Developers Attempt to Strike a Balance on Parking
Parking considerations are playing a bigger role in apartment real estate development, as builders attempt to strike a balance between profit, regulations and tenant demands, reports National Real Estate Investor. That task is made more difficult as construction costs rise, regulations shift and apartment living becomes less car-centric.
Parking costs $30,000 per space to build
“What will you do with all these parking spaces that you might not need in 10 years if all these trends with ride-sharing and self-driving cars continue as projected?” Rick Haughey, vice president for the National Multifamily Housing Council (NMHC), asked the news outlet.
The article notes parking is a big cost upfront for developers. Structured parking reportedly costs about $30,000 per space to build, however, there could be an additional cost regarding other additional units or amenities that can’t be built because of the parking requirement.
Parking demand depends on location
Haughey noted parking remains a highly desirable amenity for some projects, depending on the location of the new development. Carolyn Mendel, vice president of development for The NRP Group, told the news outlet that even commuters in the suburbs kept a car at home to get around on the weekends.
In Boston’s urban areas, Mendel said NRP might only build 0.5 to 1.5 parking spaces per apartment. “We are even starting to see apartment projects in the urban core building without any parking at all,” she noted.
Officials, investors also impose parking space quotas
Yet tenant demand isn’t the only consideration. Developers also must meet the requirements of other stakeholders. “Many investors still believe in one to two parking spaces per unit,” Haughey explained. Some large cities have lowered parking space requirements for developers, but others haven’t.
To satisfy stakeholders that a reduced parking plan is sufficient, developers are proposing innovative solutions. For mixed-use projects, shared parking agreements are popular. Some developers are said to be reducing the need for parking by providing bike storage areas, partnering with on-demand transportation companies like Zipcar and subsidizing mass transit passes for tenants.