Unused parking adds over $2M to typical multifamily projects | Dump Trucks Charlotte NC

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Columbus Ohio Dump Truck Company Brief:

• Renter-occupied households use fewer parking spaces than new multifamily developments are required to have by state law, based on a study of 175 New Jersey properties by the Rutgers Center for Real Estate at Rutgers University in New Brunswick, New Jersey.
• A new white paper from the center, co-authored with industry professionals from AvalonBay and Tantum Real Estate, proposes new parking ratio standards that better align with usage. 
• The RCRE recommended, on average, 1.41 parking spaces in new lots or garages per unit for garden-style apartments — down from an average of 1.91 mandated by New Jersey’s Residential Site Improvement Standards, a difference of over half a space. As for high-rises, the study recommends 1.01 spaces per unit on average, down from 1.33 required per unit.

Dump Trucks Columbus OH Insight:

The study, which gathered information on parking usage at 28,000 units total, found renters used 1.60 spaces per unit on average at garden-style properties and 1.08 per unit on average at high-rises. Both of these usage ratios are well below New Jersey state requirements. 

Reducing the required number of parking spaces would reduce construction and operating costs, which would lead to lower rents, the paper concludes. Less parking would also reduce the property’s environmental impact, whether by urban heat island creation, altered stormwater runoff or emissions from concrete production. 

In recent years, many municipalities have reduced their multifamily parking requirements, which are designed to ensure enough space for vehicles as developers create new housing. Some, including San Jose, California and Bend, Oregon, have eliminated them altogether, and New York City has recently proposed doing so as well. Reducing construction and land costs and creating opportunities for affordable housing are some of the major reasons cities are taking this step. 

New Jersey standards mandate a specific number of parking spaces per unit based on unit size and on building type, with high-rises requiring a lower parking density than garden-style properties. 

In two hypothetical examples created for the study, a 145-unit garden-style apartment property would require 274 parking spaces under current RSIS requirements, while a 400-unit high-rise would require 399 spaces. The RCRE estimates would lower those numbers to 172 and 324 spaces, respectively. 

Other considerations

While the RSIS calculation considers property size in its parking calculations, it does not consider other factors that influence parking needs. Areas with elevated density, such as urban centers, usually have well-developed access to public transit, alternative transportation methods like walking or biking and amenities located nearby, the report says. With these resources at hand, residents are less likely to rely on a personal vehicle.

Areas with lower population density, on the other hand, may have fewer transit options available, or resources and amenities located farther away from their homes. In this case, residents are more likely to own and keep cars on the property. The report recommends that policymakers consider allowing reduced parking ratios in higher-density areas.

If each parking space costs $27,900 on average to build, as suggested by data cited in the study, and parking is overbuilt by 0.5 spaces per unit on average, then current parking requirements would increase construction costs by approximately $13,950 per unit, according to the report. This would result in an extra $2.8 million in construction costs for the hypothetical garden-style property and $2.1 million for the hypothetical high-rise. This, according to the report, translates into an $80 per month premium on rental costs. 

“Average rents in New Jersey for units built after 2010 are approximately $2,200 per month,” the report says. “If RSIS were to reduce parking requirements by about 0.5 cars per unit on average, such that new parking requirements were in line with the parking data as concluded by this study, then average rents in New Jersey should be expected to fall by nearly 4% per unit, all else held equal.”