Why parking minimums are holding back housing

Parking may seem to be a minor detail in housing policy, but minimum parking requirements significantly contribute to increased construction costs and limiting housing availability. These regulations require developers to provide a specific number of parking spaces for each new housing unit, often based on broad criteria rather than an analysis of each project. This raises costs for builders and can make it harder to allocate space for infrastructure that supports other transportation options, such as bike racks, bus stops, or pedestrian-friendly pathways, reducing the variety of development types and contributing to higher greenhouse gas emissions.

Local governments set parking space minimums or specific requirements in ordinances or when approving specific projects. They are largely based on manuals and guidance from the Institute of Transportation Engineers, which provide general rules of thumb for how many trips can be expected for a given use of land and how many parking spaces are needed to accommodate those expected trips. In the United States, parking takes up a significant amount of land, often placing greater importance on cars than on people. About 5% of urban land in the US is taken up by parking, and in Los Angeles, for example, the average square footage devoted to parking per car (3.3 spaces) is more than the average square footage of home per person.

The Institute for Transportation and Development Policy reports that parking minimums contribute to inefficient land use and higher infrastructure costs. What appears to be “free” parking for consumers is anything but—its costs are hidden within the price of apartment and condo buildings. Developers absorb these expenses upfront but ultimately pass them on to renters and buyers through higher residential rents and home prices, further exacerbating the housing affordability crisis.

This problem is especially burdensome for lower-income households, which often own fewer vehicles but are disproportionately affected by parking-related costs. Requiring one parking space for an apartment can raise rents by approximately 6% of the annual budget for households in the lowest income quintile, and two spaces can account for as much as 12% of their budget. Many of these households do not own vehicles, but minimum parking requirements mean there is no option to rent an apartment without parking, so it is particularly regressive and unfair.

These requirements highlight the inefficiency of mandating parking requirements that may not align with actual housing and transportation needs. While parking minimums do vary based on apartment size—typically requiring more spaces for larger units—they still impose rigid mandates on developers, regardless of whether that level of parking is necessary. This approach fails to account for the fact that some buildings may be designed for residents who rely on biking, public transit, or shared mobility options. By tying parking requirements solely to the number of bedrooms rather than actual demand, these rules stifle flexibility in housing development, increasing costs and limiting innovative, more affordable solutions. When cities or counties impose the same parking standards across diverse neighborhoods and communities, they overlook each area’s different transportation needs and housing demands. This approach stifles creativity and innovation in housing development, preventing more efficient and affordable solutions from happening.

Parking minimums place a heavy financial burden on the housing market. Donald Shoup, a prominent urban planning researcher and author of The High Cost of Free Parking, has extensively studied the economic impact of parking mandates. Shoup found that required off-street parking increases construction costs by an average of 53% for underground parking and 37% for above-ground parking. These significant cost increases make it harder to construct affordable housing, particularly in areas with high land prices. Beyond direct construction costs, excessive parking requirements contribute to a staggering amount of underutilized land. A study on parking inventories in major U.S. cities found that Seattle’s parking infrastructure alone is valued at $35.8 billion—roughly $118,000 per household—while Jackson, Mississippi, has a per-household parking cost burden of $192,000. Compared to cities like New York, where parking per household is valued at just $6,570, these figures highlight how some cities have prioritized parking over efficient land use. This dynamic drives up the overall cost of housing, limits the availability of affordable options for residents, and reinforces inefficient urban development patterns that make housing less accessible.

The advantages are evident in cities that have reduced or eliminated parking minimums. Developers gain greater flexibility in designing housing that meets actual market demand rather than arbitrary regulations. In Buffalo, New York, after eliminating parking minimums in 2017 through its Green Code, mixed-use developments included less than half the parking spaces that would have been required under previous mandates, allowing for more efficient land use and lower construction costs​. Researchers found that 68% of new homes permitted in Buffalo since the Green Code was implemented would have been illegal under the previous zoning code​, demonstrating that eliminating parking minimums allowed for housing that otherwise could not have been built. Similarly, Minneapolis saw a 20% decline in adjusted rents since 2017 after eliminating single-family zoning and parking mandates, making it one of the few major U.S. cities where housing affordability improved​. These reforms demonstrate that reducing regulatory barriers results in denser housing developments, lower development costs, and increased housing availability, all of which contribute to making cities more livable and affordable.

Recent legislative efforts, such as the “People Over Parking Act” introduced by Congressman Robert Garcia in 2023, aim to eliminate outdated parking minimum requirements for new affordable housing and other developments. This would make integrating affordable housing projects with transit services easier. Congressman Garcia emphasized that eliminating parking requirements reduces costs, makes it easier to use public transit, and replaces heat-island blacktops with green spaces that improve stormwater management. Since transit systems across the US are struggling to regain riders lost during the pandemic, better approaches to public transit and removing impediments to accessing transit are important. Studies from cities like Seattle, Buffalo, and San Diego further support this approach, showing that parking reforms lead to cost savings for developers, increased proposals for affordable housing, and the creation of mixed-use projects.

Momentum for parking minimum reforms has grown so much that even smaller towns across the United States are joining the movement. Organizations like Strong Towns and the Parking Reform Network, a coalition of planning professionals, have tracked cities and towns in North America implementing or proposing parking reforms, whether citywide or in specific districts such as downtown areas. In California, Governor Gavin Newsom recently signed a law prohibiting local governments from mandating parking spaces for developments within half a mile of public transit stops. This has the virtue of allowing builders of projects near transit to evaluate how many parking spaces their customers are likely to want.

The financial and environmental costs of parking are also staggering. A Victoria Transport Policy Institute study estimates that annualized parking space costs range from about $600 for a basic surface lot on inexpensive land to more than $5,000 for high-amenity structured parking in central business districts. Parking also has a significant environmental impact. Constructing and maintaining parking facilities consumes large amounts of energy and materials, such as asphalt and concrete, which are energy-intensive to produce.

To tackle these challenges, policymakers should implement reforms to parking minimums. Firstly, minimum parking requirements at both the municipal and state levels should be eliminated. This modification enables developers to decide the amount of parking to provide based on actual demand. This market-based approach reduces unnecessary construction costs and creates flexibility for innovative housing solutions. Additionally, older buildings should be exempt from parking minimums to encourage adaptive reuse, including using some existing parking space for other things, if that makes it easier for businesses and housing developments to flourish without exorbitant retrofit expenses. At the same time, setting clear rules for determining when a property owner is using the land or building in a way that is creating spillover problems to neighboring properties with penalties for creating such spillovers will prevent developers from providing too little parking.

Revisiting parking minimums is an essential step in addressing the housing crisis. By eliminating these outdated requirements, we can lower construction costs, increase housing supply, and create communities that prioritize people over cars. Cooperating with developers to integrate affordable housing with transit networks reduces some parking needs and is easier to do without parking minimums. We need to acknowledge that parking’s hidden costs hinder housing affordability and take concrete steps to reform outdated policies that do not meet modern housing needs.

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