Friday, May 24, 2024 May 24, 2024
77° F Dallas, TX

Dallas Is Over-Parked

As more evidence surfaces that we're building too many parking spots in North Texas, developers are asking how they can discourage costly and under-utilized garages.
Karla Bernal

At the dozen or so parking lots and garages that can be seen from D CEO’s Arts District office, the number of cars spotted on rooftop levels on a given day can usually be counted on two hands. This observation supports a common complaint among North Texas developers: We’re building far too many parking spots in Dallas-Fort Worth. More data has recently emerged that verifies their claims.

In the last few years, parking policies and research have become more prevalent throughout the U.S. Through some of the better-known studies, we’ve learned there are about 2 billion parking spaces in America, even though there are only about 200 million cars. So, that’s roughly 10 parking spaces per car. A 2018 study by the Research Institute for Housing America took comprehensive inventory of parking spaces in five cities (but, unfortunately, none in Texas). The worst offender in RIH’s study was Jackson, Wyo., where there are 27 parking spaces—accounting for $192,138—per household.

To bring those numbers closer to home, some  North Texas developers have taken it upon themselves to perform their own research. Granite Properties, one of the largest developers in Dallas-Fort Worth, recently completed a portfolio-wide parking study across its 7 million square feet of properties. The study found that during peak hours, an average of 37 percent of Granite’s Dallas-area parking spaces remain empty.

“We frequently get requests for proposals from brokers looking for four or five parking spaces per 1,000 [square feet of office space],” says David Cunningham, Granite’s senior director of development and construction. “It’s a constant thing, and it irritates me. We know we’re not using the parking, so why are tenants still requiring it?”

Blame Game

When it comes to convincing tenant representatives to require fewer parking spaces for their clients, Cunningham says he mostly encounters a “we-don’t-believe-you” attitude from brokers. “So, we’re going to continue to furnish them more and more data, and we’re going to tell them that how we price our office space comes from that data. It will be an evolutionary change, not a revolutionary change.”

To complete its study, Granite counted cars at its 23 buildings across five metros for two weeks between January and May 2018, during what it deemed to be peak times: 10 a.m. to 10:30 a.m. and 2 p.m. to 2:30 p.m. Either manually or through technology, Granite counted the cars in every parking stall in its portfolio. It threw out any weeks with holidays and completed the study before summer vacations to negate any bad data. It also grossed up to 100 percent occupancy in buildings that were not already full.

“The customer believes they must have one parking spot per employee, without regard to people who are traveling, working from home, on vacation, sick, etc.,” Cunningham says.

In its Dallas-area properties, which includes Granite Park in Plano, Granite has an average parking ratio of 3.24 per 1,000. Yet, only 2.05 per 1,000 are being used, according to its findings. Specifically at Granite Park, the obsolescence percentage was more than 45 percent. In its executive summary, the Granite Properties study states, “Granite has typically provided a parking ratio of 3:1,000 to 4:1,000 because of broker and customer demands.”

Although brokers bear the brunt of the blame, they shouldn’t be the only ones. “I’d like to say that real estate brokers are 100 percent responsible for this dilemma, but they’re really not,” says Don Powell, principal-in-charge at architecture firm BOKA Powell, which designed Granite Park. “Right-sizing parking has to be a collaboration between brokers, users, and investors.”

Developers that build properties with the intention of selling them to an institutional investor after the property is stabilized—often called merchant builders—overbuild parking to make a property more attractive to buyers. “Parking ratios are being driven by exit strategies for developers. Developers are making a guess as to [how much] parking they need to provide at the time when they hope to exit the building,” Powell says.

And then there are the users of office space, which have been conditioned to think that every employee needs a parking space. “We try our best to convince our customer to not overbuild parking,” Cunningham says. “But the customer believes they must have one parking spot per employee, without regard to people who are traveling, working from home, on vacation, sick, etc. They assume they need 200 parking spots for 200 people.”

And it’s not just office buildings. For a laugh, search the web for Strong Towns’ Black Friday Parking series, which shows seas of empty retail parking lots on the busiest shopping day of the year.

The reasons for not overbuilding parking are endless. Landlords don’t change rent for parking spaces, so right-sizing parking requirements allows developers to turn what would be parking into other uses, such as retail or office. Above-ground parking garages are an eyesore so common here, they’ve earned their own nickname: the Dallas wrap, christened by the unattractive perimeter of a parking garage that elicits neither a sense of place nor activity. Parking garages perpetuate urban heat islands, which negatively impact the environment.

But perhaps the most compelling reason to right-size parking: cold, hard cash. Parking spaces are incredibly expensive, ranging from about $10,000 per space in a suburban structured parking garage to up to $35,000 per space in an urban underground garage.

Reversing The Trend

An average parking space in this region is 310 square feet. At 4:1,000 ratios, we’re building 1.24 square feet of parking space for every square foot of office space. But Granite and BOKA Powell have a few ideas to reverse the trend of overbuilding parking stalls. Granite is toying with the idea of allowing tenants to name their parking ratio, and then writing lease terms based on that ratio, thereby charging tenants extra to have more parking. “The big idea is that we make the tenants that may actually use those spaces pay for it, instead of all tenants paying for a higher parking count when they may not all be using it,” Cunningham says.

Some mixed-use projects are experimenting with—and finding success in—sharing non-competing parking uses. In essence, an office building that’s full during business hours would share a parking garage with retail or restaurants that see demand mainly on nights and weekends. In order for these types of experiments to see the light of day, cities have to think differently about how parking is regulated. Some cities are instituting parking maximums (like San Paulo, Brazil) instead of minimums, or ditching minimums altogether (Buffalo, New York).

Powell says he’s encouraged by the local city interest he sees growing. “There’s a strong current rising to the surface to have Dallas work on smart code analysis,” he says. “With form-based zoning and other similar approaches, it’s given the city a competitive advantage. Every suburban city from Plano to Richardson to elsewhere—they’re all interested in this.”

More developers are looking at ways to mine parking data in hopes of right-sizing ratios. Organizations like the Urban Land Institute are working to release recommendations for developers and cities. “[Granite has] $100 million worth of investment that’s not being used,” Cunningham says. “If I accomplish one thing in my career, I hope it’s that we quit wasting money on parking spots.”