Unbundling

City Council To Consider Plan To Build More Parking In Central City

September 5, 2017 By TonyJ 1 Comment

On Thursday, September 7th, Portland City Council will consider adoption of the Central City 2035 plan, a document which will guide development in the city center for the next 20 years.

Portlanders should be able to look at this plan and envision the city in 2035. Let’s do an experiment:

Think for a second about the world as it is now and what you would like Portland to be in 20 years. Think about where you’d like to live in the city, pretend you work downtown, and then close your eyes and imagine a commute in 2035.

How did you get there? Did you ride a bike? Did you take a bus? Was a robot driving that bus or a human operator? Maybe you lived downtown? Maybe you took a jetpack? Maybe you took a Lyft or Uber or something we can’t imagine yet?

Did your vision for 2035 include driving your own car to the central city and parking in a parking garage?

Probably not.

Why then do so many of the Performance Targets and Action Plans for our city’s next 20 years seek to incentivize and build new expensive car parking for central city commuters and visitors?

While Mayor Ted Wheeler has publicly criticized the plans of Prosper Portland to bet its future on parking revenues, when he (most likely) votes to pass CC2035 they will be codified in a set of Action Plans.

Building Parking, For Your Health?

For an example, look at the bizarrely named “Transportation Health and Environment” Action TR7. This action calls for “Incentives to Create Off-Street Parking” in an area that was “built prior to the automobile age.” The supposed problem for the Central Eastside is that developers don’t want to pay the high cost to build parking that no one will be using in 20 years. The solution proposed in this plan is to retrofit the district to accommodate automobiles, at a time in our history when we not only are well aware of the damage car culture has caused, but when we can, for the first time, see the likely end of the automobile age as we know it.

Old Town and Chinatown Parking Garages

But that’s not all they have planned for the Central City. Old Town / Chinatown is another area of town where they would like to mortgage our future tax revenues to build more parking garages. Check out Action Plan item RC44.

There are some great ideas in the CC2035 plan, we should definitely make more efficient use of the parking we have as peak car passes us by. It may even be the case that new parking garages will help spur development, but the public must be honestly informed about the true cost of these garages, the poor outlook for self-sustainability, and the negative impact they have on our transportation and climate action goals. Every dollar spent on a car parking garage is one less dollar we can spend improving transit, building affordable housing, and incentivizing non-car modes. We’ll lose the opportunity to spend many many millions of dollars on sustainable practices if we build more public parking garages and we will be paying the mortgage on them when they are, inevitably, empty.

Convertible Parking Garages? Not In The Plan

Proponents of new parking like to point to trendy articles about converting parking garages into housing or offices. This is probably less likely than we think. Underground parking will only be used as housing in dystopian scenarios and building parking to be convertible makes it even more expensive.

But there’s another reason we probably won’t see convertible Prosper Portland parking garages in the future, it’s not required in the plan. Developers won’t build much parking at all, unless we force them. Prosper Portland knows new parking garages won’t pay for themselves, so it’s trying to get PBOT to help pay with meter money. Any requirement to make new parking be “convertible” would only make those projects harder to pencil out.

City Council should require that any structured parking built with public subsidy be convertible to other active uses (not just storage). If PBOT and Prosper Portland claim these projects can be turned into housing or retail space, then there should be no resistance to this amendment.

Tell City Council To “Stop Building More Parking Garages”

There is a hearing on CC2035 on September 7th at 2PM at City Council and there will be another hearing on September 14th. If you plan to testify, please mention that the city should not build more parking garages. Let developers build parking if they require it. Demand that any new public parking be completely convertible to active uses.

Please write to city council today and tell them to commit to climate action goals, transportation goals, and affordability by removing Action Plans TR7, TR22, and RC58 and modifying RC44. Tell them that new parking will be a significant cost burden on the city and will tie up critical funds that could be better used subsidizing transit or housing.

Please send an email now and demand that any parking built with public money (or in agreement with Prosper Portland) be built such that it is convertible to an active use by design.

For more inspiration, check out our coverage of the CC2035 Discussion Draft and read over the testimony sent in by Portlanders for Parking Reform.

Building more parking now in 2017 is a mistake; it certainly shouldn’t be part of our long range plans for Portland.

How to Testify

To testify, please provide your full name and address. Testimony to City Council is considered public record. Testifiers’ names, addresses and any other information included in the testimony will be posted on the website. You may submit testimony to the Portland City Council on the Recommended Draft CC2035 Plan in any of the following ways:

By Email
Send an email to cc2035@portlandoregon.gov
Subject: CC2035 Testimony

In person at the public hearing
September 7, 2017 at 2 p.m. City Council Chambers: 1221 SW 4th Avenue, Portland
Additional hearing dates may be scheduled. Please confirm dates and times by checking the City Council calendar one week in advance.

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.

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.

Diversifying Portland’s Parking Toolkit with Unbundling Parking and Parking Cash Out

August 15, 2016 By Shoupista Leave a Comment

8715267346_57f4c2d72f_z — (Commuter traffic coming off the Broadway Bridge. Photo source: BikePortland.org)

Two weeks ago, Portlanders for Parking Reform wrote about the proposed Central City 2035 (CC2035) Plan may create more parking by increasing existing parking maximums in some of the Downtown parking sectors. While “parking is a fertility drug for cars”, to change travel behavior, parking policy cannot only target the supply side of this issue. If the City of Portland wants meaningful parking policies to help meet its mode-share targets–85% non-single occupancy vehicle (SOV) trips–and climate goals, such policies must address both supply and demand. Not only may the CC2035 Plan take a step backward on curbing parking supply, it also does not mention any parking demand management policy.

The good news is that there are viable parking policy options that can be applied to Portland’s downtown and neighborhoods to reduce the demand for parking. The Planning and Sustainability Commission and City Council ought to consider adopting unbundling parking and parking cash out for Portland’s Central City and gradually expand these policies into other neighborhoods.

Bundled Parking: Paying for Desserts That You Don’t Eat

Building and operating parking has high costs. Unbundling parking means separating the costs of parking and charging the users of parking directly. To illustrate how parking is currently bundled with the prices of housing, goods, and services that we consume and the need to unbundle it, let us think about the following scenario:

Imagine that the City of Portland requires restaurants to provide free dessert with every meal ordered by customers. The price for meals would increase to cover the cost of “free” desserts. While this may be good news to people who love desserts, such requirement has negative consequences. First, all diners now have to pay more for each meal whether or not they want to eat dessert. Second, some people would eat desserts they would not have ordered if they had to pay for them separately. Bundling desserts with food induces people to over-consume desserts, which leads to more obesity, diabetes, and heart diseases.

The City of Portland does not require free desserts with every meal but it does have parking minimum requirements for new development. Although the Central City district is exempt from such requirements, there are no guidelines on unbundling the costs of parking from development. Just as unbundled desserts would give diners more control over what they eat, unbundled parking will give travelers more choices by allowing people to decide how much parking they need and want to pay for.

When cities require developers to build off-site parking spaces, the cost of parking usually doesn’t get separated from the other costs of the development, making unbundling parking difficult. The good news is Portland’s Central City has no parking minimum requirement, which makes implementing unbundling policy more feasible. Parking can be unbundled from housing by offering residents the option to lease apartments and parking spaces separately, thereby reducing the cost of housing for those who do not own cars. Parking can also be unbundled from office and retail leases, allowing businesses to only purchase the number parking spaces they deem necessary for their employees and customers. Alternatively, parking costs can be listed as a separate line item in commercial lease agreements to show tenants how much parking costs and allow businesses to recover such cost by charging parkers directly.

Unbundling: Tried and Tested

Many cities in the U.S. has adopted unbundling parking policies. For example, San Francisco’s zoning code requires off-street parking spaces for residential buildings with 10 or more dwelling units to be sold or leased separately from the rental or sale of dwelling units. Berkeley also adopted a similar ordinance that requires unbundling parking. In central Seattle, approximately 50% of all multifamily units have unbundled parking from rent.

Lastly, Los Angeles’s Adaptive Reuse Ordinance (ARO) has permitted developers to unbundle parking to encourage converting and redeveloping old buildings. A recent research study shows that ARO apartment units with bundled parking cost about an additional $200 per month, proving that housing does become more affordable when it gets separated from parking.

Unbundling parking may be difficult to apply retroactively to all existing buildings, but it is not impossible. The City should at least explore the option of unbundling parking for current affordable housing units. This will offer existing low-income residents the same benefits of not paying for parking they do not use, freeing up more budget for housing. Portlanders for Parking Reform urge the Planning and Sustainability Commission and the City Council to consider adopting unbundling in CC2035 first for new development and then apply the same policy to existing affordable housing units.

Parking Cash Out: A Second Paycheck

According to the Parking Cash Out Report, “free parking is the most common fringe benefit offered to workers in the U.S., and 95 percent of American automobile commuters park free at work.” Most employers in Portland either provide parking for free or partially-subsidized employee parking. Even though many workplaces provide additional commuter benefits such as transit passes, the financial subsidy for parking often exceeds the subsidy for transit or other modes. Therefore, free or partially-subsidized parking is an invitation to drive alone to work.

Another policy to effectively reduce demand for parking is to offer workers the option to “cash out” their employer-paid parking subsidy. Parking cash out provides commuters the option of cashing out their employer-paid parking subsidy, and use it on other transportation modes or to keep it as a second paycheck. In addition, parking cash out would reward commuters who do not use parking by giving them financial incentives to use healthier and greener modes of transportation, such as walking, biking, and public transit, thereby changing travel behaviors and contributing to the City’s mode share targets and climate goals.

California passed a state law in 1992 that requires many employers to provide cash out options to their workers. A 1997 study in Los Angeles County estimated that mandatory cash out reduced the number of daily vehicle trips to work by 11 percent and commuter parking demand by 13 percent, or 0.4 spaces per 1,000 square feet of office space. If Portland wants to meet its mode-share targets for Downtown (85% non-SOV trips), it would need to set parking maximums at 0.25. That is an ambitious number that will undoubtedly cause a lot of political push back. However, parking cash out is an appealing policy option to help meeting that goal because it brings modest and incremental change and does not require employers and commuters to suddenly change behaviors.

Good for Employers

According to the U.S. EPA, “employers provide an estimated 85 million free parking spaces for commuters—spaces with a net worth of nearly $31.5 billion”. The same U.S. EPA report estimates that annual per space costs vary between $360 and $2,000. In the High Cost of Free Parking, Donald Shoup shows that employers save $40 a year per $1 annual cost for doing parking cash out, with the assumption that the capital cost per parking space is $10,000 (this number is likely far below the average cost of an office parking space in downtown Portland).

Subsidizing parking costs employers a lot of money. Coupled with unbundling parking, parking cash out can significantly reduce demand for parking and offer savings to businesses. There are several benefits to employers associated with decreasing commuter parking demand:

(1) Employers can reduce costs associated with leasing or owning and maintaining parking spaces.
(2) Lower parking demand allows businesses to convert employee parking to customer parking, which may attract more customers.
(3) Businesses can also convert parking spaces into profit-generating activities.
(4) Reduced commuter parking demand will eliminate the need for new parking construction.
(5) Recruit and retain workers by offering parking cash out as a valuable fringe benefit.

Good for Employees

Not only does parking cash out create benefits for employers, it also does for employees. For starters, it increases equity among all commuters. Employer-paid parking does not benefit commuters who ride public transit, walk, or bike to work. However, cash out allows commuters receive the same benefit regardless of how they travel. Secondly, cash out benefits non-auto commuters without disadvantages for auto-commuters. Workers who want to park for free can continue to do so, but they will be able to receive the same amount of benefits if they decide not to drive.

Research in transportation planning has repeatedly demonstrated that higher-income individuals are more likely to drive to work alone, while lower-income individuals are more likely to carpool, ride public transit, bike, or walk. As a matter of fact, using the best available data from the Census Transportation Planning Products, BikePortland reported that only about 5% of all downtown Portland workers who drive alone to work are low-income.*

5% of all drive-alone downtown commuter earn less than $30,000 a year — Image source: BikePortland

The same general trend is also applied for homeowners versus renters (Portland renters are 6 times more likely to not own a car). Thus, without parking cash out, many employers regressively provide subsidies to help wealthy commuters save money on transportation but excludes poor commuters from the same benefit. In addition, just as unbundling parking would lower housing costs, cash out would provide financial benefits to car-less low-income households and renters who are increasingly getting priced out of Portland’s housing market.

Basically, parking cash out is a win, win, win.

Moving Forward

On July 26th, Portlanders for Parking Reform asked the Planning and Sustainability Commission to amend the proposed CC2035 draft, incorporate unbundling parking and parking cash out as recommended policies, and direct city staff to study how these policies will be implemented and administered. Portland has set ambitious transportation and climate goals for the next twenty years, but our currently proposed policies, namely parking ratios, only focus on managing parking supply and lack demand-based approaches.

Unbundling parking and parking cash out are the other side of the parking equation that have proven to be effective, low-cost, and more politically favorable. These policy ideas are not only important to Portland’s long range plan but will also influence the results of the City’s current parking projects, such as the residential permit program, performance-based pricing, and shared parking. Unbundling and cash out will diversify our current parking toolkit but most importantly, they will also contribute to other community goals such as housing affordability and access to more travel options.

Update: *The author added a sentence and a chart to highlight percentage of drive-alone downtown commuters who are low-income