The CMHC recently released its Impact Of Minimum Parking Requirements For Multi-Family Residential Buildings On Housing Affordability And Sustainability report.
It analyzed the potential impact of minimum parking requirements on multi-family residential buildings in Canada, including improving housing affordability and reducing environmental impact. Historically, Canadian municipalities mandated minimum specific parking space provisions for builders, often based on the number of dwelling units. However, changing trends, such as decreased car ownership, may mean these requirements may no longer align with current or future parking needs. Construction and maintenance costs for these parking areas could be lowered or avoided. Environmental impacts could also be reduced.
A key concept was that parking, once a significant factor in perceived value for a property, may not always be as important for tenants or owners any longer.
The study noted variability in parking requirements and a trend in municipalities towards decreasing mandates on numbers and minimum sizes for parking, reflecting a shift towards accommodating changing parking demands.
While the study is aimed at encouraging discussions of policy by municipalities, its findings can be of interest to landlords and other real estate investors. Changing requirements and a potential decrease in how needed or valued parking spaces are, means that properties without ample parking, especially if they are near transit, may be desirable regardless of the lack of parking.
A comprehensive analysis of municipal parking regulations in Edmonton, Montreal, and Toronto was done. Toronto and Edmonton have shifted from minimum to maximum parking requirements, aiming to reduce parking burdens on new residential constructions. Edmonton recently removed minimum parking requirements in 2020, choosing to allow developers to decide on on-site parking provisions, with some exceptions for downtown, transit-oriented development areas, and main streets.
The study also discussed how parking demand is influenced by evolving transportation methods. Potential shifts in parking needs may occur based on emerging mobility trends and technological advancements. Trends such as car-sharing, ride-hailing, and telecommuting are changing traditional patterns, as the reliance on personal vehicle ownership and, therefore, parking, is reduced.
If autonomous vehicles became widely adopted, it would further reduce the need for parking as they require smaller spaces to fit.
The study examined condominium sales data in the Greater Toronto Area, however, and found that condos with parking sold for about 6.5% more than those without. Parking accounted for 5.7% of the sold price near transit and 7.2% farther away, highlighting the impact of public transit on this. Downtown condos had only a slightly higher parking valuation (5.8%) compared to suburbs (5.4%). Downtown parking spots were 34% more expensive than in the suburbs, indicating higher demand despite lower valuation. The study noted, however, that condos with
parking spots tended to have more living space than those without, which could skew results for these properties.
Parking construction costs are significant – and on the rise – so with the trends of potentially reduced car ownership in the future, it is worth assessing the costs vs. benefits. Underground parking stall costs range from $80,000 to $100,000; deep, multi-level parking structures can cost up to $165,000 per stall. Increased parking stalls per unit decrease profits and raise average unit prices, while possibly not being as desirable to attract buyers or tenants. Rehabilitation and maintenance costs of these parking areas, especially for underground lots, are significant, too. Furthermore, there are significant environmental impacts and implications involved in these parking areas.
Overall, there appears to be a declining overall demand for parking, with preferences shifting towards cheaper locations, likely leading to impacts on property prices and rents.
