Preparing for LA's Future: Fewer Parking Podiums, More Car-Share Spaces

A parking podium under construction at Wilshire & Vermont in Koreatown. Photo by Muji.

Pretty much everyone hates parking podiums.

For one, they're almost universally reviled from an architectural and aesthetic standpoint. And, even when they're built unobtrusively—as with the upcoming Broadway @ 4th building, where floors 2 through 6 will be dedicated to parking—they're a massive wasted opportunity to provide more space for people to live and work in some of the most desirable areas in the city. The same goes for pretty much every parking structure with more spaces than drivers, but podiums have a particularly unpleasant effect on the street-level experience of urban denizens. With the changing demographics of cities and the declining demand for parking in urban areas, more needs to be done to mitigate the blighting impacts of overbuilt parking facilities, now and especially into the future.

In recognition of this need, the Los Angeles City Council last year adopted a bicycle parking ordinance that allowed developers to replace up to 30 percent of their required parking spaces with bicycle parking. Not only does this make bicycling a more attractive choice, it reduces the total space that developers need to devote to parking (bikes and cars together), lowering the cost of new development and opening up land to a more diverse set of uses. In a place like Downtown LA, in addition to many other transit-oriented cities around the country, a better option would be to simply eliminate parking minimums entirely, but the bike parking ordinance is a start.

In that spirit (and because parking podiums suck) we should provide another incentive: allowing developers to reduce their parking burden with spaces dedicated to car-share services like Zipcar and Car2Go*.

Each car-share vehicle is estimated to take between 9 and 13 (and up to 32) privately owned cars off the road.

Studies have shown that each car-share vehicle takes between 9 and 13 cars off the road—and, under more optimistic study parameters, as many as 32. By allowing builders to contract with car-share services in their private parking garages in return for decreased parking requirements, the city can decrease VMT, save its residents thousands of dollars per household on the costs of car ownership, and leave more space for productive uses like new homes, offices, and hotel rooms. It can also reduce the cost of construction — parking garages can cost upwards of $30,000 or even $50,000 per space to build — and ultimately open the door to more affordable housing across the city.

This is a sensible step forward on the above merits alone, but it becomes even more appealing in light of the coming advances in driverless technology. If mass car ownership is truly to become a thing of the past, which seems likely in the coming decades, all of this space dedicated to parking is going to look extremely foolish when we no longer need a place to store our vehicles for 95 percent of the day. Reducing that space now with a reliable bridge technology like car-sharing is a smart compromise that will better prepare us for a future of greatly diminished car-dependence, and it will have the added bonus of enriching our city and its residents in the mean time.

*These are actual "sharing" services, compared to companies like Uber and Lyft which are more properly described as next-gen taxi services.

Los Angeles Parking Meter Reform, Reasonable Edition

Parking reform is the talk of the town these days in Los Angeles. A new organization has formed to press for lower fines and a more sensible parking enforcement system, and with a name like the Los Angeles Parking Freedom Initiative, how can you go wrong? Don't you like freedom???

The centerpiece of the organization's reform package is to cap fines at $23, barely a third of the $63 currently charged for most infractions. But the problem with parking tickets probably isn't their price. If their price was actually unfair or out of scale as a penalty, no one would ever get a parking ticket because they'd never risk over-staying their meter. With 2.6 million tickets and $150 million in revenue last year, it's pretty clear that the fines aren't high enough to actually prevent people from breaking the curb-side rules.

But that's not to say that parking tickets aren't incredibly frustrating or that the system isn't in need of reform. Even as someone who hasn't owned a car in six years I've managed to get ticketed within the last few years, and it made me angry. Very angry. I felt like I'd made an honest mistake and a $60 ticket was a punishment that didn't fit the crime; I'm sure it's a feeling many have shared.

The LA Times Editorial Board published a post this morning imploring city officials to come up with a more just system, so I'm throwing out a few ideas. My motivation here is two-fold. First, to find a solution that maintains high enough fees to discourage scofflaws because parking turnover is important to both consumers and businesses -- $23 simply doesn't meet that requirement. Second, to minimize the frustration of excessive fines resulting from the rare, honest mistake, and to reduce the confusion that leads to those mistakes. If you get three parking tickets a month, it's you that needs to re-evaluate, not the city. Parking tickets have a place in a congested, highly urbanized city, but they must be perceived as fair if they're to survive. Here are my recommendations:

  • Give drivers some freebies. Once every six or twelve months, forgive a driver their sin. We all make mistakes, and if we only make them once a year or so that's not so bad. (This wouldn't apply to the more severe infractions like parking in front of fire hydrants or blocking driveways.) We're all human, and we all lose track of time, get held up in meetings, or mis-read a sign on occasion. Speaking of which...

  • Fix the damn parking signs. If signs are clearer, not only will fewer people mis-read them and park improperly, when they do they'll have less justification for disputing the fine. If a sign requires more than two separate sets of rules, just turn the spot into a parklet and put us out of our misery. And though this may actually be illegal... 

No. Inappropriate. Photo by Reddit user IntelligentYinzer.

  • Limit drivers' ability to contest tickets under most circumstances. I don't know if this violates any standards of due process or anything, but I think the above two reforms should justify a more restricted ticket dispute process. If you're parked in a street-sweeping area during street-sweeping hours, I'm not sure what there is to dispute. This goes for many situations, and the enforcement agency sending you a picture of your car parked in the wrong place at the wrong time should be a sufficient response to challenges like that. Putting thousands of tickets through the adjudication process each year probably costs the city many millions of dollars, and residents lots of wasted time. And just to sweet the offer...

  • Give drivers a 5 minute buffer. This is really no different than holding them to the time they've actually paid for, since people will probably adjust to the extra five minutes, but I think the psychological impact could be significant. If you knew you had five minutes extra and you still missed the meter, complaints about how the meter maid was just waiting to stick it to you don't hold water quite as well.

  • Let residents and businesses sweep their own streets. If they want. This idea actually comes from the Parking Freedom Initiative (FREEDOM!!!), and I think it's a good one. It'd save the city money on sweeping, save residents money on parking tickets when they fail to move their cars on sweep days, and the city could pick up some extra revenue from those that don't keep their streets clean like they agreed to. I'm not sure how practical this really is (especially with enforcement), but I think it's worth looking into. And lastly, even though it doesn't have much to do with parking tickets... 

  • Eliminate disabled parking placards. These have a history of abuse in LA in particular, with a 2010 NBC report finding 80 percent of spaces in a 10-block radius downtown occupied by vehicles with disabled placards. Worse, these placards do nothing for the most disabled (who can't drive at all) or for low-income disabled persons who can't afford to own a car. Most of the remaining disabled people have no particular reason for getting free parking, and the cost to the city is enormous. On top of the general pointlessness of of the placards, the system is also rife with abuse. Get rid of disabled parking placards and you open a lot of metered parking spaces up to productive use, taking the pressure off of other drivers to park in questionable locations.

I have just a few responses to some of the more distasteful reforms proposed by the Parking Freedom Initiative. The worst is the idea that we should reinvest parking ticket revenue into additional parking. This idea is horrible, and the city shouldn't be responsible for subsidizing additional parking, especially since this would displace private investment in more productive land uses like commercial and residential development. In a city with a deepening affordability crisis, wasting more money and space on sub-market parking for the middle and upper classes should not be anywhere near a priority. If there's actually a need for additional parking it will be provided by the private market. If it's not being provided, it means drivers aren't actually willing to pay the market price of parking, in which case they have no one to blame for the shortage but themselves.

Another really bad idea is to create a TAP-like yearly parking pass (similar to those used on Metro), presumably to be used at metered spaces. I take it back, this idea is actually the worst, not the parking structure one. Unless this costs on the order of $10,000 a year, the potential for abuse of this card is incredible. How much would you pay for unlimited access to the $4 an hour space, 12 hours a day, 250 days a year, at the courthouse downtown? Every public, metered space in every employment center in the city would be occupied from 6am to 8pm with nearly zero turnover all day long, and every business that relied on a steady stream of customers would go under almost immediately. (On the bright side, walkable neighborhoods would be fine.)

To those less inclined to stick up for drivers and parking rule violators, I sympathize with you, but the system really does need fixing. It's up to the more level-headed among us to enact reasonable reforms while retaining the virtues of a system that encourages putting a price on the private use of public space. If we don't, we end up with the same kind of hare-brained initiatives that led to a completely broken property tax system (Prop 13) and a 2/3 vote requirement for all special taxes, no matter their value (also Prop 13). Reactive governance hasn't served us very well in the past, so let's be proactive while we still can.

Reduce Speculation and Limit Gentrification: Penalize Absentee/Pied-à-Terre Owners

The cities where housing prices are highest and the gentrification debate is the most forceful—places like San Francisco, New York, Vancouver BC, and London—all share one quality: they're world cities. There are a number of ways to define what makes a city "world class," but the salient attribute here is that each of these cities is the target of significant foreign investment, particularly in the housing sector. Wealthy investors, foreign and American alike, park their money in these cities and crowd out less affluent families that would otherwise choose to live in these cities, if only they could afford to.

The 1004-foot, 90-story One57 Tower in Midtown Manhattan is home to just 155 residential units. Photo from New York YIMBY.

While cities like Chicago, Austin, and Seattle can typically stave off drastic price increases by just building enough housing to meet demand, that's not always possible for world cities because demand isn't just local, or even national—it's global, and in an era of growing inequality the demand for luxury investment properties and pieds-à-terre is vast. That demand is an obstacle to providing an adequate supply of affordable, middle-class housing, but it needn't be. If harnessed appropriately, it could even be a strength.

By charging the wealthy owners of these seldom-inhabited homes a more aggressive property tax, we can discourage this kind of investment on the margins and collect more revenue for cities to support their essential services and affordable housing goals. Besides discouraging speculative investment on the part of potential owners, it would limit the incentive for developers to produce massive-yet-low-density towers that provide little additional housing in the most desirable neighborhoods.

Background

Right now there are two problems in world city housing markets. The first is that there's just not enough housing to meet demand, usually even just the demand of local and regional residents. That results in consistently low vacancy rates, which in turn leads inexorably to higher prices as a large supply of would-be residents compete over a small supply of available housing.

The second problem is that not all of the homes in these cities are even occupied. Wealthy foreign investors view these markets as safe, and often even lucrative, places to park their cash, and they have the added advantage of making great vacation spots for a few weeks out of the year; plenty of rich Americans do the same thing, owning homes in cities across the country that are generally only inhabited for a small portion of each year. This quote from a 2011 New York Times article sums up the problem:

In a large swath of the East Side bounded by Fifth and Park Avenues and East 49th and 70th Streets, about 30 percent of the more than 5,000 apartments are routinely vacant more than 10 months a year because their owners or renters have permanent homes elsewhere, according to the Census Bureau’s latest American Community Survey. 
In one part of that stretch, between East 53rd and 59th Streets, more than half of the 500 apartments are occupied for two months or less. That is a higher proportion than in resort and second-home communities like Aspen, Colo.; Palm Beach, Fla.; Virginia Beach; and Litchfield, Conn.

Not only does this leave many neighborhoods barren of any night-time and weekend activity, it takes housing off of the market for actual potential residents. Every unit that goes unoccupied is taking up space that could go to a family that would jump at the chance to live in a place of such opportunity and vitality. Those 5,000 vacant apartments in New York's east side could house 5,000 somewhat less affluent (though still undoubtedly wealthy) families, those families' current units could then be occupied by a slightly lower-income demographic, and so on all the way down the line.

The problem is that in many of these cities, the property taxes paid by the wealthy owners of these homes aren't nearly punitive enough to discourage absenteeism. If you pay 2 percent of your home's value on property taxes but your home's value grows by 5-10 percent or more each year, you're still coming out ahead. With the added status and convenience that comes with an extra home in London, New York, Los Angeles, or wherever else, the appeal of buying is obvious, even if you almost never use it. When people choose to invest more of their money in stocks, stocks go up and everyone wins. When people choose to invest more of their money in homes, prices go up and everyone that doesn't already own property loses.

The Fix

The way to fix this is to change the calculus so that owning a second home in these cities is no longer a profitable investment, or at least considerably less profitable than alternative investments. That can be done in a number of ways. It doesn't really matter how you choose to do it, as long as it works. An important side effect will be that as demand among the super-wealthy decreases, the upward pressure on housing prices will subside to some degree. And, bonus!, your city gets more tax revenue.

The simplest way to discourage speculative investment is to raise the tax rate on uninhabited properties. That might mean increasing property taxes to 3, 5, or 10 percent (or more)—that's best determined by the guys in finance. It'll depend on whether your city wants to discourage all speculative/vacation property investment, or if it's content with leaving these properties vacant if it means raising a lot of extra revenue for the city. There's also some wiggle room in determining what the threshold is for being subject to these rates. Should you be exempt if you live in the home at least three months out of the year? Five? Six? Again, the specifics will depend on the exact goals that the locality is trying to achieve.

If tax rates are capped as they are in many states this might require a bigger push, advocacy-wise, to create legislation that can make this happen. That said, it's hard to see a populist policy like this, one that punishes wealthy investors for wasting space in our most productive and desirable cities, as anything but a winner. Alternatives in lieu of a property tax might include explicit fines/fees. Another option would be to charge these owners for the income tax they earn outside the state, but at least in the case of New York state, that was just ruled unconstitutional.

Multifamily Residential Construction is Booming, But There's a Long Way Yet to Go

This winter I wrote that multifamily housing had grown, as a share of total residential construction, to its highest rate since the 1980s. The idea was subsequently picked up by the Wall Street Journal in March and again a few days ago at the New York Times, both of which provided some additional context and slightly updated numbers. Although it varies month to month, multifamily housing—mostly apartments—currently accounts for about 40 percent of home-building activity in the US. That's good news for a country where about the same proportion of residents say they would prefer to live in denser, smart growth-type communities.

Although this has been framed as a multifamily boom of sorts, and it's undoubtedly a positive development, the truth is a bit more complicated. Apartments, condos, and townhomes are all doing well relative to single-family homes, but total residential construction remains far below its peak levels. In fact, despite a modest recovery from its nadir in 2009, new housing permits are still being authorized at a considerably lower rate than they were at any point between 2000 and the onset of the Great Recession in 2007:

So, although the relative share of multifamily construction is at a near-30-year high, the absolute number of units being built is about the same as it was through most of the 2000s, which weren't particularly density-friendly:

Building about 30,000 new multifamily units each month adds up to about 360,000-400,000 units per year, and that won't be enough. Not only do we already have a shortage of smart growth housing to the tune of about 8 million units, we also add about 2.5 million new residents to our population each year and we need the majority of them to choose energy- and mobility-efficient housing if we want to grow our economy in a sustainable way and limit our contribution to global climate change. The first step in allowing people to make that choice is building enough housing for that to even be an option.

Housing in LA Is Unaffordable in Many Places; Transportation in LA Is Unaffordable Everywhere

The following map is from the Center for Neighborhood Technology, which created the Housing + Transportation Affordability Index. As you can see, lots of housing in LA can be rented for less than 30 percent of median household income (everything you see in yellow). Transportation costs for the median household, on the other hand, exceed 15 percent of household income for nearly every census block group in the city. We talk a lot about housing affordability, but transportation affordability is where we're really failing our residents, and it's a direct consequence of being so heavily reliant on cars for getting around the city:

Zooming out, we can see that things don't get any better in the rest of LA County, and—no surprise here—transportation is super-expensive throughout Orange County as well:

Can you spot the yellow census block groups? Because I can't.

Compare that to New York, where it costs very little to get around in large parts of Manhattan, Brooklyn, and the Bronx, as well as in Jersey across the Hudson River:

30 Percent of Income Isn't a Realistic Measure of Housing Affordability

Housing affordability is a big problem in growing cities across the country, but how we define affordability remains problematic. Just look at the hyperventilating that's been going on at Curbed LA for months, or the opening lede to this New York Times article:

For rent and utilities to be considered affordable, they are supposed to take up no more than 30 percent of a household’s income. But that goal is increasingly unattainable for middle-income families as a tightening market pushes up rents ever faster, outrunning modest rises in pay.

Scary stuff, but no one ever seems to ask where that 30 percent cut-off comes from. I take housing affordability as seriously as anyone (as my incessant writing on the subject can attest to), but this sounds to me like a very generalized—and fairly arbitrary—measure of affordability.

Image from Reconnecting America.

Take my own living situation as an example. I pay more than 30 percent of my income on housing because I value living alone and being near high-quality transit. That's partly because it allows me to live car-free, which frees up thousands of dollars a year in transportation spending, and it's why housing + transportation (H+T) is a more accurate measure of housing affordability for many households. It's also just a personal preference to live alone in a fairly central location, and I don't think it makes me "rent-burdened" to willingly make that choice. I could always find a roommate, after all.

Other measures of affordability seem deliberately exaggerated to make their point, like the National Low Income Housing Coalition's annual Out of Reach study, which calculates how many hours a minimum wage worker would need to work to afford a 2-bedroom unit in each state. But who says anyone's entitled to a 2-bedroom unit? I certainly don't feel cheated that, as a student, I can't afford a 2-bedroom unit. I couldn't even afford one as a salaried researcher at a major university, but I didn't feel cheated because I didn't need a 2-bedroom apartment anyway.

These reports tend to ignore the fact that many people don't need a 2-bedroom home unless they're living with roommates (in which case rent would be split), or they have children or family to take care of. We shouldn't ignore those groups, but we should also be realistic about who actually needs multiple bedrooms.

For many people, especially those living in dense urban centers, living in anything more than a studio or one-bedroom is a choice that has much more to do with preference than affordability. Too often, we seem to mistake the choice to live in trendy, highly-accessible areas, in homes more spacious than we need, as an external burden being placed upon us. But if I upgrade from a studio to a one bedroom apartment I'm not more rent-burdened, I'm just making a choice to trade some disposable income for some disposable space. No intervention is needed to ensure that I can make that upgrade without any kind of financial sacrifice.

It is problematic that so much of our income—on the rental side, at least—is accruing to a relatively small and affluent class of property owners, and is probably part of the explanation for why inequality has grown in recent decades. That said, although the share of income we're spending on housing has increased consistently over the years, we're spending much less on other goods like food and clothing. The amount we spend on housing has only increased from 23.3 to 32.9 percent since 1901; the bigger problem is that housing plus transportation has increased from 23.3 percent in 1901 (when transportation costs were negligible) to 50.3 percent today. As I wrote last week, the increase in transportation costs has actually been a much more significant issue than the increase in housing costs.

None of this is to say that affordable housing isn't a major problem, but this 30 percent cutoff just doesn't tell us enough. If a new subway rolls through your neighborhood and drives up rents, that has to be balanced against the potential for massive transportation savings. Currently, most reporting doesn't take that into account at all. The Center for Neighborhood Technology has used a more realistic measure of affordability (housing + transportation) for years, and even HUD recently adopted the same, but major media and most advocate groups still ignore it entirely.

Unaffordable Housing Sucks, But the Money We Waste on Transportation is Still the Biggest Problem

I'm working on a write-up about how poorly we define housing affordability, but I wanted to put this out there first. This chart shows consumer spending in the U.S., and highlights how much our expenditures have shifted over the past 111 years (data from the U.S. Bureau of Labor Statistics):

In the early 1900s food and alcohol were, by far, the biggest cost for households; throw in apparel and almost 60 percent of the average family's budget was already spent. Nowadays, these items account for less than 20 percent of our spending.

Housing, on the other hand, has grown from about 23 to 33 percent of spending since the beginning of the 20th century, and it's remained at roughly 33 percent throughout the 2000s.

Transportation spending has grown even more, from a negligible expense in 1901 to just shy of 20 percent of total spending in 2003. It had declined slightly, thankfully, to 17.5 percent by 2012.

These are just averages of course, but I thought this provides some useful perspective. A hundred years ago we spent more than half of our money on food and clothing. I think it's safe to say that we weren't getting a better dining experience back then, despite the cost, and although the coats were awfully nice, they were ultimately still perishable. Today we spend more on health, education, and entertainment, which frankly are pretty great things to buy from an individual and societal point of view.

We also spend more on housing, which is bad. But as long as people actually have the opportunity to buy—which, in some cities, middle class families really don't—owning a home is a much better use of 40 percent of your income than a bunch of food in your ice chest. That's not to say that promoting inflated housing prices should be a goal of government policy (as it currently is), or that we shouldn't do more to make homes more affordable where people want to live and where they will have the least negative impact on their environments, but we're better off today than we were in the past.

At a time when most of us go into retirement with few assets other than the homes we live in, there are worse things than spending a large share of our incomes on housing. For renters in particular, we should continue working for a greater supply of accessible, affordable housing. But even more importantly, we should concern ourselves with transportation costs, which add nothing to the long-term value of our lives or our bank accounts, and have grown in 100 years from nothing to nearly 20 percent of total spending. High transportation costs are no more a given than unaffordable housing in growing urban centers, but unlike with ballooning home values, no one benefits from frivolous, inefficient transportation spending.

UPDATE:

I was asked to include the actual income/expenditure numbers (non-inflation adjusted) that were used to make the above graph. Here's a table that includes those numbers as well as their share of total spending:

Owning a Home is a Great Way to Spend Your Money

What's a better long-term investment: home ownership or stocks? The short answer is that it's probably better to invest disposable income in the stock market, but most people don't have a whole lot of disposable income available. The more salient question for most families is whether renting or buying a home is a better investment, in which case buying is the obvious choice. Who wouldn't want to spend a little bit extra to recoup more than 50 percent* of their costs in equity?

For whatever reason this point is often overlooked when discussing the issue of renting vs buying, including in this post by Yglesias at Vox, perhaps because many of the people writing about urban issues are earning more than the average person and can afford to rent and still have money left over to invest elsewhere*. Lots of people don't have that luxury. For those of more modest means, the case for home ownership is similar to the case for getting rid of your car and moving to the city: it's clearly better to put your money into an asset than a liability.

That's not to say that there aren't benefits to renting. Lots of people don't want to be tied down to one city or one neighborhood, especially early in their careers, and the geographic mobility associated with renting can translate to greater economic mobility as well. Home ownership isn't a risk-free venture either, as the housing crisis made abundantly clear—there are good times and bad times (and good places and bad places) to purchase a home. But especially with the numerous ways government subsidizes home ownership, if you plan on sticking around your city for a while and are fairly confident you're not in the middle of a housing bubble, buying is absolutely the right choice.

I've talked about this in the past, but I think it's worth restating once in a while. Tens of millions of people enter their senior years with zero assets and no retirement savings, and we shouldn't dismiss the sizable difference that home ownership can make in those families' lives. The case for home ownership is strong even in lieu of government subsidies, so this isn't an argument in favor of them—I've said before that the mortgage interest tax deduction should be abolished entirely. Having arguments about the general merits of home ownership is silly though. It's common sense for the average family that it's better to buy, and I think urbanists undermine themselves and their message when they imply otherwise.

* This number can vary pretty widely, depending on interest rates and appreciation.

** I know that Yglesias owns a home and has written about the benefits of home ownership in the past, so this isn't a criticism of him specifically.

Time to Hand Over Your Car Lanes, Seattle Drivers

Martin Duke at Seattle Transit Blog has a post up today that laments the failure of Proposition 1, which will cut 550,000 service hours from King County Metro's bus service, and it includes this important point (emphasis mine):

One effect of the cuts will to be consolidate desirable service into a few trunk lines. It is more important than ever that these lines function effectively to avoid the total collapse of the system. In these corridors, cities must ignore complaints from other stakeholders and remove parking or general-purpose lanes to ensure these buses are not stuck in traffic. Moreover, future city transportation levies must invest in priority treatments for buses. The returns from these projects are often astronomical, and if anything the case for them has improved.

With a massive reduction in service hours, Metro must take other measures to ensure their transit services remain viable and convenient to as many users as possible. Converting mixed-use lanes to bus-only lanes is the best way to do this. There are going to be even more cars on Seattle roads when these cuts take effect, and commuters that continue using the bus will suffer as much as anyone, stuck in overfull vehicles behind the tens of thousands of cars clogging up local streets.

A majority of the county's drivers have made it clear that they're not interested in paying any additional money to support the transportation network in their cities, even when 40 percent of Prop 1 revenues would have gone to road maintenance. The average driver only pays a few hundred dollars a year in state gas taxes (which haven't increased since 2008), and current vehicle licensing fees are laughable relative to the needs of our transportation network. Transit users, on the other hand, have seen their fares increase by 80 percent in the past five years, or about $600 annually. It's time to turn over some of those roads to those that are actually willing to pay for them. The case has always been strong for more bus lanes in Seattle, but now it's imperative.