Landlords in Seattle Can’t Force Renters to Pay for Parking Anymore

Photo:  Joe Mabel
Photo: Joe Mabel

The Seattle City Council has approved a substantial package of parking reforms that aims to make housing more affordable and reduce dependence on driving.

Among the highlights is a new rule that would unravel one of the biggest subsidies to driving: “bundling” the price of car parking with rent. Landlords of buildings with more than 10 apartments will now have to charge for parking separately and cannot bundle it with rent.

By giving renters no option but to pay for parking with their apartment, bundling obscures the true price of parking. And parking costs a lot. A 2015 study by King County concluded that parking adds, on average, about 12.5 percent to rents [PDF], fueling the city’s housing affordability problems.

Meanwhile, there’s good evidence that much of the parking in Seattle goes unused. Almost a third of Seattle renters do not own a car, according to the city, and one study found about one-third of the parking spaces at multi-family buildings are not occupied.

With the new rule, renters who don’t own cars won’t be forced to pay for parking spaces they don’t use. (Landlords will be able to rent unused parking spaces to people who live outside the building.)

Minimum parking requirements were also cut in half for below-market housing construction: from one space for every three units, to one space for every six.

In addition, the new rules expand the areas of Seattle where no parking is required. Prior to the changes, areas within a certain radius of a transit stop served every 30 minutes for 18 hours a day were exempt from parking rules. Now the looser rules apply to areas near transit stops with 30-minute frequencies 13 hours a day. That means more housing can be built at lower cost.

The Seattle Times reports that parking construction shows signs of declining thanks to the city’s previous parking reforms. In 2004, the average new apartment had 1.5 parking spaces. Last year, the number was down to just 0.6 spaces per apartment.

  • Asher Of LA

    Can someone explain to me how unbundling isn’t BS? As in, what’s to stop landlords from charging some nominal low price when they’ve overbuilt parking, like $5-20 a month?

    Unless the city is mandating a minimum price for parking close to the parkings cost, I don’t see how unbundling is actually accomplished. It’s a mirage.

    However, Seattle’s move to allow buildings to lease existing spaces to outsiders will create more demand for spaces, raising their price. THAT will allow partial unbundling. (Only full unbundling if it commands a price that matches or exceeds the construction and opportunity cost.)

    And I strongly believe outsider parking is the big story here, because it can be duplicated elsewhere and succeed even where lots of people still drive, because it reuses existing spaces while raising the price of parking, and shaving cost and time off new housing/office construction.

    The only real way to accomplish unbundling is to build so little parking that every space is paying at least it’s true cost, $250-500+ a month (based on a Portland study). This is aided by having lots of parking free buildings that are inherently less costly, and thus can bring prices down via competition. Short of that, parking costs are being passed on, openly or not.

  • Elizabeth F

    > As in, what’s to stop landlords from charging some nominal low price when they’ve overbuilt parking, like $5-20 a month?

    I can’t say for sure. But if landlords are required to offer the same price to their tenants vs. the general public, they would be crazy to do it at $5/mo.

  • Asher Of LA

    That’s an interesting stipulation. It would have to be in a place where free or very cheap street parking is unavailable.

    It could work well, or it could backfire, depending on how tenants and nontenants respond to price changes. For instance, if you had 100 spaces, 80 residents paying $100, 20 nontenants paying $200, total revenue is $12k, or $120 per spot. Could the landlord sell all 100 spaces at $120 or more? If yes, then more parking revenue enables more unbundling, if not, then the landlord may pass on the revenue loss to residents (unless as I mentioned the market is heavy with car light and car free buildings with lower costs). The more nonresidential the parking already is, the less problematic that stipulation.

    Definitely worth experimenting with.

  • Michael

    This is reasonable. To go a few steps farther, Seattle could mark-off every on-street parking spot in the city and then auction off the annual rights via ebay. The owners of those annual rights could then meter, sublease, use personally, build pocket parks, etc as they wish. Old cranks could keep the spots in front of their homes clear. If neighborhoods want to restrict overnight parking, they would need to put their money where their mouths are and buy the parking rights.

    I’m guessing most spots go for no more than 100 dollars.

  • Joe R.

    One use I can think of right off is putting storage containers in the spots, then renting out the space.

  • EightySixed

    What’s funny is the article says landlords can rent out their spaces to people outside the building; however, the building shown in this article is the Belltown Court Condominiums and their CC&Rs prohibit renting spaces out to non-residents.

    Anyway, I don’t see any language dictating what the “parking fee” should be. So, it seems, that someone can rent the parking space for $1 and charge $1899 for the rental unit. Don’t want the parking space? Fine. $1 off your rent.

  • EightySixed

    You can’t compel a landlord to rent a space to the general public.

  • bxdanny

    Landlords are not likely to do that if it would mean they had to make the parking spot available to a non-resident for $1 a month.

  • Edward Everett

    If I have to pay for a parking spot why can’t I sublease it for a much higher price? Oh, the legal ramifications are going to be ridiculous.

  • Vooch

    A friend of mine lives in a 40 unit building in La Jolla built in 2006. 2 floors of underground parking with 4 floors of courtyard housing above.

    At no time ( even late Sunday night or holidays ) are more than 1/3 of the spaces filled

  • Vooch

    could the old cranks defend their space with shotguns and rock salt ?

    In order for this to work and be fun, I’d want that provision to be included

  • JZ71

    The ways that the Law of Unintended Consequences can kick in are multiple. Besides the obvious (charging $1 or $10 per month for parking), they’ve opened the door to unbundling other parts of the transaction (see the airline industry). Why not charge separately for mailboxes or bike racks, lease window coverings and appliances by the month? Charge an occupancy fee for roommates, like they charge for pets? How about an elevator fee?

  • kevd

    Most landlords are not in the habit of giving up potential revenue by choice. But true, they are very much within their rights if they let the spots they are not being paid for sit idle.

  • kevd

    while I’m far from a free market ideologue, the free market does have its areas of efficiency. one is finding a market price for goods (like parking spaces in seattle) that are numerous and available, without barrier to all.
    I would guess that most landlords will see the value in an extra $250 (or whatever the market ends up settling at) a month for parking spots that are sitting empty.

  • baklazhan

    “what’s to stop landlords from charging some nominal low price when they’ve overbuilt parking, like $5-20 a month?”

    Nothing, but this informs future decisions about building parking. If the going rate for parking is $5 a month, who in their right mind would spend $50,000 per space to add parking to new construction?

  • …if not, then the landlord may pass on the revenue loss to residents…

    So just raise the price that they charge tenants?

  • Michael

    I’d personally buy the mid-block spots across my neighborhood and install my own bump outs, skipping this whole DPW charade.

  • JR

    Why not just build a nice big strawman while you’re at it?

  • Damiana Swan

    It’s just adorable that they think landlords will actually reduce rents, instead of keeping rents right where they are and tacking on high prices for parking, in addition.

  • Asher Of LA

    You would think, but there’s already brazen misinvestment in places like Seattle despite minimal take up among already underpriced parking. Rosenberg did an article revealing it.

  • Anonymous Bike Zealot

    They wouldn’t have to do that. It could be like congestion pricing on the freeway. $1? That was five minutes ago. Now it’s $500.

  • Anonymous Bike Zealot

    Old cranks is hate speech. Try to be a little tolerant, you snot nosed little boy.

  • Anonymous Bike Zealot

    Absolutely, as long as the market supports it and Seattle’s would certainly seem to support it for the foreseeable future.

  • Michael

    I’m an old crank.

  • mckillio

    That doesn’t make this legislation wrong.

  • mckillio

    Easy, because you don’t own it. If the property owner allows you to do so, go for it.

  • mckillio

    If you don’t have a car and you see that a parking spot is $5 a month, why on Earth would you lease in that building? You’re clearly paying for other’s parking. So that route could backfire on property owners as more people ditch car ownership.

  • Asher Of LA

    Are there not places in Seattle that charge nothing i.e. parkings included?

  • JZ71

    Every apartment comes with a suite of amenities. It’s up to every potential tenant to weigh the value of all amenities, even those that they might not use, against the total rent. Once you start unbundling, you WILL increase management costs, which, in turn, WILL be passed on to all tenants.

    And I have no problem with the concept behind this ordinance – it will both better utilize available parking, and, potentially, result in marginally lower rent for non-car owners. But much like the airlines, landlords aren’t stupid. If they can generate a new revenue stream from this, they WILL look for other ones.

    Want the management office to receive and hold your packages for you? How about $1 per package? Want a mail box, in the lobby, instead of at the post office or the UPS store? How about $15 a month? If they can charge for car parking, why not charge for bike parking? Why not charge for the fitness center? If you live on the 1st or 2nd floor, why pay for the elevator? That free wifi? It’s now $50/month.

    As an owner, I’d probably welcome this, not oppose it. Blame the city and generate more total revenue – what’s not to like?!

  • thielges

    Can’t apartment building owners unbundle those amenities you list without this new law? I fail to understand how this parking reform changes the calculus for voluntarily unbundling other amenities.

  • JZ71

    Of course they can. The new law will just encourage them to do so.

  • Kenny Easwaran

    If landlords do that, then tenants will move to the glut of new apartments that are being constructed without parking.

    If a landlord had the option of keeping rent the same and adding $200 a month cost for parking, then they would already have been squeezing tenants with that $200 a month as part of the base rent.

    Your worry would only make sense if there is strict rent control that would prevent landlords from raising rent alone, but would allow them to add a parking price on top of controlled rent.

  • mbrenman

    If there were too much parking in Seattle, it wouldn’t be so expensive.

  • Kenny Easwaran

    I believe that landlords are allowed to do most of these things already, but choose not to. (However, I suspect that federal law makes it illegal to separate mail delivery from addresses, so mailboxes probably can’t be unbundled.)

    In any case, the point here is that landlords are *forbidden* from rolling the cost of parking into the price of the unit. If they want to charge extra for roommates, they probably can under current rules. But most of them just care about getting money, and don’t care about forcing out residents, so they’re going to offer the apartment at the highest price they can to whatever group will pay it, whether it’s one person or many. Charging more to the group means they’re likely to get a single occupant paying the lower price, which doesn’t help them.

  • Kenny Easwaran

    The reason you can’t sublease it for a much higher price is that if you can collect $300 a month for the spot, then the landlord will offer it to you for $300 a month, knowing that they can just skip you and go directly to the subtenant that will offer that much.

  • Kenny Easwaran

    Then they’re going to collect $0 because no one will pay the $500.

    If someone’s willing to pay $500 for the spot, then they’ll charge $500 for that spot, whether it’s to a resident or a non-resident. They’re just not allowed to skip the market entirely and force the resident to pay for the spot in order to get the apartment.

  • thielges

    Sorry but I am not seeing the connection. That’s like saying a law requiring plastic grocery bags to be replaced with paper bags will encourage those stores to eliminate all plastic packaging from their shelves. Landlords are businesspeople and make rational decisions based on economics and the laws that constrain their operations. It isn’t like a law that forces unbundling of one amenity will cause them to go “Oh, yeah. I never thought of unbundling other amenities.”. They’re smart people and not simply stumbling over ideas prompted by laws.

  • KJ

    I think that already happens in cities where the parking is in a “good” location…

  • Asher Of LA

    That could reduce rents they could charge on the units, or induce drivers to get rid of their cars or park elsewhere. Or the residents might pony up.

  • Asher Of LA

    “Developer Mark Knoll says one of his new 30-unit buildings in West Seattle offered just two parking spaces near the entrance, and in three months he hasn’t been able to rent out either spot for $75 a month.”

    So at a price way below cost, they can’t fill even 2 spaces with 30 units.

    “She said even if their building had parking, they likely wouldn’t pay the $100 to $150 a month they were quoted during their apartment search to rent a spot. ”

    Prevailing parking prices are below estimated construction and opportunity costs.

    The default hypothesis is that financiers and NIMBYs are behind the overparking. Not developers really, who have already gotten the message. Financiers will be forced to, when they’re going up against car free buildings with a lower cost base.

    https://www.seattletimes.com/business/real-estate/seattle-builds-lots-of-new-apartments-but-not-so-many-parking-spots/

  • mckillio

    There won’t be.

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