Eliminating parking requirements for Metro Vancouver developments could increase affordability: report

An underground parking area is seen in this undated stock image. (Shutterstock.com)

Building a parking stall in a Metro Vancouver real estate development can cost as much as $230,000, and many spots are sitting empty in buildings across the region, according to a new report.

The regional district researched what is available and how much it costs to construct as part its move to revise the regional parking strategy – coming up with findings that support the elimination of minimum parking requirements.

"The research reveals that off-street residential parking remains heavily oversupplied from a usage standpoint," the report says.

On average, parking is oversupplied by 47 per cent in strata buildings and 35 per cent in market rental buildings. The report did not include information about the minimum price of a parking stall but noted that the cost of underground parking in particular goes up based on the conditions of a site.

"Parking costs are significant and can exceed $200,000 per stall when geotechnical challenges, such as poor soil conditions or high-water tables, are present."

Vancouver city councillors voted to eliminate minimum parking requirements last year, and the provincial government introduced legislation that saw them scrapped in designated "transit-oriented" areas.

Doing away with minimums does not, the report points out, place any limits on how much parking can be built.

"However, this step is critical in avoiding arbitrary oversupply, i.e. supply mandated by regulation," it reads.

Parking requirements and housing affordability

In a region with notoriously high housing costs and ever-climbing homeless counts, the report also sheds some light on the relationship between parking requirements and affordability. It finds, broadly speaking, that "more parking does increase the cost of housing."

Prof. Tom Davidoff, at UBC's Sauder School of Business, explains how changes to parking requirements could impact affordability – stressing that lower construction costs do not automatically or necessarily drive down prices.

"People are willing to pay what they're willing to pay. The price comes from the number of housing units demanded versus the number of housing units supplied," Davidoff says.

Still, a unit with a parking spot is generally more expensive than one without one. The report found adding 1.2 units of parking per unit to a building requires a buyer to have an additional $35,000 in household income, on average, in order to qualify for the mortgage.

"You create more luxurious housing when you add parking. For most people, it's a more valuable housing unit with a parking lot, so that increases price," Davidoff says.

Even if eliminating parking means commercial developers save a significant amount on construction, those savings are not passed on directly to buyers or renters.

"Once they've built the project, all they want to do is maximize profit," Davidoff says.

And profit margins are impacted by building costs.

"When you scare off development by doing things like making people dig expensive parking spaces, it makes it less profitable to build," Davidoff says. "There's less built, and that leads to a supply shortage."

In the non-profit sector, on the other hand, construction costs do have a fairly straightforward relationship to prices and affordability.

"Development calculations are entirely different for non-profit developers whose primary goal is reducing end-user costs," the report says.

"For these developers, providing less (or no) parking drives significantly greater affordability, as savings are passed along to end-users in the form of lower rent, or can be used to deliver even more affordable units or projects."

Discouraging driving, car ownership

Another goal of an updated parking strategy is to "reduce the number of vehicles," according to the report.

As Davidoff points out, a discussion about residential parking requirements is part of a broader discussion and debate about driving and its impact on communities and the climate.

"Driving is worse than transit socially because it causes traffic gridlock, and it's bad for the environment. So discouraging people from driving is good in that way, and the fewer parking spaces there are, the less people will want to drive," he says, explaining the argument for reducing driving.

Reduced off-street parking can, he says, increase demand for on-street parking, as well as its cost – which Davidoff thinks is a good thing because it increases revenue and discourages car ownership.

"There's a lot of value to street space. Parking spaces could be bike lanes or could be plantings or all kinds of valuable stuff. Street space is valuable, and it should be treated as such," he says.

Davidoff acknowledges that reducing off-street parking and creating more demand for on-street parking is often met with vocal criticism. Using the example of city council hearings about new developments to illustrate the point, he says "one of the first things people will scream about is parking."

Admittedly, Davidoff has a strong opinion on the matter and comes at the issue from the perspective of someone who commutes by bicycle and has "contempt for car travel."

There are people with equally strong opinions who require cars because they actually can’t commute by cycling, walking or taking transit and for whom access to parking is crucial.

Nevertheless, Davidoff says there is generally an economic consensus that "the net impact of extra driving is negative" and that the report from Metro Vancouver shows there is not a sound economic – or even practical – argument for mandating a minimum number of parking spots in new developments.