Abstract Index #: 416 THE HIGH COST OF BUNDLED PARKING ...

Abstract Index #: 416 THE HIGH COST OF BUNDLED PARKING: PARKING AND URBAN RESIDENTIAL RENTS IN THE UNITED STATES Abstract System ID#: 106 Individual Paper GABBE, Charles [University of California, Los Angeles] [email protected], presenting author, primary author PIERCE, Gregory [University of California, Los Angeles] [email protected] CRANE, Randall [UCLA] [email protected] Parking requirements are a centerpiece of American land use regulation, and reforming these standards is of interest to many policymakers. Bundled parking refers to parking spaces that are rented or sold as part of the unit price (McDonnell, Madar, & Been, 2011). In most cities today, housing must be built with on-site parking. While a major justification for reducing or eliminating minimum parking requirements is that it unnecessarily drives up the price of housing, the effect of bundled parking on housing prices remains poorly understood. To shed light on this relationship, we ask: What are the effects of parking provision on residential rents? We extend the literature by analyzing the effects of bundled parking on housing costs for renters in metropolitan areas across the U.S. We employ a nationally representative sample of housing units, the American Housing Survey (AHS), to rigorously investigate this question. We approach this question from the perspective that a parking space or two represents a residential amenity, rather than a housing unit attribute that should be regulated for health or safety reasons (Shoup, 2005). A burgeoning academic literature has suggested that parking requirements increase housing prices and reduces supply, thus depriving people of the option to pay less for a unit without parking (Manville, Beata and Shoup, 2013). These empirical analyses use regression models to isolate the value of a parking space within the bundle of housing attributes. For example, Jia and Wachs (1999) use a hedonic model to test the relationship between offstreet parking and housing prices in San Francisco, finding that the average single family unit with off-street parking sold for 11.8% higher and the average condo unit with off-street parking sold for 13% higher. Manville (2013) uses a natural experiment in Los Angeles’s Adaptive Reuse Ordinance and finds that “an apartment with bundled parking is associated with $200 more in asking rent, and bundled parking with a condo is associated with a $43,000 increase in asking price.” There are several mechanisms through which parking requirements act as a regulatory barrier to lower cost housing. Deakin (1988) and Quigley and Rosenthal (2005) argue that regulation can limit where development occurs, the density of that development, add standards for lots and buildings, shifts costs from the municipality to the developer, and create other direct and indirect controls on growth. Despite the well-developed nature of these independent strands of research, previous research on the relationship between parking supply and housing costs for renters is lacking. Data for this study are derived from the 2011 American Housing Survey (AHS). Using the 2011 AHS micro-data, we analyze 32,754 rental units in metropolitan statistical areas, statistically representative of the national housing stock in metropolitan areas. To answer our primary research question, we build a multivariate, hedonic regression model to isolate the underlying equilibrium price for each housing attribute. In addition to parking variables, our model includes unit quality and quantity characteristics, neighborhood characteristics, and intra-metropolitan area location attributes. References Jia, W., & Wachs, M. (1999). Parking Requirements and Housing Affordability: Case Study of San Francisco. Transportation Research Record: Journal of the Transportation Research Board, 1685(-1), 156–160. doi:10.3141/1685-20 Manville, M. (2013). Parking Requirements and Housing Development. Journal of the American Planning Association, 79(1), 49–66. doi:10.1080/01944363.2013.785346 McDonnell, S., Madar, J., & Been, V. (2011). Minimum parking requirements and housing affordability in New York City. Housing Policy Debate, 21(1), 45–68. doi:10.1080/10511482.2011.534386 Quigley, J. M., & Rosenthal, L. A. (2005). The Effects of Land Use Regulation on the Price of Housing: What Do We Know? What Can We Learn? Cityscape, 8(1), 69–137. Shoup, D. C. (2005). The High Cost of Free Parking. Chicago, IL: Planners Press, American Planning Association.