Trimming Parking Rules Could Save Thousands

Columnist Lew Sichelman on the costs of too many spaces.

Lew Sichelman

Lew Sichelman

Multifamily property owners could save a bundle if parking requirements were reduced, according to a new study from the Rutgers Center for Real Estate.

Exactly how much depends on the product type and its location. But the center’s new white paper found that renters in New Jersey, where the survey was focused, own fewer vehicles than are required by law.

More specifically, it found that whereas the rules call for 1.97 spaces per unit on average in garden projects, only 1.41 are necessary. In high-rise buildings, 1.33 spots are mandated but just 1.01 per units on average are needed.

In a hypothetical 145-unit garden property, then, the Center’s study suggests that by law, the project would have 102 spaces more than are needed. At the same time, an imaginary 400-unit high-rise would be over-spaced by 75 spots.

Taking the paper’s analysis one step further, and basing it on a cost of $27,900 to build each parking space (as documented by WGI Engineering) the paper maintains that requiring 100 more spots than necessary would add $2.79 million to total construction costs. And that’s money that could be used elsewhere, it says.

“The type of parking and the quantity of parking spaces have a direct impact on the initial construction costs as well as on the ongoing operating expenses which, in turn, affect the required rents and overall financial viability of a project,” the white paper points out.

“Therefore, any reduction in the mandated parking requirements for residential developments will lower initial construction costs and decrease ongoing operating costs, which effectively allow for the reduction of rents, thereby reducing the end user’s cost of living and providing an opportunity to address larger affordability issues.”

The cost to renters

In the Garden State, the report estimates that renters pay roughly $80 per month per unit extra because of the over-requirement of parking. But all else being equal, by trimming the rules by 0.5 spaces per unit on average, “average rents in New Jersey should be expected to fall by nearly 4 percent.”

The state parking rules are based on per-unit size and building type. In garden properties, studio and one-bedroom units require 1.8 spaces. But the Rutgers study says only 0.98 space per unit are necessary. Two-bedroom units must have 1.45 spaces, where just two are necessary, according to the white paper. And while three-bedroom units call for 2.1 space each, only 1.8 are needed.

On average, 1.41 spaces per unit are necessary but 1.97 are mandated, a difference of 0.56 spaces per unit.

The difference is less in high-rises—1.33 space per unit on average are required but just 1.01 are essential, a difference of 0.32 spaces. Interestingly, though, the study says more spaces for two-bedroom units are needed than are required—1.4 spaces per apartment vs. 1.3.

The paper also points out two other important issues: the environmental impact of unnecessary parking spaces and the growing use of transit and ride-sharing services.  Given all three factors—affordability, sustainability and transportation trends—numerous municipalities throughout the country are rethinking their parking mandates and “proactively” implementing lower parking requirements or eliminating them altogether.

According to press reports, Bend, Ore., and San Jose, Calif., have ended their multifamily parking requirements and New York City recently proposed doing the same.

The paper is based on a two-page, 19-question survey of multifamily rental developers, owners and property managers who, together, controlled 175 developments with nearly 29,000 units. Two other data sets—the Census Bureau’s latest five-year American Community Survey and a more detailed survey of parking management practices—also were taken into account.

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