How Flexible Parking Requirements Spur Economic Development

It’s hard to imagine today, but Santa Monica’s commercial areas – now home to Silicon Beach, tourism and bustling retail – were sleepy, underperforming and shabby just a few decades ago. In an effort to revive its commercial heart in particular, the city approved millions in funding for municipal parking structures in the heart of downtown and implemented new, more flexible parking requirements.

The flexible parking requirements gave developers the ability to opt out of providing the required on-site parking by paying an annual fee of $1.50 per square foot of floor area added for which there was no parking provided. Further, it allowed for intensifying the use in a given building without having to provide the additional parking that would otherwise be required.

A study by UCLA urban planning graduate student Carter Rubin and Professor Don Shoup found that a group of parcels subject to the flexible requirements produces eight times more sales tax revenue per parcel square foot than a similar group of parcels just outside this flexible parking district. Further, significantly more street frontage on the flexible-requirement side has active uses, and much less area dedicated to dead parking space.