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The Politics of Parking: How The Garage Is Undermining Big City Economies

Written by Jesse Miller Posted On Wednesday, 02 September 2015 12:38

If there's one thing big cities have in common it's traffic. It's just the price you to pay for booming development, attractive services, and ample employment opportunities. For the millions of people who live in places like New York, Los Angeles, and the metro areas of San Francisco or Seattle, crowds, traffic, and parking problems are just a normal part of life. But according to at least one in-depth article, the parking issues are more than just an inconvenience, and are causing major, tangible issues with far reaching economic consequences.

Like many cities across the nation, Seattle is in the midst of a housing crisis. Unlike the height of the recession when homes were going underwater due to bad mortgages, this crisis is the result of a steep and climbing cost of living combined with a lack of affordable units. Seattle is already taking aggressive measures to address this issue and spur the development of lower income homes, but the problem remains. Longtime residents are getting priced out of their neighborhoods, and many of the ones arriving to build a better life struggle to afford it.

This phenomena is the darker side of a thriving economy. Cities like Seattle and San Francisco are pleased to be experiencing the benefits of a booming job market thanks to the tech industry and the continued relocation and creation of employment opportunities within their areas. But, as Seattleites and San Franciscans know all too well, the resulting higher housing demand and higher property values that are linked to a population boom result in a much less approachable cost of living.

Half of all Seattle residents pay more than 1/3 of their income on rent making them cost burdened. In San Francisco, which Forbes says is the single worst city for renters, the percentage of cost burdened households is a slightly lower 40%, however residents must contend with a much higher overall price of living.

Steeper home sale prices and rental rates aren't the only growing pains of a strong economy. It also causes headaches like traffic congestion as local roadways become overloaded. It's a simple numbers game. The population of Seattle has increased nearly 10% between 2010 and 2015, and is expected to gain 100,000 new residents over the next 20 years. Like Los Angeles, Seattle is struggling to keep up. More people means more cars, and those cars have to go somewhere; even when they aren't moving.

A lack of car parking is one of the easiest complaints for a city dweller to make. Large population centers just aren't conducive to personal commuter vehicles. Yet in places like Seattle and Los Angeles that lack comprehensive mass transit options, most residents still rely on their vehicles.To accomodate the worsening parking situation in Seattle and in anticipation of continued population growth, developers are building off-street parking into future buildings at a rapid pace. Most view more parking in an increasingly congested city as good news, but it comes at a high price.

Specifically, that price is an astounding $20 to $50 thousand dollars for the construction of a single parking stall. Seattle's high property values means that all the space being purchased for apartment and condo construction comes at a premium. And unlike the space used for living units, developers have a difficult time recouping the costs for the space used up by parking. This causes sales prices for buildings to shoot up which, in turn, causes building owner to hike up the rent.

To make matters worse, these fees are hidden. Tenants likely don't realize a major reason why their rents are higher is to cover the construction costs of parking stalls, and those costs are going to affect them whether they're using those spaces or not. In essence, people who don't own cars are subsidizing those who do.

This is particularly problematic in lower income buildings where a much smaller percentage of occupants own vehicles. Here, large numbers of tenants are paying, in higher rent, for a service they don't use. In an already pricey housing market, new off-street parking is only exasperating the issue.

The economic implications of this are bad enough that the mayor's office in Seattle has responded to it acknowledging that construction of off-street parking in buildings, "Inflate[s] the average size and price of housing units, and prevent some smaller properties from being developed altogether." The solution, however, remains elusive.

Most neighborhoods where new development is taking place demand off-street parking out of fear that existing street parking will otherwise disappear. Meanwhile, Seattle officials only see a rock and a hard place: combat rising housing prices, but anger local communities by regulating off-street parking, or allow the situation to continue which only seems to be placing a strain on the economy.

The only way to approach the situation might be to address the problem at its most basic: the cars themselves. Studies reveal an obvious truth which is that in cities with more available transit options less people drive personal vehicles. In New York City, which is the most walkable city in America according to Walkscore, parking lots and garages are actually decreasing as the population increases.

A parking space is viewed more as a luxury item in the Big Apple, with long term spots in garages going for more $700 dollars a month, or up to a 1 million dollar purchase in luxury buildings. Despite disappearing parking, the situation in NYC is actually tenable because as the population increases, car use is going down not up.

Solving the Seattle problem might involve waning residents off their commuter cars, and it won't be easy. In the vein of Los Angeles, the city is going to have to scramble to double down on building a reliable mass transit system. Also, though requiring developers to ease up on garage construction to help lower rents may cause some friction within communities, there are several ways to go about it.

The city could set up parking benefit districts, similar to community benefit districts where residents in a neighborhood tax themselves for services like street cleaning or security patrols. In this case, the city could charge for curb parking with meters or residential parking permits then give all or a portion of that money back to the community for use at their own discretion. In what is a fascinating conundrum, if parking actually becomes more difficult and Seattle residents start believing there are better ways to get around and make their commutes - as is the case in NYC - demand for parking will go down. Developers will then happily save money on parking construction and building owners will be able to pass those savings on to occupants with lower rent.

The puzzle of local housing markets and city economies is a complex one. Many factors that absolutely shouldn't affect the state of play do, and many likely belligerents that seem like they would don't. One thing is certain, when it comes to vehicles and parking, having less on the road and fewer garages on the block is better for everyone.

Jesse Miller is a Los Angeles based technology and lifestyle writer. He is a current regular contributor to JustRentToOwn on topics ranging from housing markets, city spotlights, and how-to guides for home improvement.
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