eTOD Briefs

Reducing parking means increasing affordability in eTOD

CNT and CMAP discuss who pays for required parking and some tools to reduce that cost.

The Center for Neighborhood Technology (CNT) has long recognized that housing and transportation costs need to be considered in concert. In Cook County, rent burden has increased by a whopping 49% according to the 2014 American Community Survey. The typical cost of owning a car in Cook County is $10,634 a year. These factors contribute to a disproportionate burden on low-income families. This issue is addressed in the webinar hosted by Drew Williams-Clark and Peter Haas, both with the Center for Neighborhood Technology (CNT), and guest speaker Lindsay Bayley, a senior planner at the Chicago Metropolitan Agency for Planning, which is available here (insert link for webinar). They discuss the interconnected relationship between affordable housing, parking requirements, and equitable transit-oriented development (eTOD).  

To help capture the unrealized potential and benefits of affordable housing near transit, Haas explained that CNT created the Social Impact Calculator for developers, decision makers, and the public. Based on observed parking utilization in a sample of multi-family buildings, CNT built a model to estimate household parking demand at any location in Cook County. Developers can use the Calculator to make decisions about how much parking to include in new affordable buildings. Parking is expensive: the average, inflation-adjusted cost of an indoor parking space in Cook County is $37,300. Fewer parking spaces means lower development and maintenance costs, which means lower rents.  

Urbanists increasingly recognize that parking is not the highest and best use of urban land and can drive up housing costs.
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Like many cities, the City of Chicago requires a minimum number of parking spaces per unit in most locations, which drives up the cost of rent by about 12.5% per space. In new market-rate, multi-family buildings, developers must include at least one parking space per dwelling unit. In subsidized (affordable) buildings, the requirements are lower, especially for buildings with smaller units. Thus, all residents are required to pay the added cost of parking, whether or not they use it. In response to this problem, Chicago's TOD ordinance now allows for parking reductions in new developments near rail stations and high frequency bus lines. This made first transit-oriented development without parking possible in Wicker Park, adjacent to the Division Blue Line Station. 

Despite these positive steps, parking remains a major issue within Chicago, and according to Lindsay Bayley, the parking requirements are outdated and ineffective. Bayley explains that requiring parking minimums encourages more driving, makes the cost of living more expensive, and undermines public transit. It also leads to a disproportionate burden on those of limited financial means, the old, young, and disabled, who are less likely to own cars but nevertheless have parking costs included in their rent.  

Instead, Bayley recommends separating the cost of parking from the cost of housing, so that drivers pay for the parking they use, and people without cars save money on housing. To be successful, parking costs must be unbundled from rent and minimum parking requirements must be phased out. Developers would only build the amount of parking that the market supports at full cost. Some drivers will avoid paying for on-site parking and use the street. As parking becomes congested on-street, the use of pricing or residential permits may be needed to balance the supply of parking on-street. Use of low-income exemptions to permit fees may be helpful to prevent displacement.  

Bayley explains that when paid parking is introduced, typically there are concerns regarding its impact on low-income individuals and families. While paid parking has a more visible cost, the hidden cost of free parking does significant damage to low-income families who are already paying more for everything that they buy so that wealthier people can park for free. When parking is free, the cost to build and maintain the parking is paid by everyone but the motorist, through higher rent or higher prices charged by retailers. The most vulnerable in our city are the least likely to own cars, and the most likely to be taking buses stuck-in-traffic behind motorists who can typically park free.  

There are several indirect costs that cities pay by providing parking, which include increased sprawl, increased impervious surface and associated stormwater management costs, reduced design flexibility, reduced efficiency of alternative modes (walking, public transit, etc.), and increased traffic problems. UCLA Professor Donald Shoup estimated that the cost of free parking is worth 22 cents per mile driven to work.  

Bayley also provides a series of non-pricing management strategies that can help support livable communities and make TOD more equitable. These strategies include: 

  • Unbundling parking from housing costs, so that rent does not include the cost of unused parking. In most rental properties, the cost of parking is included in the rent. By unbundling parking from housing costs – in other words, allowing residents to rent parking spots if they need them – it eliminates the increased parking pricing burden on families or individuals that do not have cars.  

  • Phasing out the use of parking minimums and implementing parking maximums in transit-priority areas. Rather than using minimum parking requirements, some cities have begun to implement maximum parking limits. This would set an upper limit on how much parking a developer can build in certain transit-rich or walkable districts.  

  •  “Parking Cash-out” for employees whose employers offer free parking. Employers can offer employees the option of continuing to park for free or the cash-equivalent-value of the parking, allowing the employer to lease fewer parking spaces. 

  • Sharing parking among multiple buildings with different uses. Shared parking is another strategy that can help alleviate the cost burden on both residents and businesses. It works best when uses have different peak periods of demand, such as an office building sharing parking with an apartment building or a shopping center sharing parking with a church. Shared parking encourages walking between destinations and reduces the overall demand for parking, which means lower development costs.  

  • Carsharing programs. Carsharing allows many people the freedom to drive when necessary, without the added cost of car ownership. Some cities have begun allocating parking for carshare vehicles, with the understanding that one vehicle can serve many households. 

All of these strategies rely on a better understanding of parking demand. With the Social Impact Calculator, CNT intends to provide the analytical underpinning to allow better parking management decisions that support eTOD. 

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