The resurgence of many cities that were written off only a few decades ago has come with a pernicious downside: a rapidly dwindling supply of affordable housing. According to a recent report by the U.S. Department of Housing and Urban Development, the number of very-low-income households that do not receive housing assistance and that pay more than 50 percent of their income for rent stands at more than 7.7 million.
Nationally, for every 100 very-low-income renters — those earning less than half the area median income — there are only 65 affordable units. Moreover, approximately 40 percent of units that would otherwise be affordable for these renters are occupied by higher-income individuals and families. The situation is dire.
Fortunately, policymakers have an unprecedented opportunity to expand affordable housing due to the tectonic shift in surface transportation resulting from the growth of ridesharing companies like Uber and Lyft, as well as the rapid advances in autonomous self-driving vehicles.
The connection between the seemingly disparate sectors of housing and transportation? Parking.
Local governments regulate two important factors affecting the cost and supply of housing: parking minimums and land use. Historically, as both urban populations and vehicle ownership expanded, cities implemented strict requirements for off-street parking to manage demand that was quickly overwhelming available curb space.
Minimum parking requirements add substantial cost to new buildings — especially in densely populated areas — because developers typically have to build underground, structured parking as opposed to a surface lot. The average cost of building underground parking is more than $30,000 per space.
Yet, new transportation technologies are rapidly eroding the long-standing justification for this urban planning model. With each passing day, we move away from owning cars that sit unused 95 percent of the time to accessing transportation services on-demand. Autonomous vehicles, once relegated to science fiction, will soon be capable of circling the city awaiting passengers.
These changes will lead to substantial reductions in vehicle ownership. And as the number of idle cars and demand for parking falls, cities will be able to reduce or even eliminate parking minimums.
Many cities around the country have adopted inclusionary zoning policies — essentially a requirement that developers set aside a certain percentage of their new units for low- or moderate-income individuals and families. These policies effectively reduce the profits from new construction. In order not to push out new development, local officials often set modest inclusionary zoning requirements.
Reducing or eliminating parking minimums would cut construction costs, allowing proactive cities to enact more aggressive affordable housing requirements without the fear of driving away new projects. For cities looking to take a more measured approach, one option would be to implement reductions on a project-by-project basis, providing developers the option to decrease parking in exchange for more affordable units. To be clear, simply reducing parking minimums will not expand affordable housing absent a requirement linking the reduction in parking to the provision of additional affordable units.
The idea of reduced parking requirements is not without precedent. In the past, cities have successfully allowed builders to reduce parking in proximity to subway and light rail stations. Unfortunately, projects like these are few and far between. The coming mobility revolution presents an opportunity to reduce or eliminate minimums over a far greater area.
Next is the issue of zoning. New transportation technologies like autonomous self-driving vehicles also provide an opening for cities to increase the overall housing supply by rezoning many residential areas to allow for more multi-family buildings and greater density. Again, parking is the key. Concerns over parking supply have often produced fierce opposition to new construction at the neighborhood level, severely constraining development — especially of multi-family rental properties. As vehicle ownership rates fall, additional housing development will not produce a corresponding increase in parking demand.
None of these changes will happen overnight, but local leaders and city planners must begin the hard work of reviewing their long-range transportation, housing, and community development plans to take advantage of the revolution occurring in transportation.
Change of this magnitude does not come along often. When it does, it should be harnessed to provide the greatest social benefit possible.