Detroit Hurt By Too Much Parking

Detroit's downtown parking lots via  Data Driven Detroit
Detroit's downtown parking lots via Data Driven Detroit

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Every American city has parking craters — as we’ve catalogued extensively — but downtown Detroit is especially damaged.  The problem persists, blighting downtown, even as its fortunes have risen in recent years.

Why are parking craters so hard to get rid of? The Detroit Free Press dove into that question in an outstanding recent report, that offers clues about parking and land use problems that are widely applicable.

Here are some of the more interesting takeaways:

#1. About half the area of downtown Detroit comprises surface parking lots

The Free Press says there are 800 parcels in central downtown. Only half have buildings on them. The rest are mostly surface parking.

In total, they estimate there are 67,000 spaces in downtown Detroit. By comparison, downtown Denver has 43,000 off-street spaces. The cities are comparably sized, population-wise, but Denver is the one that made crucial improvements.

#2. Detroiters don’t have many good alternatives to driving and parking even downtown

Only about five percent of downtown Detroit workers take transit. Compared with more than 30 percent in New York and 20 percent in Chicago, according to the Free Press.

That’s partly because, as we’ve reported so many times before, Detroit’s transit system is awful. The Free Press mostly treats the need to drive downtown as a given. But it does mention services like Uber and Lyft, the potential expansion of the region’s transit system or self-driving cars could greatly reduce the need for downtown parking.

#3. Just two guys own a huge percentage

Dan Gilbert of Quicken Loans and the Ilitch Family of Little Caesars Pizza own a huge percentage of downtown parking. Gilbert’s company controls about 12,000 spaces — many of them in garages, the Free Press reports. The Ilitch family own another enormous proportion, which are mostly surface lots, Freep reports, and “mostly empty” except during special events on weekends.

Many downtown parking lot owners go to great lengths to hide their identities, Freep reports.

#4. The lots make big money

People pay as much as $50 per space to parking downtown during the mostly Sunday Detroit Lions games, the Free Press reports. In total, the paper estimates downtown parking generates about $175 million a year for private owners — and millions in taxes for the city government.

#5. Owners speculating on land

The Free Press interviewed parking lot owner Greg Tremonti, one of the city’s smaller, family-owned operators. He said he was receiving calls from people interested in developing the land all the time — but he refused to sell because owning the lot was such a sweet deal for him.

“Everybody’s been chasing it,” told the paper. “My mother’s very happy and the property value just keep going up and up. Just not interested. At this point, it don’t hurt nothing. Beats the stock market.”

Land speculation can be harmful to cities. But it’s especially bad in a very poor city like Detroit, where property tax revenues have declined dramatically since pre-recession levels, making it difficult for the city to sustain basic services for residents.

Detroit could alter the equation by changing the way it taxes these properties, or by incentivizing developers to convert the lots to residential use, which could raise more money. Unfortunately, with ownership concentrated among some of the region’s wealthiest and most influential families, that might be difficult politically.

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27 thoughts on Detroit Hurt By Too Much Parking

  1. jcwconsult looks at the map and thinks ‘gee they could put in a nice 6 lane arterial to connect all those parking garages, just have to clear out some buildings’

  2. Parking econ is weird. It’s important to remember that in legacy cities like Detroit, substantial buildings were torn down to build these parking lots. The parking lots were, economically speaking, IMPROVEMENTS over normal urban fabric. So to redevelop these lots into a buildings, it ends up needing to be to a level that’s even more substantial than what was torn down as the lots continue to be worth more the brownstones, apartments buildings & smaller-scale retail that they replaced initially, even if in the aggregate they blight the downtowns. So it creates a weird development dichotomy: a sheet of asphalt or a mid-rise plus.

    Since high rises are expensive to build & most well-off people don’t love living/working in parking wastelands, a lot of cities are stuck in a position where bringing back the brownstones would be everyone’s preference, but the projects don’t pencil. What does are buildings that seem conspicuously overbuilt or require public funding. Ultimately, the development action ends up forced to the periphery of downtowns just outside the commuter parking walkshed.

  3. By comparison to Detroit, Denver is a boomtown. Developers of new buildings always build in way more parking than required but it’s currently what lenders and investors deem necessary. Unfortunately, land and construction costs have escalated to where new product like apartments is now twice the cost of what it was five years ago.

  4. Detroit is such a failed city. This is what happens when you let Democrats run a city for 70 years.

  5. thank you for summing up the history of detroit as a partisan jab

    btw are you a bot or just of bot intelligence

  6. Before you start making it more difficult to drive in Detroit, you might ask yourself “Who is going to pay for the operating costs (read that ”labor costs”) of Detroit’s new and improved public transit system?” Here’s a hint. The answer is not “The citizens of Oakland and Macomb counties.” Do you remember Detroit’s unfunded pension liabilities? They do. I guarantee it. They won’t pony up the money. And they would never do so without receiving effective control over spending – a political dilemma since Detroit won’t agree to suburban control of its budget.

    Detroit’s problem is that it has spent the last 50 years systematically and methodically pulverizing its own tax base. It’s not going to reach out beyond its city border and tap those taxpayers now no matter how much it desires to do so. How then does Detroit revitalize? It must cater to the demands and needs of its prospective tax base. That’s a difficult problem since Detroit is flat broke. But that’s the consequence of years of bad policy decisions. This isn’t the Soviet Union. People don’t need internal passports to move. Neither will they live where they are told.

  7. Detroit needs to build up the tax base. That it precisely what the last paragraph of the post prescribes.

    If they can’t go out and tax Oakland and Macomb, it shouldn’t be letting the residents of those counties dictate (unofficially) how Detroit uses it’s most valuable land. Most of those lots cater to suburban commuters/visitors, not residents. Detroit needs to get the ball rolling downhill.

  8. But allowing and encouraging development of many of these lots will naturally get people to want to live there, not requiring anything that you’re talking about and to very little cost, if any to the city.

  9. Cars turned tax base into a scarce commodity for which cities must compete. So Detroit must accept the fact that these citizens it desires to attract do not compose a collective milch cow that exists just to fund its ideas about social justice. They won’t tolerate being taxed like that.

    And Detroit needs those suburbanites in its city. It is the height of folly to seek to punish them for choosing to work there.

  10. Several points:
    The Hyper-Expensive Regional Transit Authority boondoggle was voted down the last time it was on the ballot, and the support recently wasn’t even strong enough to try to put it on the 2018 ballot where it would have failed again. But look for this specter trying to take suburban money to subsidize Detroit to rise again.

    Detroit once had 2 million people and now has about 700,000. Some land allocations were when the city was MUCH larger and more economically successful.

    Detroit is being decently run now, but is paying for decades of earlier corruption.

    James C. Walker, National Motorists Association

  11. I have visited Detroit frequently from BEFORE the 1967 race riots that drove well over half the population out of Detroit – and much of that flight was unjustified.

    The collectors and arterials are all well established. They need more businesses to be re-established along them, plus more residential development to be done on the blocks of burned out homes and bulldozed lots of neighborhoods behind the main roads that were full of nice homes never rebuilt after the 1967 riots.

    SOME of the businesses are being built/rebuilt and there are some revitalized residential areas – but there is a LONG way to go get back even close to the vibrant financially-successful 2 million population city Detroit once was.

    James C. Walker, National Motorists Association

  12. “And Detroit needs those suburbanites in its city.” I cannot agree more. Mayor Young did not think so, and I think that was one of the many things that brought Detroit to the mess that is now.

  13. Sad that a city that suffered such a huge decline after gambling and losing on the automobile is unable to move into the 21st century due to a population trapped by car dependency and the selfishness of a wealthy minority that benefits from the status quo.

  14. The parking lots were, economically speaking, IMPROVEMENTS over normal urban fabric.

    Question is, how much of that economy was a result of city policy? Tax policy, zoning, etc. You may have a perfectly serviceable building, but if the laws now require a parking lot, the economic value may be less than zero, no matter how well-built it is. There’s no one who can legally move in. And so you may as well demolish it.

    a lot of cities are stuck in a position where bringing back the
    brownstones would be everyone’s preference, but the projects don’t

    Seems to me that they would pencil in a lot of locations, but those are generally locations where people are hanging on tight to zoning that forbids brownstones. I’m writing from an expensive area, though, so the situation may be different in Detroit.

  15. Detroit has a lot going for it, despite its history. I think it would be much smarter to develop a downtown that appeals to the urbane creative class than to continue catering to car-dependent suburban commuters. That strategy played a significant role in its troubles, and parking lots are just about the worst use of land.

  16. The employers in Detroit (whom you hope will drive this urbane renaissance) need employees. Those employees aren’t coming from Detroit. The more difficult you make their lives, the more money they will require as an incentive to work in the city. So even though you might prefer to kick those awful suburbanites to the curb, your local employers won’t share your animosity. This is what I mean when I say Detroit must cater to the needs and desires of its tax base. If it’s important to them, it better be important to Detroit.

  17. Some is regulation but in downtowns it’s mostly just high land values, because a parking lot is a profitable business, it’s not just undeveloped land.

    For example, most developers are looking at land acquisition costs as being only about 20% (or less) of a total deal. So if a prime downtown parking lot is $5M/acre**, we can infer that the total development needs to be around $25M as a baseline.

    If we want the $25M development to be in the form of 16 brownstones on that 1 acre, they’d need to be $1.56M each… not going happen in Detroit, Cleveland, Milwaukee, etc. What would pencil would be a minimum of 125 $200K 1 bd apts. It’s a mid-rise-plus.

    It’s a dichotomy. Asphalt or pretty large building.

    ** about 5 million/acre is what the most prime downtown parking lots have sold for in the last 18 months in the 39th largest metro in the US (milwaukee).

  18. I’m not passing judgment on suburbanites, though I do think it’s important to recognize the strain the suburban lifestyle represents for cities.

    I can’t think of any city that has thrived by catering to its satellite communities. (I can think of many, including Detroit, that suffered significant declines by doing so). Luckily, suburbanites also benefit from good transit and vibrant downtowns, two things which cities are working toward to attract the young professionals that really make cities boom.

    As the article mentions, downtown parking lots serve their owners well, but dense housing or corporate headquarters on the same plot of land serves a city and its inhabitants far better.

  19. It’s a good lesson to see how Detroit put all its chips on automobiles, and has lost so much, and continues to lose because of this self-inflicted addiction.

    It’s like when my childhood neighbor – a tobacco marketing agent – died of lung cancer in his late 50s. He had always told us that there was no real proof that cigarettes caused cancer.

    Suburbanites – people who are invested in suburban sprawl – are equally in denial about how toxic this car-company-designed style of urbanism really is. They don’t even realize how ugly the rows of lawns are. They think (in their fantasy minds) that their lawns are “beautiful” and a sign of a healthy community.

    Imagine if the economy plunges and most of us lose access to cars. Detroit will be a ghost town, and will have nothing to show for its history except grown over lawns and cracked parking lots.

  20. So when I think of brownstone neighborhoods, I think of Brooklyn neighborhoods like Brooklyn Heights (also, this is what Wikipedia says). And while it’s true that there are about 16 brownstones/acre (including streets), you have to realize that these are 5000-7000 square foot buildings. Some of them are (super-luxury) single family homes, others are divided into apartments. I looked on redfin to see what was for sale, and one unassuming brownstone had a 1-bedroom condo for sale, which was one of nine units in the building. 2675 square foot lot.

    So a 1-acre brownstone-type neighborhood could easily have 125 $200k 1bd apartments, or some mix of larger and smaller units.

    That said, I don’t really think of brownstone neighborhoods as being in “prime downtown” either. A mile from the center would be just fine, or more, and the land would (presumably) be cheaper. As long as there was a functional transit line connecting it to the center.

  21. In cities like Detroit, Milwaukee, etc. the entire downtowns were totally built out by 1920. The stuff that was lost for the sake of automobile parking were the less substantial buildings. This slide show link below is fascinating. The whole blanket of 2-4 story buildings was lost. It’s of Detroit, but it could almost any rust belt city.

    Anyway, I’ve been trying to figure this out for a while, because here in Milwaukee we’ll have 20+ story buildings going up while at the same time there is a frustrating sea of parking lots blighting parts of the downtown. Reflectively, it’s easy to think that it’s just a failure of planning or megalomania about skyscapers or whatever. But I think it’s really that the 4 story & below new development… just doesn’t pencil out. At least not on paid parking lots within the core downtown – the land is worth too much as parking. Outside the commuter parking walkshed, there’s lots of that type of development. But parking econ just distorts everything toward way bigger developments in the CBD.

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