Let’s say you are a developer, doing an infill project in an area of considerable transit and walking potential. What possible reason to include parking as part of the project? It reduces the total amount of floor area that can be leased/rented out. It can also be very expensive to build, if the parking is in a garage.
So I put this question to a developer of a major infill project — and I was stunned by his answer. I had assumed the reasons had to do with the local zoning rules, and the difficulty in getting a variance. Or perhaps he felt parking was needed to make the project marketable.
In fact, he totally agreed that the parking was expensive and unnecessary. The building was in a desirable location, and did not require offstreet parking. And yes, there were zoning requirements, but a variance would have been possible.
Nope, the reason had to do with the bank. The people doing the financing had a standard calculation for the minimum amount of parking. Without parking, their view is that projects are not economical, and did not want to risk a default on the construction loan.
Now, this could have been a unique situation with just one particular bank. But researching other infill projects, there does seem to be a trend. For example, here was one creative solution to the problem:
Tenants who wanted a space on-site paid a premium for it—usually between $150 and $250 a month. The price varied to ensure that some on-site parking spaces were available when one of the building’s luxury units became vacant). The parking spaces in the structure blocks away, meanwhile, were leased primarily to nonresidents—office workers and other downtown commuters. The primary purpose of that parking structure was to secure a construction loan.
So to all you activists working to minimize parking requirements in the General Plan for your downtown area — you are probably wasting your time. It is the banks you need to worry about, not the local zoning.
I have also read similar. It makes a good argument for cities mandating parking maximums. No doubt that banks would have insisted on more parking in current developments in SF without that.
The entire city of Fort Collins, Colorado doesn’t have any parking requirements on commercial development. On the other hand residential development does have parking requirements.
The biggest benefactors are those rebuilding shops in “near downtown” areas; basically areas that were developed immediately after WWII. New shopping centers and big box stores are built with just as much parking as one would expect elsewhere, so based on what you said I do think the banks are the ones at fault here.
You might want to read this excellent piece. http://www.forbes.com/sites/markbergen/2012/01/20/are-mayors-asking-washington-for-the-wrong-thing/
I’ve heard this quite a few times, but short of empirical evidence (like the LA and NYC parking minimum papers), I’m inclined to believe that it’s only a short-term problem. Banks have a huge vested interest in not requiring more parking than is necessary, and while in any market there are of course people who do not act in their own interest, in the long-run, these people are punished, and capital is channeled towards those who make more profitable decisions (in this case, the decision to lend to people who don’t build parking).
So short of either a) empirical evidence, or b) some good a priori reason why there would be a market failure, I’m not going to worry too much about banks’ parking minimums.
In addition, there are always other banks; we don’t yet have a total banking monopoly in the US. And only *one* bank has to approve financing.
Whereas there is no “alternate government” to go to.
Fix the government regulations first, then target one bank at a time until one starts approving developments (and making money).
My bet is that Bank’s have the same rationale for their “irrational” demand as most minimum codes: “that is how much parking is provided elsewhere”.
If a developer managed to get away with a little fewer parking spots and be successful, banks would notice and lower their requirements for the next developments in the area. Until a new market minimum was determined.
Also, at least in sururban strip centers the resulting persistently unused parking could be redeveloped.
It seems to me that it could take quite a while for changes to percolate, once you manage to get rid of a minimum parking requirement. If people assume that the accepted amount of parking is required for competitiveness, and existing buildings are built with that amount, it would be hard to conclude that it would be profitable to be a pioneer in having significantly less parking. After all, whatever parking is provided will probably be well-occupied, especially considering that the infrastructure which delivers all those cars will also block the formation of an effective transit system, or pedestrian habits.
There’s an article at Streetsblog on how Portland OR had to convince banks to change their parking requirements for a walkable development.