Did This Landlord Prove That Parking Reform Can Lower Rents?
Portland is getting a new bike share service starting on July 19th and the city is installing 100 bright orange bike corrals all over town to support the system. Despite a process for bike share that has taken years and a public outreach and comment period that has spanned several months, some residents were surprised (and unhappy) to see the bike racks installed where they usually park their cars.
But perhaps the most interesting part of this story, so far, is a quote from the landlord who owns the duplex directly behind the new racks. Mike Papas, who runs a blog called “LandLordZen” claims that the loss of on-street parking will force him to reduce the rent he is charging to his tenants.
Charging For On-Street Parking?
Papas’ duplex doesn’t have dedicated parking for his tenants so, assuming they have cars, they park on the street. Although the building is on a duplex, SE Cesar E. Chavez is a busy street with no parking. Papas’ tenants will have to park at least 50 feet from their home from now on. Although the street usually has available spaces on the block face (Note: the author commutes by bike on this street every day) the inconvenience and loss of parking in front of the residence is apparently valued by Mr. Papas at $125 per month.
Access to that amenity is reflected in the rent Mr. Papas, whose tenants say is an extremely honest and ethical landlord, is charging them. This is no surprise. One common argument against reducing or removing minimum parking requirements is that allowing developers to build less parking doesn’t lower rents. Opponents to parking reform have gobs of tables showing rents for comparable studios in buildings with and without parking which reflect little to no discount (and surely not the $200+/month the parking is likely adding to the cost burden).
The problem with that argument is that given ample free or underpriced on-street parking, there is no major difference in the amenities offered by the building with parking and the building without parking. Often, when developers do build parking, they charge for it and if the off-street is cheap the lot will be mostly vacant.
Reform Parking and Reduce Rents
If cities permit parking, charge market rates, and only sell as many permits as there are parking spaces, then we expect to see developers build the amount of parking they need. If a developer chooses not to build parking in such an environment, the expectation is that the rent for the building will be cheaper and fewer residents will own cars.
In all likelihood, Mr. Papas will not be lowering his rents by $125 a month. Parking on this block is not extremely congested and even if it were, the market rate for off-street parking in this neighborhood is likely closer to $50/month rather than $125. The area doesn’t have permitted parking, yet, and in the event neighbors ask for permits, the monthly cost of on-street parking is unlikely to be above $10/month.
Nevertheless, if Papas does lower his rent because the BIKETOWN station was put in front of his property, one can imaging tenants all over Portland begging for a station to be put in front of their home next.