Affordable housing developers in California have scored a big victory in a battle over parking requirements.
Parking seems like a mundane matter, but it has long been a thorny issue. Most cities and counties require a large amount of parking to be included in projects, making it a design challenge not to mention a budget killer.
Still, developers are required to meet stringent parking requirements even when their developments serve seniors or special-needs populations that have few cars.
A new law aims to help developers in California overcome this problem. Signed by Gov. Jerry Brown on Oct. 9, AB 744 allows developers who are seeking a density bonus to also request that jurisdictions reduce the minimum parking requirements if they are building affordable housing near qualifying transit.
“This regulatory change, which costs the state nothing and costs the local jurisdictions nothing, allows for certainty and reduces the cost of affordable housing,” says Meea Kang, the affordable housing developer who conceived the idea. “It allows us to build more housing units for the same area. We’re going to get better cost efficiencies.”
Founding partner of Domus Development, Kang says without a reduction in parking requirements many good affordable housing projects are infeasible.
In one case, she was building a 50-unit special-needs development on a small lot in the Central Valley. The city wanted two parking spaces per unit, which meant building 102 parking spaces on 0.6 acres even when most residents would not own cars. It took eight months to get a reduction in the parking requirement.
When developments are required to include more parking than they need, there’s a higher cost to the project. “We’re artificially increasing the cost of housing because jurisdictions demand all this parking; however, we now have evidence to suggest that minimum parking requirements produce far more parking than is actually needed, while also hindering affordable housing and infill development,” Kang says.
She notes that an analysis of parking utilization at 68 affordable housing developments in the Bay Area by TransForm’s Green TRIP program found substantial overdevelopment of residential parking at an extremely high cost. TransForm surveyed buildings’ parking lots at night when residents would be expected to be sleeping with their car parked in the on-site spaces and found that 31% of the 9,387 spaces were empty with an estimated construction cost of approximately $139 million.
Parking isn’t cheap. According to AB 744, which was introduced by Assemblyman Ed Chau (D-Monterey Park), “the average construction cost per space, excluding land cost, in a parking structure in the United States is about $24,000 for above-ground parking and $34,000 for underground parking. In an affordable housing development with a fixed budget, every $24,000 spent on a required parking space is $24,000 less to spend on housing.”
Kang says the cost is even higher in places like San Francisco, where the cost to build underground parking is closer to $50,000 per space.
“Ironically, to build and dedicate one space often costs more than the household earns in a year,” she says.
Kang and others hope the bill will allow more senior and special-needs projects to become feasible.
The bill allows a developer that is requesting a density bonus (under SB 1818)and including affordable units in the development to also request that the city reduce the minimum parking requirements as follows:
· For 100% affordable projects:
o For projects within a half-mile of a major transit stop, the parking requirement cannot exceed 0.5 per unit;
o For seniors-only projects with access to transit or paratransit, the parking requirement cannot exceed 0.5 per unit; and
o For special-needs projects with access to transit or paratransit, the parking requirement cannot exceed 0.3 per unit.
· For mixed-income developments within a half-mile of a major transit stop, and that includes the maximum number of very low- or low-income units under Density Bonus Law, the parking requirement cannot exceed 0.5 per bedroom.
Local governments could request a higher parking standard if they completed a parking study in the last seven years that supports the need for more parking.
The bill was supported by more than 60 organizations and individuals. It was opposed by the League of California Cities and about 20 local jurisdictions.
While AB 744 was signed by Brown, another key housing bill was vetoed. The governor rejected AB 35, which would have expanded the state low-income housing tax credit program by $100 million annually for five years. Citing financial uncertainties, Brown vetoed several bills involving tax credits. “Tax credits, like new spending on programs, need to be considered comprehensively as part of the budget deliberations,” he said.