Urban parking spaces are expensive for commercial real estate developers to build, and they detract from other more productive and attractive uses for building space. With increased mobility options – scooters, bikes, ride-hailing – many residents in densely populated cities such as Chicago, New York City and Washington, D.C., are adopting alternate modes of transportation and abandoning car ownership and its financial strains. In fact, some economists predict a decline in car ownership as early as 2030.
As attitudes toward transportation change, commercial real estate developers are also shifting their building designs to accommodate these new modalities. Due to parking reduction incentives, developers in some cities are incorporating designated car-sharing parking spaces, which reduces the overall number of required parking spaces. By extension, this can also save on parking construction costs and can provide greater long-term flexibility for the property space.
Increasing designated car-sharing spots can benefit developers by:
- Saving space and money: Every car-sharing space in Austin, for example, eliminates the requirement for a developer to build 20 regular parking spaces and can save up to $35,000 in construction costs per space. Some properties can reduce the square footage of parking versus housing.
- Aiding in LEED certification: On-site alternative mobility options, including car-sharing, provide points toward LEED certification.
- Incorporating more attractions for tenants: Maximizing usable, leasable square footage can allow developers to provide more productive and attractive building spaces. Developers can create spaces with new technologies and amenities that will appeal to more tenants. In addition to car-sharing spaces, other examples include designated hot and cold food storage for grocery and food deliveries, high-tech shared working spaces, gyms with arcade-style features and more.
Developers in cities like Austin and Denver are increasingly incorporating car-sharing spaces into their building plans. For instance, car-sharing company SHARE NOW (formerly car2go) has eliminated the need to build 1,100 parking spaces in Austin, which has saved developers a total of $38.5 million as of 2018. Future projects are planned to eliminate 2,060 or more parking spots, saving $72.1 million.
In Denver, properties like The Grand and Vista Flats were built with limited parking and chose to offer SHARE NOW as an amenity to residents. Other buildings that have implemented these car-sharing spots include Denver’s RiDE at RiNo and Austin’s The Ruckus and Ruckus 2.0, Springdale General. Residential developers are certainly the leaders in this trend, though hotel and service industries are seeing the same benefits.
Instead of spending more time and money building structured parking, developers can maximize parking space uses and make room for leasable square footage, leading to profitable efficiencies.