Shoupista

Bundled Parking Adds a 17% Premium or $1,700 a Year to Your Rent

July 18, 2017 By Shoupista 6 Comments

The housing affordability crisis has reached record levels in American cities. According to the Joint Center for Housing Studies, about half of the renters in the U.S. are cost-burdened (paying over 30% of their income for housing) and one in four are severely cost-burdened (paying over 50% of their income for housing) in 2014.

Part of the problem is that local government requires housing development to over-build off-street parking. As a result, most Americans pay for parking as part of their rent regardless if they need a parking space. Policy experts and housing/transportation advocates have argued that parking requirements should be eliminated or reduced as this arbitrary regulation has made housing more unaffordable by (1) imposing substantial development costs that get passed onto tenants; and (2) reducing overall housing supply by limiting density.

The Hidden Cost of Bundled Parking

To answer the question: What are the effects of on-site garage parking on housing costs in American cities? A recent study by Gregory Pierce and C.J. Gabbe found that renters living in metropolitan areas pay approximately $1,700 per year or 17% of a unit’s rent for the bundling of a garage space with housing. Moreover, the authors estimate that there are about 708,000 urban carless renter households with a garage parking space. Altogether, these households pay $440 million a year for bundled garage parking; that is $36 million more than the amount of federal money the State of Oregon spends on rental assistance in 2016.

Using data from the American Housing Survey, Pierce and Gabbe concluded that 71% of carless renters live in a housing unit with bundled garage parking and they pay an average of $621 a year or a 13 percent premium on their rent for parking they do not use. This raises a serious equity issue since carless and renter households are much more likely to be lower-income than their counterparts (households with car- and/or home-ownership). Indeed, the study finds that the average income for carless households with a garage space is about $24,000 compared to $44,000 for other households. Because bundled parking forces poor carless renters to pay for a luxury they do not need, it inevitably makes it more difficult to save money to meet other basic needs such as education, healthcare, or better living conditions.

The study argues that when developers are required to provide parking on-site, they have little or no incentive to unbundle parking costs from rent because there would be an oversupply of parking spaces. Thus, the authors recommend that cities reform parking regulations to either eliminate or reduce parking requirements for housing development and enable developers to charge parking separately from rent.

Parking Stalls Housing Affordability in Portland

The study explores parking’s effects on rents at the national level but the policy implications are very relevant to Portland. According to the Portland Housing Bureau, more than half of Portland renters are cost-burdened, spending more than 30% of their income on rent. At the same time, only 59% of renters drive to work. But parking minimums have not only raised rents but also stopped affordable units from being built since 2013, and efforts to increase affordability are currently stalled by parking in Southeast Portland.

In February 2017, the new Inclusionary Housing rules went into effect in Portland, allowing housing projects near frequent transit to apply for a waiver for parking requirements. The Urban Development Group (UDG) filed an early assistance request for three proposed residential projects in Sellwood. The proposal, if approved, would provide 40 affordable housing units and 170 market rate units in exchange for waiving a total of 46 parking spaces that the projects are required to provide.

Despite the need for more affordable housing units in walkable and transit-friendly neighborhoods, the Bureau of Development Services (BDS) thinks that one of the projects provide on-site parking spaces as required by the City’s Development Standards because it is not located within 500 feet from a transit street with 20-minute peak hour service. If BDS refuses to ~~interpret the Code and transit service standards more favorably~~ grant a variance (which can be appealed by the neighborhood slows/kills the project), Sellwood will lose the opportunity to gain 40 affordable units and get 46 private parking spaces instead. It will also set an unwise precedent that will discourage future development proposals from trading parking stalls for affordable housing units.

But the impact is more than the lost opportunities to build affordable units. “By driving up the cost of development, parking requirements not only make the cost of developments that do get built more expensive (developers have to pay for the land and construction for parking, and pass these costs on in rent), but parking requirements also have the effect of reducing the amount of housing that gets built and because fewer units are built, there’s less supply, and that serves to drive up the rents on all the units in the marketplace,” said Joe Cortright, a Portland urban economist and contributor at City Observatory.

While the Inclusionary Housing ordinance was a positive step forward in parking policy reform, it did not go far enough. Allowing affordable housing projects near transit to apply for a waiver for parking requirements is good but eliminating parking requirements entirely is much more effective in supporting housing affordability. In May, Mayor Wheeler publicly said that “the debate: ‘Parking vs Housing?’ It’s really over“. But as long as Portland City Council continues to allow stealth parking subsidies in the form of parking requirements, the majority of renters will continue to be burdened by the hidden cost of parking.

Portland Included in FHWA’s Parking Pricing Case Studies

April 16, 2017 By Shoupista 1 Comment

(On-Street Parking in Boise Neighborhood)

The Federal Highway Administration (FHWA) last month released two documents – “FHWA-Parking Pricing Workshop Summaries” and “FHWA Sponsored Parking Pricing Projects Update 2017” – on parking management and pricing initiatives in several U.S. cities including Seattle, Denver, and Portland.

Since FHWA sponsored the Portland Parking Symposium in June 2015, the City of Portland has made notable changes in its parking policy and management programs such as (1) raising downtown meter rate to $2.00; (2) developing an on-street parking toolkit for NW Portland; and (3) removing parking minimums for housing projects under the Inclusionary Housing Zoning Code near frequent transit.

The workshop summaries document also noted a neighborhood on-street parking permit system in the works:

“few neighborhoods currently have parking permit programs, and the city is looking to enact new policies to address parking shortages where they exist. Everyone who lives in those residential districts will be entitled to parking; however, it will not be free”.

However, the highly anticipated permit program never came to fruition. After a year-long public process and receiving support from both neighborhoods and city staff , the residential permit program was blocked from even getting a vote by Commissioner Amanda Fritz. Subsequently, all documents and information about the residential permit program were removed from the project website.

The FHWA report shows many other cities, such as Boston, Denver, Houston, and D.C., use neighborhood residential permits to help manage on-street parking. There is no reason why Portland cannot implement this tool. It is unclear whether City Council plans to revisit the residential permit program this year, but the pressure for residential permits will continue to grow as some neighborhoods may resist new development under Inclusionary Housing and increasing housing infill due to fear for more competition for on-street parking.

Parking Is Often Over-Supplied at Transit-Oriented Development

February 13, 2017 By Shoupista 4 Comments

(Pearl District. Photo source: Explore the Pearl)

In the past two decades transit oriented development (TOD)—compact, walkable, and mixed-use development centered around high quality transit—has become an increasingly popular approach to tackle the urban ills of traffic congestion, lack of affordable housing, and neighborhood disinvestment. However, restrictive land use regulations like minimum parking requirements have thwarted the success of many TOD projects by compromising the quality of project design and the surrounding built environment with parking.

Parking requirements are problematic for TOD because (1) excessive parking incentivizes driving and works against the purpose of TOD, which is encouraging people to shift from driving to transit and making destinations more accessible by walking; and (2) land in proximity of a transit station is the most valuable and holds most potential for housing and retail, but much of this prime real-estate is wasted on underutilized parking.

So how much (less) parking should be required for transit-oriented development? To answer this question, Professor Reid Ewing and his team at the University of Utah studied parking occupancy, trip counts, and travel behaviors at five TODs in the U.S.:

Englewood, CO in the Denver region;
Wilshire/Vermont station in Los Angeles
Fruitvale Transit Village in Oakland
The Redmond, WA station in the Seattle region;
Rhode Island Row in Washington, DC.

In a newly released report, the researchers concluded that the five TODs in the study generated considerably fewer trips and used less parking compared to the Institute of Traffic Engineers (ITE) guidelines. In addition to having much less parking than the ITE guidelines, the actual parking utilization during peak times was considerably lower than the supply, between 58 and 84 percent. The findings suggest that existing professional engineering standards and local regulations result in parking over-prescription, stifling the development of housing and other valuable uses near transit stations.

What can Portland learn from the findings of this study?

Lessons For Portland From Five TODs

1. TOD is likely to fail if it is built to accommodate cars

The Englewood TOD had the lowest peak parking occupancy rate—58 percent. This oversupply of parking is the result of negotiations with Walmart, which insisted that residential development provide a 1.5 parking spaces per dwelling unit ratio (instead of 1 parking space per dwelling unit proposed by the City) to prevent residential parking from spilling into retail lots.

Englewood turned out to be an auto-oriented TOD. Sixty percent of trips to the site are done by cars, and it had the lowest rail mode share—14 percent. Consequently, the civic center and ground floor retail area directly adjacent to the transit station has struggled to generate activities and foot traffic. Ironically, the more auto-oriented commercial areas with lots of surface parking and further away from the station performed better. The study concludes that “TODs may not achieve their full potential if designed for the automobile in a hybrid configuration like Englewood’s”.

I wrote about the Peloton Apartments and the ludicrousness of offering free parking while charging $1,800 for a one-bedroom unit when Portland has a housing emergency. The Peloton Apartments is not a TOD but it has just as much access to transit (four bus routes within 0.5 miles plus bikeshare stations) and the same lesson applies. Press Blocks, a proposed mixed-use development only steps away from the Providence Park MAX station in Goose Hollow, has proposed to add 487 underground parking spaces. If we want housing near transit to be more affordable, don’t over-build parking (an underground parking stall costs $55,000). If neighbors want less traffic in their neighborhoods, don’t incentivize new residents to bring their cars with free parking.

Although parking minimums are waived for development that provides affordable units near transit under inclusionary zoning, the exemption does not apply when developers pay a fee in-lieu for affordable housing. Parking should not be a required for development near transit regardless if it is under inclusionary zoning program.

2. TOD doesn’t need the “T”

The Redmond, WA TOD is an interesting case because it is the only TOD in the study that does not have a rail station. The 322-unit multifamily mixed-use project sits adjacent to The Redmond Transit Center served by ten different bus routes. The project was made feasible after the City amended its downtown zoning ordinance to allow higher density, encourage greater mix of unit sizes, and reduce parking requirements. While most trips to the area are done by driving (65 percent), it’s transit mode share (13 percent) performance is as good as the Englewood TOD anchored next to a light rail station. This may be the result of limited parking supply; the TOD has a 74 percent peak parking occupancy rate—second highest in the study.

The Redmond example supports the argument that proximity to rail station is not essential for TOD. A 2013 study by Daniel Chatman at UC Berkeley argues that distance from rail is not as critical as parking availability, quality of bus service, mix of different uses, density, and walkability in influencing transit use and auto-ownership.

Most Portland’s urban centers and corridors are very walkable, moderately dense,and have a mix of diverse uses. TriMet’s frequent bus routes like the #4 and #6 have the same service frequency as the light rail serving the Englewood TOD—15-minute mid-day headway on weekdays. Portland can reap the benefits of TOD without expensive and lengthy rail projects. For example, the Division Transit Project has the potential to spur development of housing, community gathering space, and retail destinations accessible by walking and transit on outer SE Division, but only if public agencies show leadership and commitment to prioritize transit over automobiles by providing dedicated transit lanes and limiting parking supply.

With more progressive parking policies like eliminating parking requirements, demand-based pricing, and residential permits, Portland’s centers and corridors would be well positioned to become transit oriented districts (TODs) and meet the City’s climate action and mode-share goals. Fixing our broken parking policies would be cheaper, faster and more effective than investing hundreds of millions of dollars in new rail transit infrastructure.

3. Reduce demand by sharing, unbundling and pricing parking

All five TODs in the study implemented parking management strategies including shared parking, unbundling, and pricing to reduce parking demand. The observed lower peak parking occupancy rate proves that progressive parking policies combined with access to rapid transit can effectively reduce parking demand.

Having the most parking management tools at its disposal, the Rhode Island Row TOD allows the same parking spaces to be shared between residential and commercial uses, unbundles parking from apartments by leasing each parking stall for $150 a month, and charges commercial parking $2 per hour or $24 per day. The results are indisputable. Rhode Island Row’s peak parking occupancy is only 64 percent of total supply. Almost 60 percent of trips are done by non-driving modes and it generated only 35 percent of trips compared to ITE’s estimate.

In Portland, parking is mostly bundled with housing, regardless whether renters want or use it. Parking is also mostly free outside of downtown, and not allowed to be shared among different uses. While the City is currently experimenting shared-parking in Northwest Portland and planning for performance-based pricing, more aggressive demand management policies such as unbundling parking from housing and residential parking permits will make our streets less congested, get more people out of cars, and free up more space for housing.

Think Deliberately and Flexibly

Putting housing, jobs, retail and services near frequent bus stops and rail stations can facilitate higher use of transit, walking and biking. On the other hand, over-supplying parking sends the opposite signal to travelers, encouraging more driving and neutralizing the intended benefits of transit-oriented development. If Portland’s planners and elected officials are serious about increasing affordable housing and transportation choices, and meeting our climate goals, they need to think deliberately about transit investments and advocate for prioritizing transit access. Spending $32 million on a parking garage in the Rose Quarter or imposing arbitrary parking ratios on new non-inclusionary zoning development near transit suggests they are not.

Flexible land use regulations and parking rules allow transit-oriented development to realize its full potential. Policy tools like shared parking, unbundling, and performance-based pricing can effectively manage parking demand and give developers more flexibility to produce high-quality development. With that in mind, planners and elected officials must be bold and make these parking management tools available so Portlanders can have increasing transit and pedestrian access to housing, jobs, and service, not empty parking spaces.

Portland’s Parking Policy Puts Car Storage Before Housing Affordability

November 15, 2016 By Shoupista 1 Comment

A brand new apartment building with 268 units on N. Williams Ave. opened last month. This apartment is within a 10-minute walk from four TriMet bus routes (#4, #6, #24, & #44), a New Seasons grocery store, and served by the Vancouver-Williams bike lanes and two Biketown stations. The location is excellent for carless Portlanders. Since owning and operating an automobile can cost about $9,000 a year, savings from living without a car means that you have more budget for necessities like housing, health-care, or food. By this logic, the City should encourage more housing development in neighborhoods with abundant transportation options to enhance affordability.

However, housing in transit-rich neighborhoods is becoming increasingly unaffordable. In this new building, a one-bedroom unit costs as much as $1,870 a month. In addition, despite being very accessible by walking, biking, transit, and bike-share, this development includes 237 underground parking stalls (185 residential and 52 commercial), a luxurious amenity that does not benefit people without cars.

I was told by the leasing office that they are running a special offering 9-months of free parking to new tenants. So if you are a car residing in Portland, you will never be homeless because free parking is available almost everywhere. But if you are a renter looking to live in a walkable and transit-accessible neighborhood, you may be out of luck.

Portland’s Perverse Priority: Shelter for Cars, Not Housing for People

In 2013, pressured by residents anxious about growth, City Council adopted a tiered system of minimum parking requirements for new development with more than 30 units. Many housing and transportation advocates believe that this arbitrary mandate have suppressed housing supply and increased the costs of housing.

In September, the White House released a policy document stating that “[p]arking requirements generally impose an undue burden on housing development, particularly for transit-oriented or affordable housing.” As housing gets more and more unaffordable in Portland, our city policy continues to prioritize provision of free park over affordable housing units. Moreover, minimum parking requirements act like a fertility drug for cars. Portland’s 2013 parking mandate has undermined its own climate and transportation goals by inducing more driving, air pollution, and carbon output.

Parking Requirements Raise Income Requirements

Free parking isn’t free. Underground parking costs about $55,000 per space to build according to the Bureau of Planning and Sustainability. In this apartment building’s case, that is $1.3 million added to the development cost, and it is very likely that every unit is now marketed at a higher rate in order to recoup the high costs of free parking. In other words, parking requirements may have ended up raising the income requirements for living in transit-accessible neighborhoods.

To afford paying $1,870 a month on rent, you would need to earn about $68,000 a year. The units in this apartment building may have been more affordable if the development had cost $1.3 million less. Affordable rental units in Portland’s transit accessible neighborhoods are diminishing and parking requirements exacerbates this issue by escalating new housing development costs.

Excessive Parking Supply Won’t Fix Neighborhood On-Street Parking

If a underground parking stall costs $55,000 to build, why would the building management offer 9-months of free parking? Because while the City can require new development to provide on-site parking, it cannot require tenants to park in them. As long as on-street parking remains free, tenants will be incentivized to use curb parking instead of paying to park on-site.

Parking requirements force developers to over-supply parking, which they then give away for free because demand for paid parking is too low to fill the stalls. But the high costs of free parking need to be recovered somehow. As a result, carless tenants end up subsidizing other people’s free parking with their rent.

When buildings offer free parking, they are providing a strong incentive for new tenants to bring their cars with them. In this case, after the 9-month free parking period is over, tenants who brought their cars with them will be inclined to park on the residential streets for free instead of starting to pay for off-street parking. Neighbors who support minimum parking requirements hoping it would prevent parking spillover may soon find their plan backfiring.

As one resident states in her public testimony, Portland’s parking policy is absurd:

“I live in a building with garage parking that is not even full. I do not own a car, but my rent subsidizes the cost of these spots which were “free” at the time I signed my lease because the apartment company was unable to fill them with paying car owners. When I toured apartments on SE Division, THE LEASING AGENTS suggested that if I had a car it was better to park on the street because that was free but the building was charging for garage space. This is all so absurd! Street parking demands should be managed via a residential permitting system. Parking minimums will not help.” – Ellie H

We Can Fix It: Support Housing for People, Not Shelter For Cars

Mayor Hales has proposed to repeal the 2013 parking mandate with Amendment 34 to the Comprehensive Plan. This amendment will effectively eliminate parking minimums for sites near frequent transit service.

This a critical opportunity to set housing for people as priority over shelter for cars, but it won’t happen without your help. City Council needs to hear from you. You can take action in one of the following ways:

Write today to City Council telling them why you support eliminating parking requirements. Write to cputestimony@portlandoregon.gov with subject line “Comprehensive Plan Implementation” Please cc: or bcc: pdxshoupistas@gmail.com. Tell them in your own words that housing is more important than car parking and they should pass Amendments 34 to the Comprehensive plan to eliminate minimum parking requirements in mixed use zones.

If you are available to testify in-person on Thursday, November 17th (or if you can help sign others up at lunch) please RSVP here: https://goo.gl/forms/8ICMdizpy8nIUsZQ2

The Portland Independent Chamber of Commerce (http://picoc.org) is sending an open letter supporting this policy change. If you are a business owner, please sign-on. If you are not a business owner, ask your favorite small businesses (food carts, retailers, etc) to endorse this letter

More information about testifying can be found on this article

Providence Portland Opposes Parking and Transportation Demand Management Reform

October 17, 2016 By Shoupista Leave a Comment

council-hearing-providence — (City Council Hearing on October 13, 2016)

It is ironic that hospitals are sometimes the most vocal opponents against policies that encourage healthy transportation choices and improve community health. At the public hearing on October 13, Theron Park and Michael Robinson, representing Providence Portland Medical Center, expressed their opposition to the proposed new Transportation Demand Management (TDM) program (title 33.266.410 in the draft zone code amendments), citing that “the requirement of pay-to-park could affect and will affect the lowest wage caregivers” and “the lack of administrative rules” as reasons to not adopt this TDM requirement.

Their claims are at best unsupported by evidence, if not disingenuous. Rather than actually advocating for low-wage workers or being a good public steward for the City, Providence wants to see a good policy fail because it does not want to charge its employees for parking and encourage them to use healthier modes of transportation.

The “Poor” Excuse

Opponents of pricing parking often use concern for poor workers as their number one reason to keep parking free. As I have discussed in a previous article, there are many things that poor people need more than parking, such as housing, food, and health care, but somehow free parking gets a “free pass”.

Providence claims that “pay-to-park could affect and will affect our lowest wage caregivers”. But this concern can be easily be addressed by (1) surveying all employees at the Providence hospital to understand how workers actually get to work; and (2) offering parking discounts or commute subsidies to low-income workers who are car-dependent.

It is possible that Providence has no idea how their low-wage workers are getting to work because there is currently no TDM policy that requires medical institutions to track how their employees are getting to work. In addition, cities like Austin and Sacramento have adopted low-income employee parking permits to ease the financial burden of priced parking. The City of Portland has also adopted a similar program to accommodate low-wage workers when City Council raised downtown meter rates to $2 an hour.

So how many “lowest wage caregivers” are there at Providence? Using the Longitudinal Employer-Household Dynamics mapping tool, I estimate that approximately 7.5% or 350 of all Providence employees earn less than $15,000 a year. Since car-ownership is a huge financial burden, a it is probable that significant portion of Providence’s low-income worker use non-driving modes of transportation to get to work (the Hollywood Transit Center and 3 bus lines are within ¾ of a mile). So saying that you don’t want to charge for parking because it may burden the 7.5% of your employees who are already unlikely drive sounds a lot like a disingenuous excuse to continue to give free parking to wealthier employees.

Success in Seattle: Lesson for Portland

At the start of the public hearing, Mr. Park touted that Providence has already “reduced single-occupancy vehicle rate from 88% to 68% in the past two years”. To be fair, that is a pretty good reduction. However, compare to Seattle Children’s Hospital, Providence certainly has a lot of room for improvement. Seattle Children’s Hospital has a 38% drive-alone commute rate in 2006 and it has set an ambitious TDM target to reduce the share of drive-alone commuters to 30% by 2028.

The general rule for reducing driving is to make it more attractive to take alternative modes of transportation and less attractive to drive, and Seattle Children’s Hospital has a “multi-faceted strategy” to achieve just that.

The hospital offers a variety of incentives to not drive:

free transit passes;
free bicycles for employees who pledge to bike at least two days a week;
Guaranteed Ride Home to those who carpool, walk, bike, or take transit – a free taxi ride home in the case of an emergency;
$4 a day added to your paycheck for those who do not drive;
free shuttle service from transit hubs to the hospital.

At the same time, the hospital’s parking policy creates disincentives for driving:

charging for parking on a daily-basis;
daily parking pricing ranges from $2.25 to $10;
requires some employees to park off-site and take the shuttle to work.

sch-pic-1 — (Seattle Children’s Hospital offers double financial incentive for workers to not drive to work.)

Buying a monthly parking permit is an investment that encourages you to drive and park as much as you can since it is already paid through the month. A daily-pricing structure provides more flexibility to allow commuters to decide which mode they want to use each day.

Providence seems to be very concerned that City Council will adopt a TDM policy without knowing how to implement it. However, the example of Seattle Children’s Hospital shows that it is not very difficult to implement multiple TDM strategies at once and medical institutions can reap many benefits from offering a diverse set of commute benefits and having healthier and productive employees.

We have a rare opportunity on the table to adopt a TDM policy that will help meeting our transportation and climate goals and give people more mobility options and the choice to be healthy. Providence and other health-care institutions should get out of the free parking business and stop holding back Portland from adopting sustainable and healthy transportation practices.