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Multifamily Developers Find Less Space For Parking. Here’s What It Might Mean For Pricing.

Apartment developers on new projects are often building less parking at their projects than the old standard of two spaces per apartment.

Developers can often save millions of dollars if they build fewer parking spaces. But they also risk losing potential residents if they fail to build enough parking spaces to satisfy their residents. The stakes are high. Any lost income from losing tenants could into the eventual sale price. Meanwhile, a development with too much parking will have a lower yield than it could have, because the developers built empty parking spaces that don’t earn any money.

“We see the parking demand only further decreasing in the future,” says Michael Smith, design director for Humphreys & Partners Architects. “With things like Uber’s air taxis on the near horizon, the demand for cars will be even further reduced.”

A typical garden apartment property in a commuter suburb now tends to need  about one parking space per one-bedroom apartment and two for a two-or-more-bedroom unit, says Manny Gonzalez, principal for KTGY Architecture + Planning.

However, outdated building codes in many jurisdictions often require as many as two spaces for every unit, regardless of the number of bedrooms. “It is not only a waste of money, but of valuable space as well,” says Smith.

To comply, a suburban, garden apartment development with 250 units would have to include 500 parking spaces—even though it might only need 400 spaces. “The savings on not building those 100 extra surface parking spaces could be on the order of $250,000,” says Smith. This suburban property could also provide much more greenspace if its developer didn’t have to build those 100 surface parking spaces, says Smith.

Apartment properties can often get by with even fewer parking spaces if they are located in urban areas where residents can get to shopping, amenities or public transit without getting into a car. “There have been some successful urban projects that provide no parking at all,” says Gonzalez. Some cities like San Jose will cap your parking count at 1.5 per dwelling unit or less if you are in close proximity to transit.

“You will probably find enough Millennials to fill a community if it is in a cool, walk-able location or part of a transit oriented community,” says Gonzalez.

The cost of building parking spaces is also much higher in many urban areas, where land is often too valuable to use as a simple, surface parking lot. To stack multiple levels of parking and living spaces, developers typically have to use much more expensive concrete construction.


Source:  NREI

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