RIHA Study Examines Link Between Parking, Real Estate
MBA NewsLink Staff
The Mortgage Bankers Association's Research Institute for Housing America released a new report that examines one of the most basic trends in real estate: land use. Specifically, parking.
The study, Quantified Parking: Comprehensive Parking Inventories for Five Major U.S. Cities, authored by Eric Scharnhorst, Principal Data Scientist with Parkingmill, "reveals an investment in parking that is out of balance with the current demand for parking in almost all cases, and even less in tune with what appears to be declining future demand."
The study examines parking inventories in five cities: New York; Philadelphia; Seattle; Des Moines, Iowa; and Jackson, Wyo. Scharnhorst said a "surprising" element noted, particularly in Seattle, is that as land increases in price and surface parking begins to dissolve, the amount of parking in an area may paradoxically increase as parking spaces take shelter in new buildings.
"Today's empty parking spaces can be seen as a land bank in some of the most convenient city locations, or, taken another way, a future is arriving where builders will be able to provide more of everything else and fewer parking spaces," Scharnhorst said.
"The foundations of the real estate finance industry are, both literally and figuratively, built on the use of a finite amount of space," said Mike Fratantoni, MBA Chief Economists and Trust Administrator for RIHA. "This report gives us a window into land-use trends that are sure to intensify in the coming decades."
The study notes comprehensive parking inventories have never existed for U.S. cities. Because of this, many parking-related questions have never been answered. This uncertainty--not knowing how much parking there is near a site or in a city--is the motivation for this report.
"This is not merely scientifically interesting, it also has great practical significance for planners, property developers, investors and lenders," Scharnhorst wrote. "It uncovers an opportunity to build more efficient cities that contain fewer unused parking spaces and more of everything else."
The study notes three key trends:
--Transportation preferences are changing, especially in urban areas, and a smaller share of Americans drive today than in the recent past.
--Policymakers are starting to relax their parking minimums and in some cases replace them with parking maximums.
--Datasets related to parking are becoming more accessible.
"Exhaustive high-resolution parking inventories can identify parking shortages, and expose parking surpluses," Scharnhorst said. "These inventories can support developers who cannot afford to build extra parking at the expense of the other parts of their projects, or policymakers who are ready to relax minimum parking requirements for new construction, or who are concerned about spending public works money on free parking."
Either way, the study says, future developments should provide fewer parking spaces than past developments.
The selected cities reveal some unusual statistics. Parking spaces outnumber homes 27 to one in Jackson. Seattle's population density of 13 people per acre is less than half its parking density of 29 parking stalls per acre. Philadelphia's parking density is 3.7 times greater than that of homes. Des Moines has 83,141 households and 1.6 million parking spaces. New York is the only city in the study with more homes than parking, an outcome partially explained by the greater provision of public transit.
The MBA Research Institute for Housing America is a 501(c)(3) trust fund. RIHA's chief purpose is to encourage and assist--through grants to distinguished scholars and subject matter experts, educational institutions, research facilities and government organizations--establishment of a broader based knowledge of mortgage banking and real estate finance. For more information, visit the RIHA website: http://www.housingamerica.org.