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End of the Road for Parking Requirements

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End of the Road for Parking Requirements

They serve as a tax on housing. May 24, 2021
Economy, finance, and budgets
Politics and law

A wave of enthusiasm for zoning deregulation is sweeping through America’s bluer precincts, not known until recently for such sentiments. The movement is a consequence of the stranglehold that obsolete zoning rules have placed on new housing where it’s most needed. One such rule—requirements that new housing units be provided with off-street parking, usually one or more spaces per dwelling unit—has deservedly entered reformers’ crosshairs over the last year.

A growing number of places are seeking to eliminate parking requirements. In Minneapolis, the city council has recently voted to eliminate parking requirements, replacing minimums with caps on the maximum amount of parking that can be required. In California, Assembly Bill 1401 would eliminate both residential and commercial parking requirements statewide in areas meeting a defined standard of public transit service. In New York City, Democratic mayoral candidate Andrew Yang’s newly released housing plan proposes elimination of minimum parking requirements. Shaun Donovan, one of Yang’s rivals for the nomination, echoes this priority in his platform.

Cities began requiring off-street parking for new housing in their zoning ordinances after World War II, when car ownership boomed. As many older homes were built without parking, on-street parking became a scarce resource. Local governments did not trust the private sector to provide enough off-street parking. Planners studied actual and forecasted car ownership to develop formulas to predict how much parking a new residential development would need and incorporated such requirements into their zoning laws.

This trend had several flaws. One was that the parking-demand formulas became self-fulfilling prophecies. The more off-street parking provided, the cheaper it became, and the more incentive households had to own cars that could be stored at low or no cost. Second, parking itself had a cost. Open, paved parking was cheap to build, but the land it occupied couldn’t be used for some other purpose—such as more housing, play areas, or landscaping. However, once housing achieved the densities characteristic of apartment buildings in large cities, the parking had to be in a structure, usually located under the housing. Such parking cost tens of thousands of dollars per space. Construction costs could usually not be recovered by monthly fees, except in very affluent areas. Thus, off-street parking requirements became, in effect, a tax on housing.

An additional problem is that the formulas themselves have become obsolete because of changing lifestyles and new technology. Younger adult residents in urban areas often live without a car, using public transit or bicycles for day-to-day transportation and taxis, ride-hail services, and car-sharing services when they need to. Moreover, new housing lasts a long time. In the useful life of a housing unit built today, autonomous vehicles are likely to become feasible and safe, perhaps leading many or most households to give up car ownership entirely.

Therefore, local governments are becoming more comfortable with allowing the private market, and not government fiat, to determine how much parking new housing developments should provide. Yang’s plan cites the experience of the upstate New York city of Buffalo, which eliminated minimum parking requirements in 2017. A recent study found that the change facilitated mixed residential and commercial projects, with less parking built overall than previously required, and with sharing of spaces—the same parking slot can be used by a resident overnight and an office worker during the day when the resident leaves for a job somewhere else. The change also facilitated housing developments near transit lines, where residents were less likely to own cars.

Cities big and small can benefit from the flexibility Buffalo allowed itself. But surprisingly, some of the opposition to California’s AB 1401 comes from planners who believe not that off-street parking needs to be dictated by formula, but that parking is so expensive that the economic benefits of waiving it can serve as an incentive to secure promises of housing affordability from developers.

This reasoning turns the logic of zoning on its head. Rather than existing to prevent a harm, like the overutilization of on-street parking, zoning becomes simply a way for communities to extract concessions until they’re convinced that the developer is making no more than the minimum necessary profit to proceed. As with parking itself, this is another tax on housing—and local planners and city councils are hardly likely to be qualified judges of when their demands are excessive, particularly since the most popular position for local politicians is often to allow no new housing at all.

States and municipalities throughout the country should hop on the bandwagon started by Buffalo and Minneapolis. Leave parking to the market to decide.

Photo: Chalffy/iStock

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