Lenders Still Want Parking in Apartment Builds - Sachse Construction
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Lenders Still Want Parking in Apartment Builds

There is a lot of focus on parking in Southern California today. With ride sharing, the growth of public transit and even the potential for autonomous vehicles in the future, developers are wondering if the current parking regulations are outdated. San Diego took a leap earlier this year and removed parking minimum requirements for new apartment projects near transit. The move was met with acclaim from developers. The issue came up at the CREW San Diego meeting last week—which included Betsy Brennan, CEO of Downtown San Diego Partnership; Stephanie Smith, managing attorney of Grid Legal; Elyse Lowe, director of development services at the City of San Diego; and Laura Black, deputy director of community planning & implementation at the City of San Diego—but there could still be challenges.

“The city passed reduced parking requirements for multifamily housing and transit areas earlier this year. It just got approved by coastal commission and is affective citywide. There is no mandating parking minimums,” she said. The idea is to let the developer decide what parking is necessary; however, developers might not have that opportunity. “This could be a lending issue, though. Some lenders don’t like a project that’s not parked,” added Black.

Lowe said that for parking minimums to be effective, the industry needs to work together. “If we as a city put forth parking reductions and developers don’t use them, you will see policymakers look at parking maximums. The finance portion might be the challenge,” she said. “The whole circle needs to work together.”

The concept is an effort o stop planning cities, developments and infrastructure around cars. “For mixed-use projects, it’s not about dwelling units per acre now,” said Black. “The Mission Valley Community Update Plan incorporates this change. It’s a change: floor-to-area-ratio—same box, but it’s not about how many units you can put in. It’s a way to address the gap in the ladder to affordable housing and to find incentives to get different levels of housing built, not a unit count basis.”

The next move could be to remove parking in office properties; however, brokers are currently saying that there is already a parking shortage in office properties and commercial zones. Black agreed that office would be next. The city tackled multifamily first; commercial office will be next,” she said. It will be complementary.”

Some options to make this work include shared parking opportunities where office can share with residential. Another option is to reduce the width of right of way to slow cars. Smith said that it is best to let the industry decide, adding “traffic is a big issue used in lawsuits.”

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