Parking Reform is Sweeping the Country. Does it Work?

As more U.S. cities eliminate minimum parking requirements as part of an effort to boost housing supply and affordability, a new white paper from the Rutgers Center for Real Estate assesses the impact of parking reforms on residential development, writes Maddy McCarty in BisNow.

According to the paper, “Any reduction in mandated parking requirements for residential developments will lower initial construction costs and decrease ongoing operating costs, which will effectively allow for the reduction of rents.”

McCarty adds that “The Rutgers study found that if the body governing New Jersey’s parking requirements reduced the standard by just a half-car per unit, average rents in the state should fall by nearly 4%, all else holding equal.”

The article highlights examples from around the country, revealing how much money was saved on specific housing projects thanks to reduced parking requirements. A standalone parking structure costs roughly $28,000 per spot, on average. “In Minneapolis, the cost of new studio apartments, previously averaging $1,200 per month, went down to less than $1K per month in complexes where parking minimums were waived.”

Although parking reform isn’t a one-size-fits-all solution—“parking is driven by the demographic and the needs”—the study shows that letting developers build parking based on demand rather than arbitrary requirements can have a significant impact on construction costs and, in many cases, the number of housing units that get built.