A Hidden Cost That May Be Helping Drive Rent Increases

Parked CarsThe affordable housing crisis in Seattle is garnering attention from the media, homeowners and politicians alike. Rent costs continue to rise and more than 100,000 people are estimated to move to the Seattle area in the next 20 years. Minimal affordable housing options have over half of Seattle renters paying more than one third of their income on rent, an average of $1,501 per month for a one-bedroom apartment.

Common reasons thought to contribute to rising rentals costs are lack of rent control and the fact that almost 65 percent of the city is zoned for single-family housing, leaving limited areas for multifamily development. But an article in The Stranger recently outlined a less visible factor that contributes to monthly rental costs: parking garages in apartment buildings.

Off-street parking requirements and more conservative developers contribute to the, arguably excess, parking built for apartment buildings. It’s estimated that one parking stall in a residential garage can cost between $20,000 and $50,000. Depending on the size of the building this can add several hundred thousand dollars in cost, not to mention taking up space that could be used to construct far more profitable housing units.

The article states that though many still cite parking as an amenity they prefer, more than 30 percent of parking spaces in buildings built after 2008 go unused at night, according to a  2013 report by the Sightline Institute. So who pays for these parking spots? All tenants, even those without cars.

Because the developers rarely see a full return on investment for parking spaces, landlords generally pass on the expense to their tenants. These expenses, usually represented in higher rent, can add up to 15 percent of monthly rent, applying to all tenants regardless of whether or not they own a car.

This issue was recently addressed in the final proposal of Mayor Ed Murray’s Housing Affordability and Livability Agenda. “Off-street parking requirements or quotas have a large impact on the financial viability of new housing for both market and affordable housing development,” the report states. “Parking quotas act as density limits, inflate the average size and price of housing units, and prevent some smaller properties from being developed altogether.”

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