Saturday, November 27

Using Valuable Downtown Land for Parking Doesn’t Block During a Housing Crisis

By Timothy Welch ** of The conversation

The conversation

Analysis – When I first moved to New Zealand, even after living in some of America’s highest priced real estate markets, I was surprised by house prices. My shock was reinforced by the condition of the houses, many of which lack sufficient insulation, adequate heating or cooling, or double-glazed windows.

Car parking lot seen from above, bird's eye view

Photo: 123RF

I wondered why I would pay so much for a house that needed so much attention. Then I heard someone joke: “In New Zealand, you pay for the land and the house is free.” Suddenly things made a lot more sense.

Unlike in the US, where land is valued at a small fraction of the “improvements” (the building that is in the section), in New Zealand it is the exact opposite.

But it also raised a big question: in a country where the cost of land is so exorbitantly high and the supply of housing so scarce, how could there be so many surface car parks?

The price of parking

Take Auckland, for example, possibly the most limited market for housing in New Zealand. Specifically, Wynyard Quarter, still under development, on the downtown waterfront, makes a clear case of car parking over potential homes.

One of the plentiful surface parking lots is located on Jellicoe Street. It covers 8,146 square meters of tar, paint and parked cars. The huge lot is valued at NZ $ 37 million, with the improvements valued at $ 1 million, presumably all that pavement and paint.

The next part is a bit more difficult to swallow. The land is valued at just over $ 4,500 per square meter. Given that the average parking space occupies 15 square meters, that means that each space is worth around $ 68,000.

That’s just for the parking spots themselves, not all the required terrain for people to get in and out of and around the parking lot.

What you earn for parking

Now things get interesting. The Jellicoe Street parking lot is maintained by Auckland Transport, which gives people driving to the CBD the courtesy of an initial hour of free parking followed by a $ 6 per hour fee.

So for just $ 18, drivers can park for four hours. On the weekend, those four hours of parking will cost just $ 6.

Assuming a parking space is fully occupied during all operating hours (7 a.m. to 10 p.m. Monday through Sunday), it could optimistically raise $ 480. Extended for an entire year, a single slot can earn just under $ 25,000.

Ignoring overhead costs and more realistic occupancy rates, it would take nearly three years for a single outdoor parking space to recoup the cost of the land it sits on. Perhaps this sounds economically viable. But what is not in this equation is the very high real cost of cheap and abundant parking.

Parking expectations

The wide availability of low-cost parking in high-demand locations has a significant impact on our cities. When people expect parking to be available in these places, they often choose to drive rather than use a more sustainable mode such as public transport. This means that people buy more cars and take more trips in personal vehicles.

When cheap parking spots fill up during peak hours, people tend to look for a parking spot rather than looking for slightly more expensive and less convenient alternative spots. That is, they circle a parking lot or city block until someone else leaves. When enough drivers do this, it creates more congestion, pollution, and greenhouse gas emissions.

The long-term availability of inexpensive urban parking also implies that parking in such places is a public good. People expect parking to always be in these places and they will fight to keep the land from being used for higher and better purposes.

This is where the rubber hits the road. Outdoor parking is the least productive use of major urban land. In the midst of the biggest housing affordability crisis in perhaps a generation, we could lose some of this car space in favor of apartments.

People before parking

According to the Auckland District Plan, a one bedroom / one bathroom apartment should occupy about 45 square meters, exactly three parking spaces.

The good thing about an apartment building compared to an outdoor parking lot is that we can build it. Instead of about 200 car spaces, we can build more than 600 apartments on ten floors.

Instead of storing a couple hundred cars for part of the day, with bare sidewalks at night, we could provide living space for up to 1,200 people throughout the day.

We could do the same with the parking lot across the street and the one down the block and so on, until we are a city and a country that focuses more on housing people than parking cars.

It will be difficult to let go of the car parks. Where some see an opportunity for urban regeneration through the development of underutilized space, others see the loss of car parking as another impediment that city workers must overcome.

But we simply have too much space in our cities dedicated to the automobile. Our land is too valuable to pave. It’s time to use a fraction of that space to house a lot of people instead of a few machines.

* Timothy Welch is Senior Lecturer in Urban Planning at the University of Auckland.

**Timothy Welch does not work, consult, own stock, or receive funds from any company or organization that benefits from this article, and has disclosed no relevant affiliations beyond his academic position.

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