Parking has become a huge issue in cities across the U.S. as density increases. In the Dallas/ Fort Worth region, an area with expected growth of 3.4 million in the next 20 years — raising the total population to 10.6 million — would add 2.3 million more cars to already congested roads.
In terms of real estate development, parking has huge implications. There are many suggested and possible ‘solutions’ to consider for a flexible future parking. Some of these solutions are removing minimum parking requirements, reducing requirements at transit developments, implementing shared parking and using market-driven parking revenue models.
Parking is often one of a development’s first underwriting decisions since it lies at the nexus of multiple competing issues relating to property records, such as site location and size, density thresholds, market rents, tenant requirements, and cost.
Common parking assumptions don’t always produce the expected results. Take these scenarios:
- Municipalities can lower parking requirements to incentivize the market, but the reality is that the market will provide the amount of parking it feels is necessary to lease/sell the development. Developers and property owners may not be willing to take the risk of providing less parking.
- Multimodal transit-oriented development provides the opportunity to reduce parking provisions, but if the developer and lender believe the resulting amount is not enough to service demand, the development will not proceed.
- Shared parking leads to lower costs and an increased return on investment, but if conflicts occur between uses, this can affect market perception and lower the development’s value.
Removing Minimum Parking Requirements
Internationally, some cities have eliminated minimum parking requirements for new developments as well as restricted the maximum number of spaces allowed. Great Britain, Sao Paulo, and at least 19 U.S. cities have eliminated parking requirements. In many cases, existing parking has been cleared to be converted to other uses and policies are being put in place to encourage affordable housing developments near transit centers.
Minimum parking requirements and free parking can create unintended consequences. Free curbside parking can discourage drivers from using parking garages and lots, for example. Berkeley, California, saw negative impacts that included drivers circling in search of free curb parking, cars spilling into neighborhoods, and perceived parking shortages even though lots and garages that charged for parking were largely empty.
The city of Berkeley instituted a market-based approach in which the city charges the lowest price needed to achieve 65 to 85 percent occupancy curbside on each block. Parking revenue is then used to fund public services for the blocks where the revenue is collected, including security, cleaning, help for the homeless, and beautification. Automated license plate recognition is used for enforcement and measuring occupancy. With the changes, drivers surveyed said that parking is easier to find and more drivers are using previously underused garages.
Reducing Parking Minimums at TODs
Reid Ewing, a professor of city and metropolitan planning at the University of Utah, said that very little research has been done on how parking is used at TODs, and the university is seeking to change that. Data needs to be collected that will inform decisions on parking to be used by consultants, city officials, and developers in planning their developments.
Vehicle trips, vehicle ownership, and parking demand all declined with the compactness of neighborhood development in parking uses of 5 TODs: Redmond TOD, Seattle; Rhode Island Row, Washington, D.C.; Fruitvale Village, San Francisco; Wilshire/Vermont, Los Angeles; and Englewood TOD, Denver. The analysis is being updated and expanded to 30 regions, including Dallas.
Shared Parking and Cost Savings
A Mixed-use development in Addison Circle that began in the 1990s was one of the first shared-parking developments in the Dallas area. However, a lender in the second phase shot down the initial shared parking plan despite support from both the city and anchor tenant. The development ultimately shared the footprint of a parking garage, resulting in significant savings, but the lender didn’t allow sharing of individual spaces between tenant types.
A variety of developments around the United States, including TODs, have implemented shared parking to various degrees. Shared parking would work in a lot of different environments, and have the potential to take shape in a few different ways. Some of the best TODs and they still have reserved parking for residential tenants. That is something residential tenants typically expect.
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