Lower Parking Minimums Means Higher Value for Parking Spaces

Right-sizing parking can save money, lead to less congestion and create alternative land uses.

Many cities and municipalities have parking regulations that don’t right-size parking land use. Current parking codes and minimum requirements are an outdated concept that drive up real estate costs and shift the supply curve. Parking minimums cost developers money and take up land that could otherwise be used for public, retail or residential use. That limits the ability of cities to create and maintain vibrant communities.

Traditionally, municipalities have not allowed the cost burdens placed on developers to sway parking policy. However, more cities are learning how regulations that encourage driving are major contributors to traffic congestion. Easing gridlock has become a motivator for policymakers, and it’s an issue that developers can get behind to increase the value of their commercial parking assets.

In the recently released report “An Ecosystem Approach to Reducing Congestion,” Pricewaterhouse-Coopers, LLC (PwC) states that “although its congestion-fighting potential hasn’t always been recognized, parking is important to the smooth functioning of a city’s transportation ecosystem.”

The report predicts that the reduction or elimination of parking minimums will promote development, spur urban renewal and drive more affordable real estate projects that will increase livability in U.S. cities. As the demand for mixed-use properties in walkable locations grows, jurisdictions should seek to adjust parking requirements in proportion.

Market Demand Drives Policy at the Curb

According to the PwC report, 85 percent of commuters drive to work, a trend that has remained steady for nearly 40 years. Americans are not ready to fully embrace rideshare, HOV and new forms of mobility (e.g. scooters, bike shares) as majority modes of transit.

There is a finite supply of real estate, roadways and parking in urban centers. The challenge for policymakers, planners and developers is to envision infrastructure systems that optimize the street for traffic flow. How the curb is used and how parking is priced on streets are crucial analyses. PwC notes that when there isn’t the right type or amount of parking, or its prices aren’t appropriately set on the street, drivers have more incentive to circle, cars clog streets looking for elusive spaces, and delivery trucks, taxis and ridesharing vehicles block the curb.

Mobility hubs lend themselves to future adaptive facility design. This will include designated cashless ticket lanes, enhanced wayfinding navigation and advanced reservations to find parking spaces quickly. They will also feature amenity services and retail. National Parking Association

Off-street parking is an effective tool to get cars off the street, and it must be used to clear active roadways.  Getting cars off the curb and into garages is a win-win for cities and developers. There are two approaches cities can take:

Repurpose or reprice on-street parking. Market prices will encourage parking spaces to turn over more frequently during peak periods. Cities will also increase revenue, which can be reinvested in the transportation system. Additionally, spaces can be repurposed for ride-hail pick-ups or drop-offs, or dedicated bus or bike lanes.

Reduce or eliminate parking minimums. Allow market demand to determine the appropriate supply of parking. This will reduce the cost of development and result in a better balance of parking supply and expected demand for the specific real estate application.

Cities in Action

The good news is that many cities have adopted these practices and amended their policies to better manage congestion. Some have even recognized the need to fully eliminate parking minimums.

In 2017, Hartford, Connecticut, became the first city in the U.S. to eliminate parking minimums citywide, leaving all parking supply decisions in the hands of developers, homeowners or business owners. According to the non-profit planning advocacy group Strong Towns, the transition happened over time — first in the downtown core, then citywide.  After using the downtown as a test pilot and seeing how property owners benefited and development flourished, Hartford’s Planning & Zoning Commission unanimously passed the citywide ordinance a year later.

San Francisco recently made headlines after the Board of Supervisors voted to eliminate parking minimums citywide, making it the first major metropolitan city in the U.S. to do so. Previously, the city participated in a two-year pilot program for a demand-based pricing system that used networked parking meters. San Francisco also worked with Sidewalk Labs (a subsidiary of Alphabet, the parent company of Google) on a curb visualization tool that mapped out all of the city’s parking codes and rules. The pilot program aimed to help mitigate chaos at the curb and clarify enforcement for residents, delivery drivers, tourists and ride-hail operators.

Other cities have started to set parking prices based on demand.

For example, Los Angeles launched Express Park, a program that fuses sensor-based technology with real-time updates to adjust parking rates to meet changing demand. The program aims to make traveling and parking in downtown Los Angeles easier by freeing up more parking. The system’s target is to keep occupancy rates between 70 and 90 percent.

Washington, D.C., has begun modeling demand-based pricing and sensors throughout the city to improve parking availability. Funded by a $1 million grant, the program installed sensors and mobile cameras targeting 1,000 parking meters in the Chinatown and Penn Quarter neighborhoods. The District of Columbia Department of Transportation estimates that circling for parking accounts for 25 to 30 percent of congestion in Washington.

Pittsburgh’s ParkPGH is a smart parking solution that uses real-time data to provide drivers with spot availability. It was developed by the Pittsburgh Cultural Trust, a non-profit arts organization, in 2010. Parking inventory is updated every 30 seconds, and drivers can see available areas on a color-coded map online or on a mobile app.

A unique solution from a pricing standpoint comes from Aspen, Colorado. The city teamed up with the software company Smarking to do a real-time assessment of its seasonal parking demand. The data showed that the city was not optimizing its parking prices at the correct times. After elongating peak-season pricing and implementing variable time-of-day pricing, Aspen decreased peak occupancy by 12.5 percent, increased parking revenue by 26 percent and increased tax revenues by 20 percent.

Technology Supports Parking Policy

To obtain maximum benefits, developers and operators should provide off-street smart parking technologies to complement cities’ new approaches. In order to facilitate easy egress/ingress into parking garages, enhanced wayfinding and availability tools are needed. These can make payments easier, improve navigation and make prices more transparent.

• Monitoring parking stall availability: Using sensors on each stall, parking facilities can determine available stalls, which will allow customers to easily locate available parking and decrease circling in facilities.
• Broadcasting parking availability and prices: Using demand-based pricing, facilities can broadcast parking prices in real time, based on time of day and demand. Broadcasting can be done via large dynamic screens at entrances and in the future via vehicle-to-infrastructure (V2I) technology. (According to the U.S. Department of Transportation, V2I technologies “capture vehicle-generated traffic data, wirelessly providing information such as advisories from the infrastructure to the vehicle that inform the driver of safety, mobility, or environment-related conditions.”) Broadcasting availability and price allows vehicles to get off the street faster by taking the guesswork out of finding the best deal.
• Advanced navigation: Superior wayfinding, whether through signage or smartphone apps, provides alternative routes to parking locations based on price, distance and consumer preferences. Advanced navigation is currently used in many mobile GPS and parking apps such as SpotHero. These apps allow customers to reserve parking stalls ahead of their trip, ensuring a no-hassle experience.
• Frictionless payment technologies: Parking access and revenue control systems (PARCS) have long been the standard gatekeepers for parking facilities, controlling who enters and exits and how they pay.  PARCS are transforming to allow for digital, frictionless garage access and payment processing. Types of frictionless payment technologies include license plate scanning and recognition, automated mobile payments and mobile app integration.

Mobility Hubs and Citizen-Centered Cities of the Future

While cities work to fix parking policy today, it is important to consider the future of parking as it relates to congestion and the creation of livable cities.

An ecosystem planning approach with citizens at the center helps ensure that one mode of transportation isn’t favored. Therefore, a transportation ecosystem is multimodal and supports consumer choice with many options.

The PwC report predicts that parking lots will transform into mobility hubs for many types of parking, from cars to bikes and scooters. They’ll also become holding areas for package delivery and mobile storage units. Additionally, they will also provide car washes, vehicle repair and maintenance, dry cleaning delivery and other amenities in a frictionless payment environment.

Parking will evolve to offer micro-parking in minute increments, short-term parking, and car share/car lease pick-up and drop-off points at buildings in central business districts (CBDs).

With mobility hubs employing a “park once” philosophy, commuters can drive into a city, park one time and use shared mobility services to move around for short trips. Mobility hubs across city blocks or within CBD offices will feature retail, parking, drop-off zones and transfer points to use car share, rideshare or bike share, as well as public transportation.

According to PwC, the concept is being embraced in San Diego, where the regional planning association San Diego Association of Governments (SANDAG) has developed a mobility hub strategy to address increasing population and congestion. SANDAG identified eight areas in the region where mobility hub prototypes will be created. Each will be located in areas with unique demographics and infrastructure and will include custom features to maximize effectiveness.

According to SANDAG, the mobility hub prototypes will provide services such as bike share, car share, neighborhood electric vehicles, bike parking, dynamic parking management strategies, real-time traveler information, real-time ridesharing and micro-transit services, among others. Development of the sites will begin this year. The goal is to offer a number of services within a five-minute walk, bike ride or drive of the transit center.

Smart Parking for Smart Cities

Parking has the ability to reduce congestion to create livable cities. Right-sizing parking policy is the first step. Fewer parking regulations and requirements at the municipal level mean more opportunity for developers and garage operators. Mobility hubs will transform the way citizens move in and around cities, and smart parking technology provides a new value proposition for operators.

Parking is poised for growth and has a bright future as a valuable commodity for asset owners. In the new era of smart cities, rethinking parking is a smart business decision for developers.

Christine Banning, IOM, CAE is the president of the National Parking Association.