Deregulating Parking

Nearly all American cities have minimum parking requirements (MPRs) in their zoning ordinances. In transit-rich downtowns, uniform MPRs use prime land for parking, fragmenting the city core. Many cities are deregulating parking to encourage more connected downtowns.

In "After the Minimum Parking Requirement: Parking Reform in a Small University City" (Journal of the American Planning Association, Vol. 90, No. 3) Srirang Sohoni and Bumsoo Lee track the results of a natural experiment in removing parking requirements in the college city of Champaign, Illinois.

The authors found that onsite parking construction in the deregulated zones decreased dramatically, from 108 percent of the earlier requirement to only 46 percent, clearly indicating that the prior minimum parking requirements enforced an oversupply of parking.

Champaign is in an east-central Illinois metropolitan area shared with the city of Urbana. Home to the University of Illinois Urbana-Champaign, the region hosts three distinct downtown areas, including a student-centered Campustown. The region boasts high transit ridership—around 40 percent among students and 5-8 percent regionwide.

In 2015 and 2016, Champaign removed minimum parking requirements in the university district and residential areas in the downtown and midtown districts, including all of Campustown. These reforms aimed to improve housing affordability by reducing parking construction costs, enhancing the design and aesthetics of new developments, and making the targeted areas less car-dependent.

After the removal of minimum parking requirements, developers could rely on perceived market demand instead of regulations like one parking spot per two bedrooms to determine how much parking to build.

Lower Development Costs

How many excess parking spaces were avoided in the seven years after the parking reform, and how much was saved in construction costs?

Sohoni and Lee used the parking minimums and 108 percent of those minimums as the lower and upper bounds for the baseline parking supply. The original MPR would have required 3,975 parking spaces. However, developers built only 1,833 spaces when given market-based choices, saving 2,142 spaces.

If developers had continued the past trend of constructing 108 percent of parking minimums, deregulation would have saved 2,472 spaces.

Taking a conservative estimate of $20,000 in construction costs per parking space in Champaign, the repeal of MPRs helped developers save approximately $43 million to $49 million. This indirectly benefits tenants, as developers are likely to pass on construction costs to them.

Increased Downtown Density

The original parking standard in Campustown required one space for every two bedrooms in residential buildings. Since student housing is often compact, this led to a 600-square-foot living space needing 330 square feet of parking, including circulation areas. The repeal of MPRs allowed for the construction of more units per project.

Following the reform, the average residential unit density in the deregulated districts increased by 79 percent. This increase may be due to the removal of the open space requirement in the university district combined with parking deregulation.

Increased Municipal Revenue

Sohoni and Lee observed signs of Champaign's existing parking stock being used more efficiently. There was a 39 percent increase in the city's long-term permit sales, while short-term permit sales dropped by about 45 percent between 2016 and 2021.

In cities with excess parking facilities, a benefit of parking reform is increased revenue from city-owned parking. In the long run, the city could invest these funds in pedestrian, cycling, and public transportation infrastructure through policy measures such as a parking benefit district.

American cities can benefit from removing MPRs. Deregulating parking can boost housing density, promote active building frontages, and steer new developments toward transit-rich, walkable areas. Cities like Madison, Wisconsin, and Ithaca, New York, have recently removed MPRs in their core districts.

Despite the benefits, parking reform often faces resistance from businesses worried about parking spillover, residents used to free parking, and local politicians who support them. Targeted, district-scale reforms, such as those in Champaign, can provide a politically feasible starting point for gradual change.

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