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An Unintended Consequence of Unbundling Parking from Housing

Transportation and affordable housing advocates advocate unbundling parking from housing to provide an incentive to own fewer vehicles while reducing housing costs and increasing supply. But should parcel taxes be applied to parking spaces?
November 17, 2014, 5am PST | Irvin Dawid
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San Francisco Chronicle metro columnist C.W. Nevius writes about a surprise bill an unsuspecting San Francisco schoolteacher living in an affordable one bedroom condo (purchased through "the city’s Inclusionary Housing Below Market Rate Ownership Program") received: not one but two school district parcel taxes, each for $259. His parking space was billed as well as his condo.

Since the parking spot was sold separately it has its own deed, which is now a common practice among developers. That means he is considered to have two parcels.

Is it "unfair taxation" as Nevius claims? After all, if homeowners knew that they would have to pay an additional parcel tax on their parking space(s), would it not provide further incentive to own fewer vehicles? In addition, parcels devoted to parking could have been used to provide sorely needed new housing in the City by the Bay.

Or is Nevius on to something? According to an earlier post, "Unbundling Parking Costs to Keep Families in Cities," the practice itself, rather than whether one chooses to rent or own a parking space (and pay separately for it) is what advocates want.

While the homeowner was unable to get an exemption from the school district for paying the parcel tax on his parking space, Nevius points to a precedent set by City College of San Francisco that refunded the parking space parcel tax after a new financial officer determined that "the double dip was unfair".

From Smart Growth America's "Smarter parking codes to promote smart growth" (summarized here):

“Unbundling” purchase of housing units from purchase of car parking: Private vehicle parking spaces must be priced and sold separately from the rental or purchase of dwelling units. This lets the household decide if they would like to take on the expense of a parking space, as opposed to that parking cost automatically being bundled into the lease or sale price.

This makes housing more affordable because households can opt to forgo the cost of a parking space if they don’t need it. This policy works particularly well when the multi-family building is near transit or in a place where owning a car is not as critical to quality of life.

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Published on Friday, November 14, 2014 in San Francisco Chronicle
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