Parking is a common topic of conversation. When deciding on a destination to reside, shop, eat or enjoy entertainment, one of the first considerations surrounds easy and accessible parking.
Builders begrudgingly understand the attractiveness of parking. Not only are they forced to provide spots due to zoning and finance demands, they also understand that parking is a strong selling point, particularly in multifamily real estate projects. Yet, parking lots send construction costs skyrocketing, particularly when building multi-level parking facilities. Such costs tempt developers to reduce the ratio of parking spots to housing units so that more higher-rent-generating units can be built.
While parking lots will always be a “necessary evil” to stand out in a competitive market, the level of importance seems to be decreasing.
Apartment Appraisers & Consultants partnered with Apartment Insights to look at parking trends in metro Denver. On a per-unit basis, high-rise and midrise apartment parking showed a significant decrease in parking-spot to apartment-unit ratios. Factoring in smaller apartments on a per-bedroom basis, rather than a per-unit basis, revealed less of a reduction, but still evidenced a strong and growing trend toward reduced parking ratios.
For construction companies, revenue growth from rent has simply not matched the expenses necessary to build apartment complexes. Removing parking lots from a costly equation seems to be a natural budget reduction. Yet for now, smaller ramps or no parking at all may force renters to look elsewhere to house themselves and their vehicles.
Some developers are minimizing or outright foregoing onsite parking. For example, some have reached more cost-effective, off-site parking agreements with their neighbors. Others are pursuing other novel parking plans.
Alternatives include:
- Designating areas for Uber and Lyft drivers to pick up their tenants
- Providing car-share vehicle drivers with reserved parking
- Establishing stations for bicycle sharing
- Providing public transit passes for tenants at reduced costs.
Real estate development is certainly complex, and optimizing parking to meet current and future, changing parking trends adds further complexity. Having a trusted advisor and advocate at your side can substantially affect the project’s timeliness and overall success.