Parking, Development Costs, and Affordability

What’s the Problem?

Building parking spaces adds to the cost of any development. With the cost of constructing parking running from roughly $1,500-$2,000 per space for surface parking in suburban areas to over $20,000 per space for underground parking in urban areas – not counting land costs or opportunity costs – the financial burden of parking can be substantial. [1] For residential developments, the cost of complying with minimum parking requirements can add significantly to the challenge of building affordable housing. Nelson-Nygaard, a transportation planning firm, found that each additional parking space per residential unit reduces the number of units on a typical lot by 20% and increases the cost of a typical unit by 20%. [2] While the potential for spillover due to inadequate parking supply is a legitimate concern, for affordable and senior housing developments, projecting parking demand accurately is especially important. Residents with low incomes, enabling them to qualify for affordable housing, typically have lower auto-ownership rates than the population at large, and therefore less need for parking. If the housing is served by public transportation or is within walking distance of a commercial center there will be even less demand for parking. Seniors are also less likely to drive and to own a car. These lower auto ownership rates should be taken into consideration when setting parking requirements. Residents without cars should also be offered the opportunity to save money because they are not using any parking spaces.


To keep down the parking costs associated with affordable housing, establish flexible parking requirements based on:

  • expected demographics of residential developments (age, income, other auto-ownership factors)
  • alternative mode access (especially proximity of transit, but also pedestrian and bicycle facilities)
  • implementation of programs to reduce the need for parking spaces, such as parking cash out, un-bundled parking, shared parking, priority parking for carpools, or car sharing
  • parking studies providing data to support requests to reduce or increase parking
  • Allow residents without cars a discount on their rent, or allow them to rent their spaces to others with a need (see unbundled parking).
  • Avoid deeding parking spaces with units so that they can be bought and sold as needed. As a partial step, consider providing one deeded parking space per unit; residents needing additional parking spaces can rent them from a pool of extra spaces required, with the number required based on the location and local transit options available (see unbundled parking).
  • Allow the housing provider to negotiate with other nearby property owners who may have extra spaces available, overnight for example (see shared parking).
  • Eliminate minimum parking requirements for affordable housing in certain locations.
  • Don’t build affordable housing in isolated locations where all access is by car only.


  1. Todd Litman, Victoria Transport Policy Institute, “Parking Evaluation: Evaluating Parking Problems, Solutions, Costs, and Benefits”, Online TDM Encyclopedia,
  2. Jefferey Tumlin, “Getting Parking Right” – Presentation to the Massachusetts Smart Growth Conference December 1, 2006. Available online at