[+] ‘Carmageddon’: Developers Grapple with Future of Parking

The days of paving paradise and putting up a parking lot may be all but dead. However, car-centric planning regulations with minimum parking requirements that have been standard practice since the 1950s continue to shape our cities. Behind the hoardings in the excavated depths of high-rise development sites, the number of carparking spaces is still on the rise in Australia. And no matter what side of the street of the urban planning debate you look, there are warning signs in both directions. With every shiny shovel sod-turning for a new tower project it is predicted our cities are moving ever closer to what has been dubbed “Carmageddon”. On one side, it is deemed that if planning regulations continue to be based on private car ownership—and the need for increased parking—our urban landscapes will quickly run out of space as well as face worsening traffic congestion and pollution. On the flipside, however, it is argued that—with car ownership continuing to edge up in Australia—if off-street parking requirements for developments are removed or even reduced, the increased demand for on-street parking will lead to many areas becoming parking basketcases. Carparking provisions in proposed developments are already the focus of hundreds of planning appeals each year. And if you ask most drivers they will tell you in no uncertain terms how difficult it has become to find a park in our cities. ▲ Carparking remains a thorny issue for developers, government authorities and motorists. However, research indicates that perception does not necessarily meet reality, particularly when it comes to off-street carparking left unused. Nonetheless, the vexing question remains—how much carparking space is enough? Feeding the debate are two significant and prevailing challenges—escalating construction costs and a worsening housing affordability crisis. Five years ago, it was estimated a carparking space added $50,000 to the cost of an apartment but that has since doubled to between $100,000 and $110,000, exacerbating the affordability issues. With each carparking space occupying between 12sq m and 35sq m—bigger than most bedrooms—it is a sizeable and expensive trade-off for other land uses such as much-needed housing. The average one-bedroom apartment in Australia is about 50 square metres. In the City of Melbourne municipality alone, it is estimated total floor space dedicated to parking is the equivalent of 225 MCG sporting stadiums, much of it residential and up to 40 per cent of the spaces unused on most days. But along with its northern rival Sydney, the Victorian capital is among a growing cohort of cities around the world rethinking their approach to carparking policy. Minimum parking requirements mandate a certain amount of parking spaces that must be allocated to new homes, based on the number of bedrooms. They have been driving up housing costs since they were first implemented during the post-war boom in car ownership. In many countries—including the US, where the car-centric culture has created enough parking spaces to pave the entire state of Connecticut—these rigid ratios are now being scaled back or eliminated to enable more affordable homes to be brought to market. ▲ Dr Chris De Gruyter from RMIT University’s Centre for Urban Research. “We’re quite behind in Australia,” Dr Chris De Gruyter from RMIT University’s Centre for Urban Research tells The Urban Developer . “It’s barely changed from the 1950s, we’ve still got these minimum carparking requirements … and they are resulting in an oversupply of carparking.” From the data of a recent survey undertaken by RMIT of more than 1300 apartment residents across Melbourne, Sydney and Perth it was concluded more than 100,000 carparking spaces were sitting unused in the three cities. And staggeringly, its calculations estimated the price of those empty parking spots was costing residents more than $6 billion. “That’s actually a very conservative figure,” De Gruyter says. “It’s probably likely to be more than that.” He says the study showed the oversupply was not just an inefficient use of space but was exacerbating housing affordability issues. “It shows there’s a need to introduce policies that facilitate unbundling of carparking from the purchase price or the rental cost of apartment housing, so that people can purchase or rent the number of parking spaces they actually need or want. “That way the cost of their housing would be cheaper because they’re not having to pay for a parking space they won’t use.” De Gruyter says although uncommon in Australia, the concept of unbundled carparking did have broad support from the property sector, including for new office and residential developments in North Melbourne’s Ardern precinct. ▲ Brisbane-based town planner and Wolter Consulting Group executive director Natalie Rayment. The RMIT study found that 20 per cent of households had too much allocated parking while 14 per cent did not have enough. It also showed that 13.4 per cent of households did not own a car but were still allocated a parking space. Brisbane-based town planner and Wolter Consulting Group executive director Natalie Rayment agrees, but says it will take more than more than the unbundling of carparking to resolve the parking issues in the Queensland capital. While its southern counterparts and other major cities around the world have moved to “rightsize” their carparking requirements, Brisbane has put its foot to the floor in the opposite direction. Under controversial city plan amendments, minimum carparking requirements were increased in the Queensland capital for all multiple home developments outside the CBD and inner-city frame in 2020. “And this was at a time that in many developed nations around the world, they were starting to do the exact opposite,” Rayment says. The move, she says, went hand-in-hand with a ban on townhouse developments in low-density residential areas “responding to that NIMBY mindset to protect the suburbs from an intrusion of new development”. Significantly, carparking requirement reductions for development within 400m of major public transport facilities such as suburban train, ferry and busway stations were also removed. “I think that’s where Brisbane really fell down and set itself aside from what’s happening in other cities,” Rayment says. “On average the carparking requirements went up by 40 per cent, depending on the home size, and that has contributed to a lot of those projects just being unviable to deliver now.” ▲ Carparking requirements in the Queensland capital are reducing the capacity of the industry to deliver housing, according to Fortis’s Daniel Bowman. Sydney-based developer Fortis is still forging ahead with its Queensland expansion but associate director Daniel Boman says increased carparking requirements had “greatly reduced the capacity for the development industry to deliver new apartments in the middle-ring suburbs of Brisbane”. “And where sites are 1 to 2km from retail amenity or frequent public transport such as buses, trains and CityCats it just makes sense that less carparks could be allowed.” Rayment says for the high-end product and in the more expensive suburbs “it doesn’t seem to be a problem to meet the carparking requirements”. “However, it’s definitely affecting the supply of more affordable housing product and contributing to that cycle of the housing crisis we’re now in.” But she adds: “It’s not just that were moving into an era of housing affordability. We’ve got new mobility methods. We’ve got Uber, we’ve got electric scooters, we’ve got better bike paths and all these green bridges going in. “Every other policy that the council talks about is all about green and active transport, except for the carparking rules. “Basically, if you build it they will come. If you give people more carparking, then it encourages them to have more cars and to drive everywhere. And so it’s like a self-fulfilling prophecy.” Meanwhile, in Melbourne, proposed changes to the city’s planning scheme to foster sustainable development in the CBD includes a progressive clause for “the retention of carparking spaces as common spaces”. Architecture studio Fender Katsalidis associate director Shem Kelder says the amendment will make it easier to repurpose carparks in a future where autonomous cars inevitably limit the need for parking spaces. “MCC are actively pursuing a future for Melbourne’s CBD with fewer cars, and there is so much potential to be unlocked in the adaptive reuse of parking spaces beyond the conventional solutions like office space or apartments—such as urban farming, aquaponics, co-working spaces and grey kitchens for food production. “We are genuinely excited about what these spaces have the potential to be and do for Melburnians.” ▲ Unlocking the potential for the adaptive reuse of parking spaces beyond the conventional solutions such as office space or apartments is already being explored. “We are in interesting times where society is changing, community attitudes are changing and the way people move about is changing,” air taxi infrastructure company Skyportz founder and chief executive Clem Newton-Brown says. “Air taxis will be part of that mix … and with the sharing economy and the gig economy I think we’re already seeing a changing dynamic and potentially a reduction in terms of carparking requirements. “Kids these days are less likely to own a car. They’re happy to have transport as a service rather than owning a car and, generationally, that is the biggest factor which is going to dictate requirements for parking.” But according to Gold Coast-based Zone Planning Group director David Ransom, in the current uncertain and challenging times it is not millenials, Gen Zs, developers, town planners, urban futurists or even local councils who will be determining how much carparking is enough. “Any town planner would say if you have a city that requires less use of vehicles … is weaning people off cars and concentrating them in areas that have good public transport, that’s a good thing and a reason to provide less carparks. “But at the moment, the right answer is whatever ensures the viability of your project. “So it really depends on the attitude of the banks and the valuers. “If you try to sell a unit that doesn’t have its own exclusive carpark, then the valuers will write it down and the banks will lend you less. So that’s a reason people don’t do it. “I don’t know whether there’s a difference between the way the banks and valuers deal with Queensland as opposed to say Sydney and Melbourne but that’s pretty much the way it works up here. “It’s not to do with any planning philosophy or anything like that. It’s to do with whether the market is going to accept what you’re doing and are you going to sell the units. And if you’re not, then it’s the wrong answer. “The right answer is whatever the market says the right answer is. “And at the end of the day, it’s to do with the banks and the valuers. They’ll decide.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] ‘Carmageddon’: Developers Grapple with Future of Parking

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