California Takes on the High Cost of Mandated Parking

California's cities require developers to include a minimum number of parking spaces in their projects, regardless of whether those spaces are in demand. A state bill would change that.

When the La Valentina Station Project in Sacramento, California, was working its way through the approval process in 2009, it seemed like a perfect development for the city's downtown. Domus Development and the city's housing agency were together planning to turn a vacant, blighted lot into a mixed-use building with 81 below-market-rate units and commercial space on the ground floor.

One major snag was the city's requirement that the project include over two spaces of parking for each new unit of housing it added.

"It would have required ridiculous amounts of underground parking, and it was already a tight site and contaminated, so you couldn't actually build that parking," says Meea Kang, president of Domus at the time. "We were also 30 seconds from the nearest light rail station."

After multiple hearings and rounds of review before the planning commission and City Council, the La Valentina project was able to obtain 18 special permits and variances—including one giving it relief from the city's parking requirements.

It was hardly the only project to have to contend with these rules.

California's cities, like almost everywhere else in the country, require that new developments come with a certain amount of parking spaces. New apartment buildings must have a minimum number of spaces per unit. New stores must have a minimum number of spaces per square footage.

Meeting these parking minimums can impose a lot of costs on developers, as well as the end users of their buildings. The more land on a property that's eaten up by parking spaces means less land that's available for rent-generating homes, businesses, and office space. Meeting parking minimums often requires either the construction of an underground or above-ground parking garage—which is expensive.

A structured parking space can cost north of $75,000, says Kang. Those costs get passed on to the residents of new apartment buildings and the commercial tenants of new shopfronts. As with many government mandates, parking minimums often require developers to build more parking spaces than people will actually use.

"Two weeks of the year that parking lot is utilized to the full extent. 50 weeks of the year it's not," Eddie McCoven, a spokesperson for San Diego's Clairemont Lutheran Church, told Reason back in 2020.

His congregation's plans in 2015 to redevelop a portion of the church's parking lot into an affordable housing complex were upended by the city's regulations that fixed a ratio of required parking spaces to square inches of pew space.

For some cities, stopping new housing has become the whole point of parking minimums, says Matthew Lewis, communications director for housing advocacy group California YIMBY.

"The challenge is cities have used parking as a cudgel for their NIMBYism. It literally blocks housing," Lewis tells Reason. He says the impact of these mandates falls particularly hard on developers of below-market-rate projects (which have to spend their fixed amount of subsidized funding on parking instead of more housing units) and smaller apartment projects that could fit on smaller lots but for parking requirements.

But change is in the air.

In recent years, some cities around the state have started to whittle down their parking requirements. In response to the Clairemont episode, San Diego abolished its parking space–pew space ratio and lowered parking minimums for churches overall as part of wider parking reforms. Sacramento committed to eliminating parking minimums citywide last year.

And yesterday, the California Senate passed A.B. 2097, a sweeping bill introduced by Assemblymember Laura Friedman (D–Glendale) that generally forbids cities from imposing parking minimums on any development, commercial or residential, within a half-mile of a public transit stop.

Cities would have to prove that an individual project would have a "substantially negative impact" on its parking needs before it could reimpose a parking minimum. But they couldn't impose those parking minimums on a programmatic basis. Smaller apartment buildings and projects with a certain percentage of affordable units near transit would be completely exempt from parking minimums too.

Not having to ask city governments to waive parking requirements for individual projects would give developers a lot more certainty about what they're allowed to build too, says Kang, who as a director of the Council of Infill Builders, has advocated for A.B. 2097.

"When we go in front of a discretionary body like a planning commission or a city council [to request an exemption from parking requirements], there is always the risk of being turned down. The developer plays a calculated risk," she tells Reason. Cities would also lose their ability to extract costly community benefit payments from developers.

Having passed the state Senate, A.B. 2097 now goes back to the Assembly (where it's already passed once) for final legislative approval. It will still need to be signed by Gov. Gavin Newsom to become law.

How impactful will the reform be?

Minneapolis is one test case. It eliminated parking minimums citywide as part of an update to its general plan in 2018. Crucially, the city also increased the maximum allowable size of apartments near transit and along commercial corridors at the same time. (The city also imposed some very unlibertarian parking maximums in some areas.)

The combination of those two reforms has kicked off a small boom in the construction of smaller apartment buildings, with most of those projects being built with less parking than had been typically required under the old rules.