How Much Does Existing Street Parking Influence Your Development Strategy?

Question

Curious to hear everyone’s thoughts on this:

If you were developing a property in a neighborhood where most existing homes don’t have dedicated parking, and there is currently unrestricted street parking, would you still provide on-site parking as part of the development?

I’m particularly interested in how investors/developers think about the tradeoff between dedicating site area and construction costs to parking versus using that space for additional living area, landscaping, densification, or other uses.

I realize there may also be zoning or market considerations, but I’m curious how people would approach it from a development and ROI perspective.

Nathan Fisher · Answer

commuter cities need off street parking. Having true parking makes renting astronomically easier.

Mark Updegraff · Answer

@Philippe Kame I wouldn’t assume unrestricted street parking today means that parking will always be available.

I’d approach this with two separate site plans and underwrite both.

First, determine what zoning and approvals actually require. Then compare the incremental value of additional living space or units against the cost and marketability of providing dedicated parking.

I’d also consider what happens after construction. Snow removal, emergency access, accessibility, municipal parking restrictions and neighborhood density can all change how valuable that parking becomes.

Being in Rochester, winter access is something I pay particular attention to. A street that has plenty of available parking in July can be a different animal in February.

The objective isn’t necessarily maximizing units or maximizing parking. It’s maximizing the long-term value of a project that can actually be approved, financed, occupied and operated.

Sometimes eliminating parking makes perfect sense. Other times, the additional space becomes a meaningful competitive advantage.

Brandon Cobb · Answer

on site parking is a function of your exit not of what the street lets you get away with today. If I am selling finished lots to a national builder they have a product spec and that spec includes a driveway and usually a garage. No amount of free street parking in the neighborhood changes what they will pay for a lot that cannot fit their plan.

The thing people miss is that unrestricted street parking is unrestricted untill the neighbors get tired of it. A city can put up no parking signs or go permit only years after you deliver and you have zero control over that. Then you are holding units with no parking in a pocket where parking just got scarce and the comps you are measured against all have driveways.

We looked at a 0.45 acre R6 lot in north Nashville this fall where the engineer's exhibit was a 2 lot replat with 4 HPR units on 25 by 50 pads. On a pad that size every foot you hand to a car comes straight off the house and off the finished price. We passed because our numbers came back about 46k a unit negative at the 300k the seller wanted after he had already cut from 375k. But that pad math is exactly the tradeoff you are asking about and it gets brutal fast when the lot is tight.

Where I would actually spend the site area is one space per unit minimum even if zoning lets you go to zero. A tandem pad or a stacked space off an alley or a shared private drive is a lot cheaper than a garage and gets you most of the appraisal and buyer benefit for a fraction of the cost. Put the rest into living area. Density you cannot finance or sell is not density.

Nick Pavlakis · Answer

Since you don't drive, I'd visit on a weeknight after work and on a weekend evening to see how many spaces are actually open near that property. Then compare nearby rentals with and without off-street parking, looking at similar size and condition. That gives you some local evidence for deciding how much living space to trade.

Xavier Milsoni · Answer

I’d look at what renters in that specific area actually expect. If street parking is easy to find, I’d probably use the space for something that adds more value, unless the lack of parking starts putting people off renting.

Philippe Kame · Answer

Oh wow, thank you for your input! I’m in Detroit, where density is still relatively low, and the neighborhood I’m exploring doesn’t seem to have much competition for street parking. I hadn’t considered snow, though, and I’m curious how residents typically deal with that. I don’t drive myself, so I’ll have to ask around and get a better sense of how parking works for people in the area.

Personally, I’m more inclined to use that space to create more livable square footage, but you make a good point about parking being a significant selling point. It’s a trade-off worth thinking through!

How Much Does Existing Street Parking Influence Your Development Strategy?

How Much Does Existing Street Parking Influence Your Development Strategy?

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