By now it’s well documented: people are driving less and buying fewer cars. This is particularly true among younger generations. According to a study by the University of Michigan, only 69% of 19-year-olds had a driver’s license in 2014, down from 90% in 1983. The percentage of 20-somethings with driver’s licenses has also fallen 13% over the past three decades.
ZipCar, Uber and other on-demand ridesharing services are likely to exacerbate these trends moving forward.
Nonetheless, most municipalities require developers to build at least one parking space per new housing unit, even in transit-oriented areas. This is particularly pronounced in Los Angeles, where the city’s minimum parking requirements require developers to build 1.0 parking space per studio unit, 1.5 parking spaces for one bedroom unit, and at least 2.0 parking spaces for units with two or more bedrooms.
The costs of building those spaces can quickly add up. In Los Angeles, it costs an average $83/square foot (SF) to construct an above-ground parking space; it costs $108/SF to build underground parking. This means a single parking space in Los Angeles can cost anywhere from $27,000 to $35,000 to construct.
In reality, these estimates are an understatement because they only refer to the cost of constructing a parking space in Los Angeles. These estimates do not include the cost of the land beneath, or soft costs and carrying costs.
Los Angeles land values vary drastically depending on the condition of land (vacant, improved, existing utilities), its shape, size and location, and how it is zoned. Land that is zoned for denser development often costs more because the land costs can be spread out over a larger number of units. Nonetheless, land values in Los Angeles are among the highest in the country. A CoStar analysis reveals that, as of May 2017, the average acre of land was selling for $13,000,000 million in Los Angeles, or about $300 per square foot.
The average parking space is 330 SF, and there are 43,560 SF per acre. This means that in Los Angeles, the average cost of land per parking space is nearly $100,000. When land costs and construction costs are combined, it means that developers often have to pay upwards of $127,000 to build an above-ground parking space; or more than $135,000 to build a below-ground space. Depending on the size of the unit, developers may be required to build more than one space per unit.
It’s no wonder, then, that the cost of parking has become prohibitively expensive for some developers. This is especially true for developers trying to build in dense urban areas like Los Angeles, where land is at a premium and construction costs (labor, materials, etc.) are higher than national averages.
UCLA Professor Donald Shoup demonstrates how break points in the cost of building a parking garage affect development decisions. He uses the example of a seven-unit apartment building (shown right). The four-story apartment building is typical of those found in Los Angeles. It sits on a lot that is 50 feet wide and 130 feet deep. The parcel is subject to the city’s R3 zoning, which would have allowed the developer to build eight units on the site, but the city’s (number of spaces required would depend on type of units, 1 for a studio, 1.5 for 1+1, etc) parking requirement meant that the developer would need to construct 18 parking spaces. Only 16 spaces could be squeezed into one level of underground parking. Building the remaining two spaces would require excavation of a second underground parking deck. The prohibitively high marginal cost of building two more spaces on a second underground level reduced the feasibility of dwelling units from eight to seven, a reduction of 13 percent.
Shoup goes on to explain that parking requirements not only reduce density on sites that are developed, but also reduce the overall number of sites that are developed at all.
If the required parking spaces increase the cost of constructing a building by more than they increase the market value of the building, they will reduce the residual value of land. Residual land value is defined as the market value of the most profitable development that could be constructed on a site minus the cost of constructing it.9 For example, if the best choice for development on a site would cost $750,000 to construct and would have a market value of $1 million, the residual value for the land is $250,000. If $250,000 is not enough to pay for buying and demolishing an existing building on the site, redevelopment won’t happen. The residual land value of a site for redevelopment must be greater than the value of the existing building on the site before a developer can buy the building, clear the site, and make a profit on a new development. Therefore, if minimum parking requirements reduce residual land values, they make redevelopment less likely.
In Los Angeles, a city starved for additional housing, arcane parking requirements are preventing the development of badly needed housing. More parking for cars means less housing for people.
One solution is for cities to rethink their parking requirements. New York City and Seattle only require one parking space per unit. Other cities have considered adopting parking maximums (particularly in transit-oriented districts) as a way to alleviate traffic congestion and promote walkable, dense urban development.
This isn’t unfamiliar territory for Los Angeles. In 1999, the city adopted its Adaptive Reuse Ordinance (ARO), which allows developers to convert economically distressed or historically significant office buildings into new residential units – with no new parking spaces required. In the three decades prior to adopting the ARO, only 4,300 housing units were built downtown. In the nine years after adopting the ARO, developers created 7,300 new residential units spread across 56 historic office buildings. Nearly all of these office buildings had been vacant for at least five years; converting them to residential housing became feasible thanks to the new ARO policy, and occupancy of these buildings has breathed new life into the downtown.
But developers only have so much control over the policies implemented at the local level. Sure, they can lobby policymakers to adopt more sensible parking requirements. Absent a zoning overhaul, developers must take things into their own hands.
And they can do so by implementing automated parking system, or “parking robots,” to optimize space that would otherwise be set aside for parking.
Although these systems vary slightly by company, they tend to work something like this: A driver enters a parking garage and is guided into a parking bay. After exiting the vehicle and locking the doors, the driver’s job is done. The bay is equipped with sensors and motion detectors to confirm there is nobody left in the car before beginning the parking process. The sensors scan the car for general size, width, height and weight. A parking robot then “retrieves” the car and, using a system of tracks throughout the garage, moves the vehicle to the most efficient parking space for that vehicle. Depending on the size and layout of the garage, the automated system might include parking lifts that allow the cars to be stacked efficiently on top of one another – similar to building blocks. The system will usual track and monitor vehicles at all times, shuffling cars as needed, to optimize space.
To retrieve a vehicle, simply swipe a resident key fob or parking ticket at the parking kiosk. A monitor will display which bay the vehicle will arrive in and its position in the cue. Cars are typically returned to their drivers within 2 to 5 minutes.
The concept isn’t exactly new. The earliest examples of automated parking garages date back to 1905, where Europeans parked their vehicles on a structure that looked akin to a Ferris wheel. Kent Automatic Garages built two automatic garages in NYC in the late 1920s and early 1930s; the garage at the corner of 61st Street and Ninth Avenue in Manhattan was dubbed the “Hotel for Autos”. The use of parking robots remains in its nascent stages here in the U.S., but these systems have been used abroad for decades. They’re particularly common in Germany, Japan and throughout the Middle East. We suspect U.S. adoption to increase as technology continues to be refined.
Unitronics UniDrive Unitronics UniPorter Unitronics UniVator
Vehicle Entry and Exit Bay Vehicle Conveyance Shuttle Multi-Level Vertical Lift
Automated parking garages can take many forms, from manual to semi- and fully-automatic systems.
For instance, CityLift offers five different parking design solutions:
- The Puzzle system is the company’s most popular, designed for compact urban areas. The Puzzle is a semi-automatic stacking system that CityLift calls ideal for new construction or retrofit projects that have a minimum clear height of 11’7”. This system can accommodate up to five levels of parking, with or without pits, and can be designed in tandem configurations.
- The Tower is best for narrow spaces, and can be built as a stand-alone garage or part of a new structure. This fully-automated system uses steel beams and columns and doubles as the building structure.
- The Aisle is a fully-automated system designed to accommodate large development projects. It can be built above or below ground, above buildings or behind and between other structures. The Aisle is popular for its ability to achieve high density parking.
- The Shuffle is optimal for one-story projects. It maximizes parking by eliminating “dead spaces” like driving aisles.
- The Stacker is CityLift’s only manually-operated system, making it one of the more versatile and cost-effective parking solutions. The Stacker is a quick and easy way to increase parking in buildings that offer valet service.
Depending on the system implemented, a developer can double – even triple – a project’s parking capacity. What’s more, they can do so while reducing the parking garage’s overall footprint.
These systems aren’t cheap. The cost per space for a robotic parking system depends on a number of factors, including the size and layout of a property, the total number of parking spaces needed, and the required speed of the system. The average turnkey price of a system ranges from $20,000 to $30,000 per space for a mid-sized garage. Yet when cost of land (or reduction thereof) is factored into the equation, the spaces become more affordable—roughly $10,000 to $16,000 per space, again, depending on project size.