Minimum parking requirements and housing affordability in New York City

Abstract

Many cities throughout the United States require developers of new residential construction to provide a minimum number of accompanying off-street parking spaces. However, critics argue that these requirements increase housing costs by bundling an oversupply of parking with new housing and by reducing the number of units developers could otherwise fit on a given lot. Furthermore, the requirements reduce the subsequent direct costs of car ownership by forcing up-front, or subsidizing, consumption of parking spaces, which leads to increases in auto-use and its related externalities. Such critics advocate eliminating or at least reducing the requirements to be more responsive to locational context, particularly proximity to transit. In this article, we explore the theoretical objections to minimum parking requirements and the limited empirical literature. We then use lot-level data and GIS to analyze parking requirements in New York City to determine to what extent they are already effectively sensitive to transit proximity. Finally, we examine developer response to parking requirements by comparing the number of spaces that are actually built to the number required by applicable zoning law. Our results indicate that the per-unit parking requirement in New York is, on average, lower in areas near rail transit stations, but the required number of spaces per square foot of lot area is higher, on average, in transit accessible areas. We also find that by and large, developers tend to build only the bare minimum of parking required by zoning, suggesting that the minimum parking requirements are binding for developers, as argued by critics, and that developers do not simply build parking out of perceived marked need. Our results raise the possibility that even in cities with complex and tailored parking requirements, there is room to tie the requirements more closely to contextual factors. Further, such changes are likely to result in fewer parking spaces from residential developers.

Keywords:

• minimum parking requirements
• zoning
• affordability

Notes

¹Defining or identifying “excessive” parking requirements is outside the scope of this article. The simplest cases are those that produce parking spaces that are rarely, if ever, used. More difficult is evaluating the costs and benefits of those residential spaces that would not be built without the mandate of parking requirements, but which contribute to a total residential parking supply minimally necessary to accommodate demand at some acceptable level of service.

²Unsurprisingly, costs are higher in New York: Rowland (2010) estimates that developers of above-ground structured parking face a construction cost of $21,131 per off-street space, translating to $63.44 per square foot. These are the highest costs in the United States, discussed in more detail below.

³A “teardown sale” occurs when a buyer purchases a property intending to demolish the existing structure and rebuild. Given this, the value of the land can be estimated as the purchase price of teardown properties plus the costs of demolition.

⁴All figures are in 2007 dollars.

⁵Public housing developed and managed by the New York City Housing Authority receives a reduction of 50–70 percent. The final two categories (certain federally subsidized projects approved before 1974 and buildings that were rehabilitated through the City's 10 year plan for reconstructing in rem buildings and vacant lots) received reductions similar to the publicly assisted housing category, but are no longer relevant to any new development.

⁶In late 2009, the City began making available certain data about parking facilities licensed by the Department of Consumer Affairs. We are still exploring future uses of this data in analyzing the effects of residential parking requirements, future research will explore these relationships. The City also has no publicly available data on the number of on-street parking spaces, despite the City's Climate Protection Act (2007) which requires the New York City Department of Transportation (NYCDOT) to provide on-street parking information for every block in the City (Council for the City of New York 2007).

⁷All zoning codes up to R5 (with the exception of R4 Infill) have a maximum permitted floor area ratio below 1; approximately 56 percent of all residentially zoned lots in 2003 were zoned with a maximum FAR of 1 or less.

⁸Available at: http://www.nyc.gov/dcp.

⁹Available at: http://www.nyc.gov/html/dob/html/bis/bis.shtml.

¹⁰ http://www.nyc.gov/html/dcp/html/hudson_yards_parking/index.shtml (accessed 2 July 2010).