Over 1,400 Municipalities Have Altered Parking Minimums In Affordable Housing Push. Has It Worked?

With more vehicles than licensed drivers, cars have been king in new U.S. developments for decades.

Large — and expensive — parking structures for tenants have become a standard at multifamily properties across the nation, while local municipalities have set minimum requirements to accommodate the 90% of U.S. households owning at least one vehicle. 

But a growing body of research suggests undoing or altering this longstanding practice can translate to cheaper rents. And hundreds of communities, from blue-collar cities to swanky resort towns losing service employees, are beginning to pay attention, doing away with parking minimums in an effort to grow workforce and other affordable housing. 

A Rutgers Center for Real Estate white paper last month is the latest to weigh in on accumulating research suggesting that stringent parking minimums correlate strongly with higher rents.

"Any reduction in mandated parking requirements for residential developments will lower initial construction costs and decrease ongoing operating costs, which will effectively allow for the reduction of rents," the paper says, adding cutting mandatory minimums is an "opportunity to address larger housing affordability issues."

The Rutgers study found that if the body governing New Jersey’s parking requirements reduced the standard by just a half-car per unit, average rents in the state should fall by nearly 4%, all else holding equal. 

The white paper drew from previous studies, including the June 2023 Victoria, British Columbia, Transport Policy Institute finding that having one parking space per unit increases moderate-priced housing costs by around 12%, while two spaces raise lower-priced housing costs by 25%.

“How much parking you need to include in your project is one of your first variables that you think about when you look at a site,” Debra Tantleff, founding principal of Tantum Real Estate and one of the Rutgers study's authors, told Bisnow. “How much parking you need is going to drive the design of your building.”

With the rise of ride-sharing services and transit-oriented development, the conversation about reducing parking minimums is growing, Tantleff said. And more cities and towns are giving it a go. 

More than 1,400 municipalities across the country are rethinking the appropriate amount of parking, eliminating or reducing parking minimums, and even enacting parking maximums, according to Parking Reform Network, which tracks such moves.

San Jose, California, became the largest U.S. city to eliminate parking minimums late last year. It followed Cambridge, Massachusetts; Culver City, California; Minneapolis; San Francisco; and Portland, Oregon, among the cities casting aside parking minimums.

The shifts come as a housing shortage keeps home prices high and the movement spreads.

Other municipalities experimenting with parking to boost affordable housing range from tiny but wealthy resort town Breckenridge, Colorado, to more working-class Houston.

The nonprofit NHP Foundation got dispensation to develop a 149-unit complex in Midtown Houston for chronically homeless people. Typically, these residents won't have cars, and Houston extending minimum parking exemptions into Midtown in 2019 made the project feasible, said Neal Drobenare, NHPF senior vice president of acquisitions. 

On the other side of the spectrum, resort town Breckenridge would typically require two 45-spot, underground floors of parking for the 50-unit project NHPF is developing, each costing $3M, Drobenare said. But because the project will provide workforce housing for needed service workers, developers were able to get a waiver to whittle that down to one floor.

Officials in Breckenridge were easy to sway because the town needs workers to keep local coffee shops, hotels and other services running. It dawned on local officials that workers have to live somewhere, Drobenare said.

“It became easier to get the political support to develop workforce housing at the point where lack of it started affecting the lifestyles of the rich and famous,” Drobenare said. “When Starbucks isn't open because they can't get workers, then millionaires are upset because they want their latte when they want their latte.” 

The parking NHPF did have to include still added 10% to the cost of the $29M development.

“Realistically, that’s still $3M too much,” Drobenare said, adding that Breckenridge is home to extremely wealthy people and vacationers and land comes at a premium.

Yet without the waiver, developers would have had to reduce the number of units by more than 60%. That wouldn’t have been worth NHPF’s engagement in the first place, he said. 

Parking spots are expensive all over. A standalone parking structure costs nearly $28K per spot on average, not including land, per Rob McConnell, a vice president at engineering firm WGI.

Feras Qumseya, chief development officer for Standard Communities, a national multifamily housing investor and developer, said he has seen parking requirements kill or halt multiple affordable housing projects over the years.

In 2010, Qumseya was involved in a project in the Washington, D.C., area where the parking requirement was 1.6 spots per unit, he said. The project was less than 200 feet from a Metro station.

“We tried for a very long time to get a parking waiver because we're right at the Metro station. We failed,” Qumseya said. “We decided to move away from the project and sell the site.” 

In order to build the required parking for this project, costs would have to have been passed on to tenants through rent, he said, making the project completely unfeasible since rent would have been governed by local rules. A different developer eventually delivered an affordable project two years ago, but only after the county, which he declined to identify, wrote a significant check to subsidize the parking construction costs, he said.

Buffalo, New York, eliminated its parking minimums in 2017 and a 2021 study examined how it had worked. After repeal, new major developments had 21% fewer parking spaces than they would have under the old rules, yet the study found it made a number of projects more feasible, including one that replaced a former parking lot with affordable apartments.

Two student housing projects in Buffalo built since the repeal provided 39% to 59% fewer parking spots than previously required standards. But affordable student housing projects on that scale, with more than 200 units each, were previously uncommon in the city, the study says.

In Minneapolis, the cost of new studio apartments, previously averaging $1,200 per month, went down to less than $1K per month in complexes where parking minimums were waived.

“Parking is really expensive, and the obligation to provide parking can break projects that would otherwise succeed,” Henry Grabar, author of Paved Paradise: How Parking Explains the World, said in an interview earlier this year. 

But one size doesn't fit all. It is a misconception that affordable housing in general needs less parking, Qumseya said, adding that suburban projects often require even more parking because residents commute to jobs in the city. 

“The parking is driven by the demographic and the needs,” he said. “We do our own analysis to see whether there is sufficient demand for parking.” 

It is important to consider geography when examining parking requirements, said Doug Ressler, manager of business intelligence for commercial real estate data and research firm Yardi Matrix. In places like Denver and Phoenix, there is high availability of land and less limited parking, he said. Cities with strong urban cores like Washington, D.C., and Baltimore are a “whole different profile,” he said.

Ressler doesn't take exception to the Rutgers study or the idea that parking boosts rents, though he said that the data was gathered on a limited scale and through surveys. 

“I don’t have an opinion on causality or correlation yet,” Ressler said. “Like they point out in the study, you’re dealing with one-bedrooms, two-bedrooms, three-bedrooms, affordable, workforce, non-affordable, discretionary. It all kinds of lumps together. It really begs to be separated … to be able to come up with some sort of conclusion.

“It's not just a one-trick pony, if you will.”

Tantleff said the Rutgers study gathered its data in New Jersey only and was agnostic to apartment class, size, age and location. She, too, said more studies need to be done to determine how much parking impacts affordability.

“Our objective was to get as much information as possible,” she said. “The general feedback has been that it's fantastic that we finally have this volume ... this information document. Parking is not a one-size-fits-all solution. The standard that's in place treats all housing the same, and that’s not necessarily the case.”

Developers likely wouldn’t object to eliminating parking minimums because housing offers a much better return on investments than parking spots, Ressler said. But developers are typically already incentivized to ensure their projects have as much or as little parking as needed to be functional.

“At the end of the day, they have to operate a viable investment and a vibrant community,” Qumseya said. “If [investors] can't get comfortable, if the parking is not viable, then they won't move forward.”

“We’re in a place where people have to choose whether they want to spend their money on homes for people or homes for cars,” Drobenare said.