question #4). Successful application of these policies resulted in extending these policies—including maximum requirements and unbundled parking—to several new neighborhoods.

Flexible Parking Requirements & Carsharing

“Car-sharing: Where and How it Succeeds,” (Millard-Ball, 2005) explores how carsharing can be used as a policy tool to reduce minimum parking requirements. It gives several examples in North America of where and how this tool has been used, including:

• Rather than an in-lieu fee, Aspen Colorado allowed the developers of residential units in the new Visitor’s Center to contribute funds to carsharing.
• The City of Seattle has modified its Land Use Code to allow required residential spaces to be dedicated for car-sharing use.
• Austin, Texas has modified its code to allow parking reductions for multi-family developments that participate in car-sharing within the University Neighborhood Overlay district.
• The City of Vancouver in Canada allows a single car-sharing space to substitute for up to three required parking spaces within multi-family buildings of 30 units or more.

Additionally, some developments have started offering a portion of their units without parking and at a lower cost. “Moda,” a condo development in downtown Seattle, offered lower-priced units for 83 of the 251 units that do not provide parking. The demand was so high for units without parking that they sold out in less than a week. Similarly, The Civic in Portland, OR offered 25 lower-cost units without parking.

Regional Policy Application: King County’s Right Size Parking Calculator

The Right Size Parking Calculator is a tool to help determine how much residential parking is required for new developments, with demand factors that are specific to the King County region. The motivation behind the Right Size Parking Project was the understanding that parking is often oversupplied due to minimum parking requirements and the methods of estimating parking needs that are based on suburban vehicle ownership rates do not apply well to the area. The project found that residences in the area built an average of 1.4 spaces per dwelling unit, despite only needing approximately 1 space per dwelling unit. This is a large and wasteful cost to developers; it also represents a barrier towards Smart Growth and TOD principles. Therefore, the calculator is a tool to help inform context-specific parking demand, rather than relying on demand information that may not be relevant to the King County area.

The Right Size Calculator works to estimate the number of parking spaces per residential unit (parking/unit ratio) for specific new developments and location characteristics. Therefore, the “right size” number of parking spaces per unit depends on the characteristics of the location and specifics of the development—such as the price of the development, location of jobs, transit access. The model also outputs estimated “parking impacts,” providing average construction costs, vehicle miles traveled, and greenhouse gas emissions that the amount of parking will provide. Last, the model outputs estimates for trip generation reduction based on commute distance and journey to work mode split, data gathered from the U.S. Census.

The Calculator was created by first collecting parking-use data from hundreds of multi-family residential developments. A regression analysis was used to build the model based on characteristics of each residential building (such as average rent, units per square feet, and occupancy) as well as environmental characteristics (such as measure of transit service and population/job density). These variables were used to predict the demand for parking based on the dependent data: “observed vehicles per occupied residential unit.”

Parking Demand and Demographics

A review of California parking requirements in TOD areas found that residential areas typically require 1-2 parking spaces per dwelling unit.[1] However, parking usage in these areas is typically much lower. Literature that specifically looks at parking demand within particular market segments and locations include:

• A 2010 publication by MTC, “Choosing Where We Live,” evaluated the preferences of over 900 households seeking new homes in the Bay Area, using market research techniques to estimate demand for various types of housing. This effort found that approximately one third of the households were quite interested in living in transit oriented development; this group had low auto ownership and high interest in other neighborhood attributes, such as transit, affordable housing, and places to walk. Another third of the households might be interested in transit oriented development if it had the right amenities for them. The report describes the actions that local governments can partake to make their communities more attractive to these market segments. The market demand outstrips the supply for this type of housing/neighborhood, as seen when comparing these preferences to new development patterns and further evidenced by the high prices for living in walkable neighborhoods in San Francisco, as well as in smaller and other lively urban centers. This highlights the potential to revitalize urban areas, reduce greenhouse gasses and reduce traffic congestion by allowing for the construction of this type of housing.
• Research has pointed to recent trends in automobile usage for Millenials that could make significant impacts to parking demand in the near future. The percentage of young people with driver’s licenses has been decreasing in recent years. [2] In 2011, the percentage of 16-to-24 year olds was lowest than it had been since 1963 (at 67%). Vehicle-miles traveled per capita have decreased for Americans as a whole since 2004; “Millenials” or “Generation Y” (age 16-34) are driving significantly less, due to shorter overall trips as well as fewer auto trips per person (National Household Travel Survey, 2011). At the same time, alternative transportation use for 16-to-24 year olds has increased. Looking at trends from 2001 to 2009, research by the Frontier Group (2012), finds that biking for this age group increased 24%, walking increased 16%, and public transit increased by 40%.
• “Parking Demand and Zoning Requirements for Suburban Multifamily Housing” (Willson and Roberts, 2010) compares three methods of assessing parking demand in suburban residential areas—(1) field counts, (2) household surveys, and (3) vehicle availability from the U.S. Census American Community Survey (ACS). The study finds that ACS method was similar to the other two and that minimum parking requirements significantly exceed all three measures of demand. This research supports using a simple method to more accurately assess parking demand needs to set requirements at local levels.

Unbundled Parking

Unbundled parking separates housing and parking costs. Traditionally, the cost of an apartment or condo unit includes a one or more parking spaces, regardless of whether the tenant/owner is using them or not. Unbundling allows residents to choose the number of parking spaces they use and pay for accordingly. Additionally, if residents decide to forego, give up or reduce their personal vehicle ownership, they can also save money by giving up their parking space. This allows them to conserve or prioritize their household budget for other purposes. In recent studies surveying a range of areas, Littman (2006) found that unbundling parking produces impacts similar to parking pricing, reducing automobile ownership by 5-15%. Several options for unbundling parking include:

• Parking spaces are not included in the base rent/purchase cost, and are rented by the tenant/owner separately.
• Landlords/condo associations can provide a discount to renters/owners who do not want to use the standard number of parking spaces.
• Landlords /condo associations can create a secondary market for parking by renting unused spaces out as a separate commodity.
• Unbundling can be used as a municipal code tool that allows developers to reduce the amount of parking they are required to provide.

Policy Application: Foregoing Residential Parking Permits

Facing extreme crowding of city streets with cars from local residents, and a robust transit system heavily used to commute to jobs in New York City, the City of Hoboken, New Jersey developed a program to encourage residents to forego their residential parking permits. Residents giving up their residential permits are provided a combination of discounted carshare usage, bicycle amenity discounts and a local bicycle map, temporary parking placards, discounted gym membership, and a discount on athletic apparel. Key to the program success has been the Corner Car program, which provides free carshare membership and is available within a 5 minute walk to more than 90 percent of city residents. Participation is on an annual basis, allowing for changes as needs change.[3]

Policy Application: Carsharing & Unbundled Parking in San Francisco

A 2010 Value Pricing Pilot (VPP) project in San Francisco looked unbundling parking in residential buildings combined with the policy of including carsharing spaces within the residential parking facilities.[4] The analysis found that this combined policies significantly reduced household vehicle ownership rates; apartments with the presence of carsharing and unbundled parking had an average vehicle ownership rate of 0.76 vehicles/unit compared to apartments without carsharing and unbundled parking that had an average vehicle ownership rate of 1.04 vehicles/unit. 22% of the residents surveyed responded that the presence of carsharing impacted their residential location choice. San Francisco’s Planning Code relating to unbundled parking can be found in Section 167: “Parking costs separated from housing costs in new residential buildings.”[5]

Policy Application: Unbundling in Multi-family Residential Developments

While San Francisco has taken bold steps with City-wide unbundling policies, several other places have allowed unbundled and parking requirements on a case-by-case basis. For example, approximately 50% of multi-family buildings in central Seattle have unbundled parking from rents.[6] Research has shown many successful examples of unbundling, yet the largest challenge includes clearly communicating the policies to buyers and rents. Some additional examples include:

• Arlington County, VA Transit-Oriented Development (TOD) corridor has taken several steps to manage and reduce parking demand. The Market Common development in the City of Clarendon has taken advantage of both reduced minimums through shared parking as well as unbundling parking costs from rents. The unbundled parking is $25/month for the first vehicle per unit, $75/month for the second, and $100/month for the third. Studies of parking use show that even at peak demand, parking facilities are less than 80% occupied.
• Downtown Bellevue, WA (located in the greater Seattle region) has implemented an unbundled parking policy by requiring multi-family residences to charge parking costs separate from rents in addition to establishing maximum parking requirements. The results of these policies have been a drive-alone commute rate decrease of 30% (some studies report higher rates).[7] In addition to multi-family residences, office buildings in downtown are also required to unbundle parking costs from the costs to lease space. This policy makes it easier for employers to implement cash-out policies and incentivizes shared parking policies.
• The Gaia Building in Downtown Berkeley has unbundled parking, separating rents from a monthly parking price of $150/space. When the apartment first opened, the apartment had 237 residents and 91 units, yet demand exists for only 20 spaces despite 42 available spaces (some spaces used for carsharing).[8]
• Dudley Village in Dorchester, MA: In Massachusetts, the 2006 TOD Bond Program gave $2 million for Dudley Village (a mixed-use affordable housing development) in Dorchester, MA. The development has unbundled parking with only 0.7 parking spaces per unit.[9]
• In a St. Louis TOD condo project, close to a MetroLink transit stop, tenants were given the option to purchase a parking space for $18,000. Because of this option, developers are able to sell the “Ballpark Lofts” at relatively low costs compared to other units in the area for those who opt out of car-ownership. Given this choice, almost a quarter of the condo buyers decided against the purchase of a parking space. [10]

[1] Sacramento Zoning Code Parking Update. 2009

[2] Benjamin David and Tony Dutzik, Frontier Group (2012). Transportation and the New Generation: Why Young People Are Driving Less and What it means for transportation Policy.

[3] http://www.hobokennj.org/departments/transportation-parking/surrenderyourpermit/

[4] Adam Millard-Ball, “Putting on their parking caps”, Planning, April 2002, v68 i4 p16; Nelson/Nygaard (2011). Cumulative Impacts of Carsharing and Unbundled parking on Vehicle Ownership and Model Choice

[5] MTC Smart Growth Technical Assistance: Parking Reform Campaign. http://www.mtc.ca.gov/planning/smart_growth/parking/6-12/Parking_Code_Guidance_June_2012.pdf

[6] http://www.duprescott.com/productsservices/articleinfo.cfm?ArticleId=609

[7] Reducing Congestion and Greenhouse Gas Emissions through Public Parking, summary report of Senate Transportation and Housing hearing at the State Capital, 2/24/2009

[8] GreenTRIP Traffic Reduction Strategies, by TransFORM.

[9] MAPC Smart Growth

[10] From mapc.org: Steve Patterson, “Downtown Still Going Strong; Neighborhoods and Inner Suburbs Need Leadership”, Urban Review STL, November 20, 2006; http://www.urbanreviewstl.com/?p=2849. View PDF of the story by clicking here.