Parking and the Tyranny of the Present

Preamble: Since you may not get to the end of this post, I’m putting a link to an essay by Donald Shoup here at the top.  He is the godfather of parking study/analysis/theory.  If this essay isn’t enough to satiate your lust for knowledge, pick up his book The High Cost of Free Parking.  It’s now way cheaper than it used to be.  Or just youtube him. Whatevs.

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In a brief twitter exchange the other day, Michael Davis of Dallas Progress mentioned an office building in Minneapolis that either is or will soon be parked at something like 0.5 spaces per 1,000 square feet.  It should be known that Mpls has a city councilwoman who was a city planner and as we say in the biz, “gets it.” There are many that don’t.

She led the effort to remove maximum parking standards from the CBD, which allows for – but, important point, does not necessarily motivate – development without parking.  There must be other factors and considerations for the market to deliver less parking, which is the point of this post.

If you are in real estate, particularly in Dallas (and not in say San Fran, NYC, YVR, etc) a parking ratio well below market can come as a shock as office is typically parked at somewhere between 4 and 6 spaces per 1,000.  Sometimes the city requires it, which is stupid – because the market needs flexibility, but more importantly lenders won’t give you that cash money lest you.  Brokers, they don’t even know what to do with you.

That range alone should give two hints: 1) the very presence of a range suggests an internal tension against rigid regulation and 2) that the range is so narrow for all office users suggests an outcome that is over-prescribed (over-regulated).  YOU WILL provide 5 spaces of parking per 1,000 square feet no matter whether you need it or not.

As Peter Simek wrote, a colleague named Chris McCahill whom I’ve had the pleasure to meet during the past two CNU conferences, recently published a study suggesting that parking and driving is not so much chicken/egg as much as the provision of parking induces more driving.  The operating dynamics are two-fold.  One, the provision of parking and the subsequent under-pricing of it is essentially a free good.  And like all free goods, they get over-used. People drive more.  Over the long-term, the other force is that more parking means less space for people.  Uses spread out.  Then there is no recourse BUT to drive.  Thus, we need parking.

On a broad enough scale, everything is mixed us

Parking is but one form of access.

The history of minimum parking requirements comes from the initial invasion of cars into cities that weren’t prepared to receive them.  Every one parked on the street because that was the only space available.  On-street parking replaced where people used to tether their horses. Then, they left their cars there as long as they could, and caused severe congestion from circling looking for on-street parking (where once horses were…uh, leashed?).

I provide a much more in-depth historical and theoretical background in the Parking Paper I wrote some years ago about how parking is a subset of place and place is based on context.  Thus, code should be calibrated to not just context as it is but as we wish it to be.  Rather than uniformity (whether that is imposed by hard regulation or soft regulation of lenders/brokers).

Early parking garages
An early parking garage which presumably, like the lot next to it replaced productive land use

So cities reacted, mandating any new development must provide x amount of spaces per whatever square footage of whatever land use was proposed to be built.  That it was so specific to land use (yet an arbitrarily concocted number) meant buildings could no longer accommodate flexible uses.  Any newly proposed building or land use would essentially have to tear down the buildings around it in order to provide the requisite parking.  Not only is that immediately deleterious, but it has long-term corrosive effects on adjacent properties and land uses.  Other businesses begin to fail, or leave because the place becomes undesirable.

Furthermore, since we by and large are a lazy species these arbitrary codes were cut and pasted from city to city.  The repercussion is that just about every building since is throw away, an (un-)intentionally temporary construct able to only last as long as the specific ephemeral use of that one very specific period of time.  Thus, the potential for timeless cities is lost (as is affordability, since it is cheaper to inherit, rehabilitate, and inhabit than it is to tear down and build new).

In vibrant, successful places there are many ways to access a business.  One might live close enough to walk.  Or, you might also office nearby and be able to walk to a client or a restaurant.  Hence, as what made Paul Krugman famous, businesses tend to cluster into synergistic ecologies.  You might take transit or bicycle or drive.

However, the provision and availability of each of these forms of access has variable costs.  Point being, we need to weight the costs and benefits of each on order to make smarter policy decisions towards a more mutually beneficent, successful future.  Rail costs a lot and is only sustainable with significant density for both ridership and the tax base to pay for it.  However, it generally doesn’t have externalized costs.  Parking is the only form of access with severe negative externalities.

Thus, if access can be accomplished in other ways, parking provides nothing. Absolutely nothing positive on its own.  If it’s the only form of access, it’s like a loss leader, in that way.  So we think it is necessary.  The key is to systematically ensure access by other means while reducing the necessity of parking.

Parking Raises Costs

As places mature, their uses mix, the land uses intensify, and the population densifies, cars aren’t the necessity that they are/were in suburban coded and designed places.  Trips get shorter.  Amenities are closer.  As we can see with traffic counts in uptown Dallas where population quadrupled but traffic counts remain relatively flat.

Choice is built into the system.  I can ask myself, do I need this car, its car payment, insurance, and to fill it with gas on the reg?  Choice should be the goal. Choice allows the ultimate market of the city to function more intelligently.  Instead, the goal is simply the provision of parking.  Everything else, such as the purpose and function of cities, is secondary.

The end result in uptown is many parking garages that are under-utilized.  Office garages sit empty at night. Residential garages sit empty during the day.  It’s incredibly inefficient.  All because lenders and regulators need to check a box.  Many garages don’t even fill up during their peak parking period.  Many have top levels that have never ever ever seen a car.  They’re lonely. Won’t you keep them company?

What this means is that we’ve over-parked.  Some people have clearly decided they don’t need to own a car.  Or couples who might live in a two bedroom, with the second bedroom as a study (or increasingly as a nursery) may only have one car for the two of them.  Yet, that unit has two parking spots because the standard is 1 space per bedroom.

Construction of parking can take a significant portion of construction cost (not to mention complicating the architecture of the actual building and its leaseable space.  Just using random numbers, let’s say you want to build a 250-unit residential building to accommodate the increasing demand for urban living.  Despite that term urban living implying not having to own a car, various institutional forces mandate 1 space per bedroom.  If 30% of your units are 2 bedroom, that’s another 75 spaces to provide.  If you’re truly developing ‘urban’ you probably have some ground floor retail that has to park at 5 spaces per 1000 square feet or if it’s a restaurant possibly 10 spaces per 1000 sf.  Your leasing center also needs spaces.

Land costs are too high to do the cheaper surface parking, so you’re building a garage at $25,000/ space.  At 400 spaces, you’re now adding $10 million into the construction costs.  Guess what?  Investors and developers aren’t eating that cost.  It’s getting calculated into the pro forma.  The challenge is making sure the local rents can be achieved in order to accommodate the increased costs of construction.  You’re likely paying a few hundred dollars of your rent to cover parking construction costs.

Many cities allow for reductions in parking if you “de-couple” parking costs from rent costs.  Meaning, as a resident you have the option to pay extra for a parking space.  Data shows this usually leads to a reduction in parking demand by about 25%.  Many places allow for reductions if you are near transit.  These are various ways to cut costs and build less parking, because if you can, you would.  However, it’s still all a guessing game.

Instead, we should shift from a system of arbitrary reductions to a smarter, more adaptable system where as vox populi we’re regulating the negative effects of parking: deflated land values and increased housing costs, by establishing parking maximums and regulating how that parking can affect the public realm and surrounding property values.  Provide as much as you need below this amount, you just have to hide it.

Doing so would allow for increased market flexibility and adaptability.  Developers and property owners could work out shared access agreements with existing parking supply.  Parking operators and owners could maximize their asset by ensuring increased utilization, which they can price as necessary according to demand.

A useful abstract measure of a successful downtown is the cost of a parking space.  Space is simply too valuable to be dedicated to storing metal boxes.

Rank your downtown with this simple equation
Rank your downtown with this simple equation

It would be insane to suggest taking a CBD from one end of this continuum to the other with the snap of your fingers.  However, as every revitalizing place shows, you can systematically work your way up if you know what you’re doing.  Seattle updates their parking census every three years in order to know the supply and demand in every district around their downtown.  High cost is critical to off-setting the negative externalities of parking, which is why Seattle and every other rational place wants to systematically decrease the impact of parking on the value of their city.  If that means less parking, so be it.

However, in Seattle’s case the aggregate amount of parking has increased, but the ratio at which office and residential has parked has decreased.  Total parking only went up because jobs and residential numbers have jumped so high.  Their CBD now has nearly twice the jobs as Dallas’ CBD, three times the residents, and somewhere between 60-70% of the parking, which we would better know if we had a solid accounting of Dallas parking supply.  What we do know is that parking in Dallas is CHEAP.  Meaning, there probably is too much.

 

Chasing the Wrong Businesses, Old Economy

However, if you say there is too much parking downtown, say by pointing to the fact that parking is ubiquitous nights and weekends – the exact time people wish to see more vibrancy (and thus suggest the need is more parking), you’re liable to be branded a heretic.  I suppose we’ve been spoiled by the availability of free and convenient parking at a suburban walmart.  That is, without acknowledging the lousy experience that suburban big box environments provide.

Within the context of Downtown Dallas, many suggest that if we just had more parking (and perhaps a monorail) then downtown could compete with the booming exurban bleeding edge to the north.  This is incorrect for a litany reasons.  First being the given reasons for corporate relocations up there, which are cheap land, a new building, a variety of incentives, vibrant urban(-esque) environments, control of their own building, and schools, of course.  None of these reasons are parking.  And even if parking was a reason, downtown office space can’t compete on suburban terms.

The corporations Dallas is ‘losing’ are too conservative to pioneer downtown no matter how much parking could be provided (A MILLION SPACES PER THOUSAND).  They also want a brand new building which would price them right out of the urban core and right to where they’re currently building.

Instead, the Dallas CBD should forget parking.  Ignore it.  In fact, systematically reduce it in order to provide more people space.  More living space, for the kind of start-up, tech, entrepeneur types that would be willing to move into class B office where they can walk to work for cheaper rent in order to build their start-up.  Downtown office space, the incubating single family garage of start-ups of yore.

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