The Car-Free Housing Contract

Is a parking spot an amenity or a right to a renter in Los Angeles? By requiring developers to provide up to two parking spots per unit in every new development, Los Angeles has decreed that parking is an inalienable right. It doesn’t matter if you move closer to work, sell your car, buy a metro card or even don a bike helmet, you can’t unbundle the cost of parking from the cost of housing. By failing to reform archaic parking requirements for builders, the City of LA is simultaneously putting a huge extra cost on new housing development and reinforcing car dependency.

Photographer: Jim Pickerell, Source: National Archives and Records Administration
Photographer: Jim Pickerell, Source: National Archives and Records Administration

If you’re having trouble making the connection between parking requirements and the high cost of housing, read this study which outlines the process of planning a 50 unit building. After accounting for parking requirements, the project is reduced down to just 25 units, the price of each unit is raised 50% in order realize a reasonable return on investment, and thus scarcity is maintained. It shouldn’t be surprising that you officially have to be rich to rent in L.A

The solution is to abolish all parking requirements as was just done by Mexico City. However, this is impossible in the political reality of Los Angeles, where a car-dependent, semi-suburban lifestyle is considered a fact of life and neighborhood associations hold tremendous veto power. These associations tend to fight new development because they are comprised of incumbent homeowners who benefit from scarcity which makes their property values appreciate. In any case, it can be tough to cut it without a car given the lack of a robust public transit system. Until that transit system is here, residents are unlikely to welcome any policy that may lead to further strain on street parking. But reliable transit is unlikely to be funded without more transit riders and those transit riders will never materialize as long as everyone continues to cling to their cars. Such is the chicken and egg problem of making Los Angeles a denser, more affordable and navigable city.

 

We need a way to ease the transition

If we’re going to trade less off-street parking for more affordable housing, we have to ease the concerns of existing homeowners near new parking-less developments while incentivizing future residents to go car-free. Despite the fact that almost all of Los Angeles’ population growth is in low-car households, and that it’s arguably cheaper to use car-sharing services than it is to own a car, current residents will want assurance that those moving into the new parking-less development on their street won’t clog their neighborhood with additional cars. What if there was a way to earmark new development for renters who are willing to go carless and in doing so promote more affordable development?

 

A housing ‘carpool lane’ for no-car households

Imagine a scheme in which developers get a complete waiver from parking requirements on a project by entering into a Car-Free Housing Contract requiring them to only rent to tenants who do not own a car, as certified by the Department of Motor Vehicles. This renting requirement would be bound to the property and apply to all subsequent owners using a deed restriction (a document that places a long-term limitation on real estate), the same tool that is used to implement income restrictions for affordable housing projects.  Potential renters of a unit in a CFHC building would enter the driver’s license or ID numbers of all potential residents of driving age in their rental applications. The building owner would submit those ID numbers to the Housing Department which would look them up in a DMV database to verify that the residents have agreed not to register a car. Now new housing supply can be more cheaply added without negatively impacting parking or traffic while rewarding those who go carless with more housing inventory from which to chose.

The system could be implemented at a relatively low administrative cost by automating the DMV validation process, requiring renewal once a year, and making channels available for neighbors to report violations. If life circumstances change for a renter in a CFHC such that they end up needing a car, they could pay an extra yearly tax to the city that goes towards public transportation. The deed restriction wouldn’t have to be 30-50 year terms like they are with affordable housing, they could be limited to 10-20 years (or however long it’s expected to take for transportation to catch up).

 

Steps for Car-free Housing Contracts

  1. A developer plans a project for which it makes fiscal and practical sense to maximize the number of units on the lot but not include parking.  It’s a building targeted at those who don’t own cars. Ideally, it would be near existing public transit.
  2. The developer enters into a Car-Free Housing Contract, which demands that for a given period of time, any owner of the property may only rent to those who do not have registered motor vehicles.  In exchange, all minimum parking requirements are waived.
  3. A building is erected that contains substantially more housing than it would have if parking spaces were required. This creates more housing without added congestion.
  4. A potential renter interested in living in this building fills out a rental application that includes a valid driver’s license or ID number for every driving age would-be resident.
  5. The property owner receives the application and submits the applicant’s license or ID numbers to the Housing Department or whichever entity is best suited to manage this program.
  6. The Housing Department looks up the ID numbers in a database provided by the DMV to verify that they don’t have a car registered in their names.  As long as no registered car is found, the owner may rent to the car-less applicant.
  7. The DMV will not allow these residents to register a vehicle as long as they continue living in a CFHC building.

 

One risk is that developers would use this incentive to avoid building parking and still only rent units at high prices. But putting up a building with no parking is risky and it reduces what can be charged for the units. Instead, this tool would stimulate exactly the type of low-rise, wood-framed, inexpensive building that the market needs most for middle-income affordability. Parking requirements are a prohibitive factor in all types of development but they are especially so for smaller, independent developers who own modestly-sized lots that don’t have space for over-ground parking and can’t justify the enormous cost of digging underground.  This tool is unlikely to be applied to building luxury monoliths for which parking spots are expected and digging subterranean parking is a smaller percentage of the building cost anyway. Instead, it will make smaller parcels developable at a smaller cost.  It will encourage more reasonable, human scale building near transit.

 

A city built around people, not cars

It would be reductionist to name parking requirements as the only cause of the housing crisis. We need to up-zone huge swaths of single-family housing, simplify the process of granting permits, revisit onerous building restrictions and pass state-level legislation that eases the veto power of local neighborhood associations. But parking requirements may be one of the most serious limits on the growth of available housing inventory. And they don’t just impact housing. As long as we continue to build our cities around the assumption that cars are required, we will encourage more driving and build less housing, diminish mobility, human health and move further from reaching our climate change commitments

It’s time to fast-forward to a future in which we house people rather than housing cars.

 

 

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