RSG Solutions

June 21, 2021

By Alejandra Martinez, Research Assistant

Developers, cities, and the state continue to seek ways to facilitate the creation of much-needed housing and have worked toward removing housing production constraints as California contends with the ongoing housing crisis. However, throughout this process, we have had to confront exclusionary and restrictive housing policy that has artificially constrained the availability of developable land and increased housing costs. Nevertheless, in recent years both the state and cities have begun to pursue creative reforms that may help us get on path toward more affordable housing as supply increases.

The passage of AB 68 in 2019 offered one of the first major steps in recent years towards increasing land availability for housing; it permitted additional housing unit construction in all single-family dwellings—promoting housing density and affordability by increasing the supply of housing. Changes in the market followed swiftly—the state saw a 20% increase in permits for ADUs after the bill passed. For 2021, it appears that minimum parking requirements are next in line for a challenge. Currently, AB 1401 is making its way through the State Assembly; if it passes, cities would be prohibited from imposing minimum parking requirements on developments located near existing public transit.

It is evident that the region’s dependence on cars has directly impacted how housing gets built. To account for increased curb parking demand—that is oftentimes an extrapolation—as a result of residential growth, cities often require that housing developers supply a minimum of parking on-site to offset that increase. As a result, developers must make trade-offs between utilizing valuable and costly land for additional housing or parking spaces that may go underused as future tenants’ needs for private vehicles changes.

Given the magnitude of today’s housing crisis, some cities have thus taken action and sought to explore ways to loosen parking requirements in order to reap a positive, cumulative impact on the total supply and general affordability of housing in their communities. When we consider areas like downtown L.A—where parking usually costs developers more than $50,000 per space—it’s clear that revisiting required parking minimums can offer new ways for facilitating more housing development.

The growth of transit-oriented communities indicates that forward-looking development can take advantage of nearby transit access that reduces future tenants’ need for private vehicle transportation. These types of areas offer an opportunity for greater housing density without the need for a proportional increase in parking spaces. Furthermore, reforming parking requirements can help reduce development costs for parking that are inevitably passed down to tenants through the form of higher rents.

It is precisely for these reasons that in 2019 the City of San Diego repealed parking minimums for new developments in transit priority areas—defined as areas sitting within one half-mile of a current or planned transit stop. The City had previously mandated at least one parking space per housing unit or bedroom, with the number of spaces increasing in proportion to the number of rooms. Now, developers can build developments with as few as zero parking spaces.

As several council members discussed, this flexibility would provide cost-saving options for new tenants and offer a way to reduce vehicle carbon emissions. The new mandate also requires that developers include certain transit resources and amenities for new housing developments in transit priority areas; this would include access to things like bike storage areas, discounted and subsidized transit passes, and on-site daycare facilities. These parking reforms helped complement the city’s density bonus program, and one year afterward, the city’s density bonus program produced more housing than before, with total housing production citywide increasing by 24 percent in a span of one year.

Whether AB 1401 will eventually earn the stamp of approval is not known, but some cities have evidently been eager to take matters into their own hands and enacted parking reforms that have helped make a dent in the housing shortage. What would parking reform in all of California mean for us?