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The value people can get for the spaces doesn't equal the cost of the spaces in the first place. An underground space costs about $60,000 to build and $33 per month for maintenance; if rented at $200/month, it will take 29.9 years to pay off the space.

Therefore, even if people sell them on the market, they're paying more for them. If it's bundled, that's the resident; if it's not bundled, it's the developer, but in order to make a profit on the building, the developer has to charge more for the apartments because they're not making money on the spaces.

At the Highland Park development in Columbia Heights, the developer, only 5% of residents are paying for a space. And the developer is having a hard time renting the spaces to anyone else. The more parking we force on the market, the more we'll have an oversupply, pushing prices down even more. Not only do lower prices make it even harder to make back one's investment on parking, but they artificially make car ownership cheaper—a societal subsidy for car ownership.

Plus, think of it this way: if people could just rent out parking spaces for enough money, developers would build them on their own to make profit. They're not doing that. But if they were, then there'd still be no need for minimums, because developers would just build more parking on their own.

by David Alpert on Jul 25, 2008 3:53 pm • link • report