Cities Release The Handbrake On Parking Mandates To Accelerate Housing Growth

A nationwide housing and affordability crisis is as good a time as any to rethink well-settled ordinances, and cities across the country are looking into some of their most firmly entrenched policies: the American tradition of parking spots included with housing.

Advocates say elimination and reduction of minimum parking requirements remove a potential hurdle to building housing, at least in transit-rich areas. Those advocates have notched a string of recent wins. 

Since October, Cambridge, Massachusetts; Culver City, California; Lexington, Kentucky; and Anchorage, Alaska, have been just some of the cities to eliminate parking minimums. They join Minneapolis, San Francisco and Portland, Oregon, which eliminated minimums years ago and offer a glimpse into how the parking change can affect housing development.

But there are decades of policies mandating the ratio of parking spaces per newly developed housing unit still to be addressed in much of the U.S., and many residents have deeply ingrained expectations for off-street parking.

“We've been doing the same type of auto-centric policy for the last 70 to 80 years,” Urban Land Institute Senior Director Paul Angelone told Bisnow. “Following World War II, the way that we've done a lot of our urban development patterns, we've been doing since then. So this is almost a century of inertia, of status quo that we are living in, that we need to rethink.”

In locales that have abolished parking minimums this year, developers face uncertainty in the largely untested housing-without-parking market. And like so much else in real estate, preferences may be cyclical.

“Parking is something we wring our hands about all the time,” San Francisco-based Bridge Housing Executive Vice President Brad Wiblin said. 

“We were leaning toward, as a company and an industry, building less and less parking over the last few decades,” he said. “And then when Covid hit, we all had to rethink that, because people weren't riding transit. … It's interesting how our position took many years to get to building little or no parking, and then has been kind of somewhat modified by the pandemic.”

The development calculus isn’t settled just yet, and some cities have taken steps between outright elimination and the status quo. At the end of last year, Boston eliminated parking minimums for housing developments with at least 60% of their units restricted to those making no more than 100% of the area median income. 

“The parking requirements create a burden for the production of affordable homes in Boston,” said Jesse Kanson-Benanav, executive director of Abundant Housing Massachusetts.

Before Boston’s change, affordable housing developers who didn't expect to need much parking at their buildings were required to seek a zoning variance.

“But the variance process adds time and cost onto developments, and parking requirements themselves take away land on sites that could be used for housing people to instead house cars,” Kanson-Benanav said, adding that the variance process let owners of neighboring properties challenge variances in court. “So it's a burden and an additional cost in the already-costly process of producing affordable housing in Boston.”

Janey Construction Director of Preconstruction Eurick Dorsett said the biggest potential change for the Boston-based contractor is offering time savings to developers who choose to significantly reduce or altogether eliminate parking.

“We may be in a position as the contractor to say, ‘You may be able to reduce a certain fraction, percentage of time off your construction schedule by not having to do that part of the work,’” he said. 

Advocates for the removal of minimum parking requirements, which don’t exclusively apply to residential developments, say the requirements still in place eat away at the space that could be used for housing people and businesses instead of cars.

“These mandates are an impediment to allowing people who build things or start businesses from maximizing their ability to provide housing or provide a business to a community,” said Tony Jordan, president of the nonprofit Parking Reform Network.

Local governments aren’t the only ones getting rid of parking requirements. California in September banned parking minimums for new developments within a half-mile of public transportation. The Oregon Department of Land Conservation and Development in July passed an administrative action to invalidate minimum parking rules in the state’s eight largest metro areas in certain situations.

Goverments haven’t been alone in influencing parking ratios. Banks have traditionally wanted to see at least one parking spot per unit in the plans before lending on a development. 

“It all goes back to the viability of the project, and not having parking could be perceived as a negative,” Kelli Carhart, CBRE senior managing director of debt and structured finance, said of the traditional lending practice. “It depends on the location, but if you're underparked, you might not have a tenant that wants to live at that asset and compare it to a property that does.”

Some advocates see the opposite end of the spectrum from minimum parking requirements as a tool that will offer developers planning and capital flexibility. Parking maximums, like the ones put in place in Nashville’s densest areas this fall, could help remove the lending barrier.

“I have had developers say, ‘What we really need are parking maximums so that we can go back to the bank and say the city's not allowing us to build this parking here,’” Jordan said. 

The Minneapolis City Council in 2021 amended its parking, loading and travel demand management zoning regulations, lowering parking maximums across the city.

“Our maximums for residential use are generally flexible enough that they haven't proven problematic for developers,” Minneapolis Manager of Code Development Jason Wittenberg said. “They're really intended to prevent the worst cases of kind of oversupply.”

Wittenberg said developers in the city have taken advantage of the flexibility. Between the parking requirement elimination in 2021 and April 2022, there were 19 major residential projects in Minneapolis that provided 2,419 units along with 1,339 parking spaces, a ratio of 0.55 spaces per unit, according to data Wittenberg shared with Bisnow. By contrast, the 2020 approved development ratio — tied for the lowest of the preceding decade — was 0.76 parking spaces per housing unit.

The market will still demand significant parking, especially in the costliest developments, Wittenberg said. Market-rate developers in some cities look at parking as the No. 1 amenity, Wiblin said. 

But as attitudes shift, policies change, and the housing and affordability crises potentially worsen, a new consideration could top the list. 

“The cost to build parking is the No. 1 driver that is going to force us to build less and continue to force us to build less,” Wiblin said. “In fact, nobody can justify the hard cost of building. So if you're trying to shave some money off your budget, parking is one of the kind of low-hanging places to save money.”