Downtown Los Angeles. CC image from Nadia Kovacs.

The paper of the day, from Michael Manville: “Parking requirements as a barrier to housing development: regulation and reform in Los Angeles”

Abstract: Using a partial deregulation of residential parking in downtown Los Angeles, I examine the impact of minimum parking requirements on housing development. I find that when parking requirements are removed, developers provide more housing and less parking, and also that developers provide different types of housing: housing in older buildings, in previously disinvested areas, and housing marketed toward non-drivers. This latter category of housing tends to sell for less than housing with parking spaces. The research also highlights the importance of removing not just quantity mandates but locational mandates as well. Developers in dense inner cities are often willing to provide parking, but ordinances that require parking to be on the same site as housing can be prohibitively expensive.

Background: Los Angeles had a lot of underutilized office buildings that were not competitive in the office market any longer. The city passed an adaptive reuse ordinance to encourage the re-use of these buildings by offering flexibility on zoning requirements, including use and parking.

The paper shows how developers for these conversions, given flexibility from the code by right, to build less parking than would otherwise be required (new construction in the area is still subject to the parking requirements of the code).  But, unlike the cases in Portland, all of the developers still provided some parking – this is Los Angeles after all (and yet another case for letting the market prevail based on local and regional conditions).

The second key area of flexibility is in parking location – developers wishing to re-use properties downtown could provide parking for tenants off-site, often allowing for shared use parking in under-utilized office garages nearby. Traditional requirements not only arbitrarily set the level of parking to be built, but also demand it be provided on site, even if off-site options may be more feasible and cost-effective.

In terms of the housing stock, this code flexibility allowed developers more flexibility in their target market. Those targeting the higher end provided more parking, but the lack of a hard requirement allows devleopers flexibility in which markets they target.  Parking has a great market value, of course, so the units built with fewer or no parking spaces would rent for a lower price, allowing the market to create a wider range of products.

The end result is more housing, a wider range of housing price points, a smaller supply of off-street parking spaces, and re-use of under-utilized buildings.

While this paper focuses on LA’s adaptive re-use ordinance, the same pricinples apply to zoning and parking requirements in general.