Our latest “City of the Future” episode explores the concept of a monthly mobility package that bundles together transit, bike-share, car-share, and ride services. Priced correctly, such a package could be significantly cheaper than owning a car when you add up insurance, maintenance, and all the other costs. As long as the package provides similar levels of convenience, people might be willing to give up their car altogether.
That’s great for individual households. But there’s an important second-order benefit for cities at large that we didn’t have a chance to examine. By reducing the need for car-ownership, a mobility package could reduce the need for parking — and by reducing the need for parking, cities can help make housing more affordable.
Long a banner issue for urbanists, the critical connection between reducing parking space and lowering housing costs is starting to gain widespread attention. In late September, Alexandria Ocasio-Cortez released a housing proposal (“A Place to Prosper Act”) that brought this link into the spotlight.
The proposal would withhold funding from areas with policies “blocking equitable growth.” For example, the bill cites policies that prohibit the creation of multi-family housing or that require housing to sit on more than a half-acre of land — clear moves away from denser developments. The provision also says an area blocks equitable housing if it “requires a housing developer to provide off-street parking.”
How parking constrains housing
Since the second half of the 20th century, it’s been common for zoning codes to require developers to create a certain amount of parking along with new residential development. These requirements often call for one new parking space per unit — the assumption being that every tenant owns a car. But such requirements strain housing options in two key ways.
First, these requirements mean that limited urban land is used for parking, rather than for housing. In L.A. County, 14 percent of land is dedicated to parking; in downtown Detroit, surface parking takes up 40 percent of space. The result is way more parking than cities need. Des Moines, Iowa, has nearly 20 spots per home. Even transit-friendly cities like Philadelphia or Seattle have roughly 4 and 5 parking spaces per household, respectively.
Second, the cost of creating a parking space (estimated at $24,000 to $34,000) gets bundled into unit prices and thus passed on to tenants, whether or not they own a car. In a 2012 study, the City of Portland found that parking spaces increased rents up to 63 percent over those in buildings with no parking options. A nationwide analysis from 2017, meanwhile, found that garage parking increased an average unit’s rent by about 17 percent.
So the more parking that cities require, the less total housing can be built, and the less affordable that housing becomes. Michael Andersen of Sightline recently provided a stunning example of this connection in Portland, where the city council is exploring a zoning reform for mid-density areas.
According to Anderson, if off-street parking spaces are required in these areas, landowners will most likely build 10 townhouses that sell for more than $700,000 apiece. But if expensive parking options are not required, it’s actually more profitable for developers to build a multi-family residential building with 28 condos that sell for $280,000 apiece, along with four affordable housing units sold at below-market rates. Anderson concludes:
This is worth repeating: As long as parking isn’t necessary, the most profitable homes a developer can build on a lot like this in inner Portland would already be within the reach of most Portland households on day one.
Four policy paths forward
At the end of the day, ensuring a beneficial link between parking availability, improved mobility, and housing affordability will require strong policy changes. There are four clear steps (among others) cities can take to reach a more inclusive direction.
1. Eliminate parking minimums. The first step is to reform zoning codes and, wherever possible, abolish parking requirements for new developments. That doesn’t mean developers can’t create parking; it just means they don’t have to do so to move a project forward. Indeed, recognizing the impact of parking policy on housing costs, an increasing number of cities have already started to do away with parking requirements.
2. Improve driving alternatives. A second step is to create the fundamental infrastructure that reduces the need to own a car in the first place: transit backbones, bike networks, and walkable neighborhoods.
Without these options in place, some planners, communities, developers, or lenders remain unconvinced that people will be able to get around without owning a car — often for good reason. In response to this concern, some places (like Chicago) only relax parking requirements near bus or train lines, while other cities only do so when buildings provide car-share services on-site. (Forward-looking Chandler, Arizona, is even relaxing parking requirements in anticipation of self-driving taxis.)
That’s where a truly convenient mobility package could really help change both behavior and perception — because in cases where a reliable set of options is available, it’s not unusual for urban households to go without a car. In 2018, for example, the San Francisco-based architect David Baker reported having no trouble selling units in a no-parking building at 388 Fulton, and actually had trouble renting parking spaces themselves at another building with good driving alternatives.
Such a package could also support areas that are pushing to become less car reliant. For instance, the car-oriented Parkmerced community, outside San Francisco, is making a long-term redevelopment into a higher-density, mixed-use community. In anticipation, it instituted a Car-Free Living Program in 2016 — a first-of-its-kind incentive that gives car-free residents a $100 monthly credit that can be used on public transit, car-sharing, or ride-hailing services.
3. Push open standards. A third step forward is to push for open standards around mobility data and payment systems. A mobility package or service can only approximate the convenience of owning a car by integrating a range of trip options, which becomes difficult if not impossible to do in a closed system. With this option, city-goers are more likely to forego car ownership — and the need for private parking spaces.
4. Set strong affordability targets. And a fourth step is to establish ambitious affordable housing targets — especially on publicly owned lands or around transit stations, where government tends to have more leverage over development requirements. The value of land would presumably rise in a world where developers could use their capital on creating housing instead of parking; without strong targets, that extra value might not be directed toward affordability.
There’s no easy path to relieving the housing crisis in big cities, but all roads go through a more thoughtful approach to parking.