Unaffordable Parking

Off-street mandates

Why is the rent so damn high in New York City? One reason may be mandatory parking requirements for developers.

In the January 2011 issue of the journal Housing Policy Debate, three scholars at the Furman Center for Real Estate and Urban Policy, a research center at New York University, found that developers tend to build only the bare minimum of off-street parking allowed by the zoning code and sometimes go out of their way to get permission to build less. That suggests that the mandatory minimums require more parking—and at approximately $21,000 per New York parking space, more expense—than tenants demand. As a result, housing is less plentiful and more expensive.

The new research may help settle an old question. Donald Shoup, an economist and professor of urban planning at UCLA, has argued for years that minimum parking requirements in cities and towns across the United States are hindering the creation of affordable housing and artificially increasing Americans' dependence on cars. Virtually every city in the United States nonetheless requires developers to build a certain amount of off-street parking, which Shoup has argued is more than they would otherwise choose to provide if parking were left to market forces.

But the complexity of land use regulation made it difficult to test this hypothesis. The first rigorous study of the issue was a working paper posted online last year by scholars at the Pomona College Department of Economics, the University of California Department of Environmental Sciences, and the Universidade Lusofona de Lisboa Department of Economics and Management. They found that throughout Los Angeles County, off-street parking mandates "significantly increase" the amount of land dedicated to parking relative to what developers would have built in the absence of parking minimums. The NYU study indicates that the effect is not limited to Los Angeles.