It seems to be conventional wisdom that residents — whether renters or buyers — would want available parking. But, in an increasingly walkable and public-transportation-driven urban society, more and more developers are choosing to forgo parking in their new residential developments.
But isn’t the ideal of eliminating parking in residential developments a death sentence?
As Urban Land Magazine recently reports, new economic trends point to “no.” In fact, they show us an economy in which thoughtful planning and elimination of unnecessary parking leads to a reduction in waste and an increase in profits. If you’re considering building a multifamily property, the future of your industry may change before you know it.
Here are five trends that point to that future:
1. Fewer people are buying cars.
In urban cities, younger people are moving away from car ownership, thanks to the multitude of options available for getting around in other ways. In fact, a recent prediction by analysts in the field postulates that private car ownership in the U.S. will drop by 80 percent in the U.S.
It’s an important fact to note — because developers are building with the future in mind, they should consider whether future residents will desire the same parking as today. In fact, when many people use cars today, the manner in which they use them (ride-share, taxis, self-driving cars) is often detached from the necessity of parking. So, future residential buildings (especially in urban areas) may not require parking to keep residents happy.
2. Walkability and public transportation play a huge role.
The report from Urban Land Magazine focuses on the prevalence of parking in San Francisco, and for good reason — San Francisco is a very walkable city with many options for public transportation. While parking spaces are obviously necessary in suburban developments (as services and buildings in suburban areas are so spread out), they are far less necessary in a town where residents can hop on the city bus or a commuter rail to get to their next destination, rather than attempt to drive in a congested city and spend time looking for sparse public parking.
3. If residents don’t need a car, they don’t want one.
In an effort to keep residents happy, developers often offer more amenities than necessary. Even if only half a building’s residents own cars, developers tend to plan for more parking spaces than needed. After all, just because a resident doesn’t drive much, who says they won’t want a car someday or at least for convenience?
The fact is, in deeply urban cities where public transportation is readily available, residents will typically see no reason to own a car on the basis of “just in case.” Cars cost money to buy, insure and maintain, and Americans are increasingly saying “goodbye” to the automobile.
Developers will always want to survey their demographic and their area of development to determine the local attitudes on automobile ownership. But, in most cases, they will find that residents in urban areas are replacing car ownership with public transportation, ride-sharing programs, and walking.
4. Developers who decrease or forgo parking spaces will offer other benefits.
Conventional real estate wisdom often scares developers away from big changes like reducing or eliminating parking for multifamily properties. But what little is lost in urban parking can be made up with other amenities that are much more useful to residents.
A building’s ground level, which would otherwise be reserved for resident parking, can be used to create a community for residents. Developers can use this space for fitness centers and other benefits, or choose to rent the space out to a grocery retailer or another business that adds to the neighborhood. The money saved on parking can also be used to maintain nearby public transit connections for residents. Or, developers can even use that extra money in their budget to buy a property closer to nearby transportation hubs.
5. Renters are fine with giving up onsite parking for their residence.
Despite trending evidence toward car-free lifestyles, developers are often hesitant to eliminate parking spaces for their new buildings, worried that no residents will buy or rent their units. This is obviously true in certain cities but, in larger cities like San Francisco and New York City, it is an unfounded fear.
In Urban Land Magazine’s report, projects in San Francisco — whether rentals or bought multifamily properties — either sell out with no parking at all, or, if they do have parking, sell fewer parking spots than allocated for by developers.
Obviously, if a building offers everything else a resident needs, parking doesn’t seem to be at the top of their list — at least in areas where other transportation options are readily available. Even if the number of parking spaces is reduced in a new development, developers can save money without losing residents. Not everyone owns a car today, and that number is only expected to drop in the future. It’s something important to keep in mind as you develop your multifamily properties.
Want more tips for building your multifamily property? Schedule a consultation with Chris Gardner today.