For those of you plugged into the world of parking (huge show of hands!), you may have noticed a significant shift in the attitude toward parking in cities across the country. For the rest of us, you may just be feeling the effects of the changes.

Hundreds of municipalities and two states have begun moving away from their current (and, quite frankly, often rigid and inconsistent) off-street parking regulations. The positive? It's doing a great job at solving some problems. But like anything, there is a tradeoff. And these regulations also present new challenges for multifamily.

So let's get into those challenges!

The Backstory: Parking Regulations Impact Land Use

The U.S. has had to deal with long-standing issues related to land use, sprawl and the significant financial impact on multifamily residents and developers. Regulations for parking minimums were void of consistency, forcing developers to deal with multiple differing regulations for similar buildings within the same state. This mess eventually began to take its toll and many began realizing the need to prioritize people over parking and reverse course on parking regulations.

The first city to embrace change was Buffalo, N.Y., which abolished parking minimums back in 2017 and was soon followed by Minneapolis and San Jose. This new attitude began to snowball and seven years later a whopping 200 cities, including Austin, New York City, Milwaukee, and Dallas, have already eliminated parking minimums or are actively exploring or implementing parking reform. California became the first state to address the issue by relaxing its standards for development near public transit routes in 2023, and Colorado recently eliminated minimums statewide for areas near public transportation.

The trend of eliminating parking minimums is a significant shift in how cities approach land use, mobility and housing affordability. By prioritizing people over cars, these changes hold the promise of creating more inclusive, livable and environmentally friendly urban spaces. It encourages alternative transportation methods, contributing to reduced emissions and healthier, more active communities. Where this fails is when a neighborhood does not have ample transportation options (not every city can be Manhattan!).

Units May Increase, But Where Do These Residents Park?

Reduction of these minimums is favorable to developers. Parking fees aren't what the bank looks for when underwriting a property, after all! And regulatory barriers are a huge driver of costs. Lots can run anywhere from $650 to $3200 per parking space for the materials alone, depending on factors such as asphalt vs. concrete and flat surface vs. parking structure. The overall development costs when factoring in labor and other costs range from $2,000 to $20,000 per parking space. Freed from parking restrictions, developers have the ability to optimize land use based on actual demand in the area, repurposing of space for additional residential units, amenities or green spaces. However, as this continues, owners and operators will face new parking challenges.

Housing availability and affordability has been a motivating factor, as it can only truly be addressed when cities begin to embrace more housing. Basic economics tells us that the solution to this problem is to have supply meet demand. There are numerous cities and states that continue exploring rent control legislation or regulations, an approach that can have the opposite intended effect, actually harming development and exacerbating the problem. When local governments eliminate costly and restrictive mandates for multifamily companies, they encourage development.

Parking reform is closely tied to efforts to reduce car dependency, lower housing costs and promote multimodal transportation options. By decreasing the emphasis on parking, cities can foster more sustainable living environments while simultaneously addressing affordability issues. Unfortunately, removing parking restrictions solves one problem at the expense of increasing another where multifamily already struggles — adequate parking. Multifamily communities need to factor in multiple residents and vehicles in each unit.

Space Utilization is Essential

The answer lies in space utilization, which is especially important since people will park their vehicles at their residences more than any other place. Great operators will find solutions to let their residents prioritize this issue and self-concierge. This is where automated parking management platforms are being tapped, reducing the frustration for teams and residents alike. Effective management and utilization of available spaces, which change frequently, can be a monumental task for owners, operators and onsite teams. Implementing a third-party vendor that helps set up all the logistics and manages parking in the background will take significant stress off teams and residents.

Eliminating parking minimums presents a transformative opportunity for cities and multifamily developers, but It is also changing the way multifamily manages parking. However, with all entities working together, this transformation can help with problems and make life better and easier for everyone.