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For decades, a sea of parking spaces was a non-negotiable feature of new American housing. However, a fundamental shift is underway. The construction of parking spaces for new residential properties in the U.S. has been in a steady decline since peaking in 2012, a trend driven by changing city policies rather than fluctuations in car ownership or gas prices. This move away from mandatory parking minimums is lowering construction costs and enabling the creation of more housing, particularly in urban areas.
For most of the 20th century, U.S. cities implemented minimum parking requirements. These are zoning laws that made it illegal for developers to build new housing without also providing a specific, and often arbitrary, number of off-street parking spaces. The concept originated from planning studies conducted decades ago that measured peak parking demand, such as at suburban shopping malls on Black Friday. The goal was to ensure there was always enough parking, even if it meant the vast majority of spaces sat empty for the rest of the year. This one-size-fits-all policy was applied universally, even to areas with excellent access to public transit, walking, and biking.
The mandate to build parking significantly increases the cost of new housing. Constructing parking, whether in surface lots or expensive structured garages, adds substantial expenses for land, concrete, and materials. These costs are inevitably passed on to homebuyers and renters, regardless of whether they own a car.
For example, an analysis of Redfin data from Seattle demonstrated that a single parking space can increase the price of a new home by approximately $50,000. Based on U.S. Census data, this additional cost is greater than the annual income of 38% of Seattle households. This is particularly impactful considering that over one-third of Seattle households do not own a car, meaning these residents are effectively subsidizing a costly amenity they do not use.
A growing number of cities, from New York to Seattle, are leading a change by relaxing or completely eliminating these outdated parking mandates. Instead of dictating a minimum number of spaces, they are allowing developers to determine how much parking is economically justified for a specific project. This policy shift unlocks valuable land previously dedicated to empty parking spots for actual housing.
The results are clear. In downtown Los Angeles, the relaxation of parking minimums directly preceded the construction of approximately 6,000 new housing units—a development pattern that would have been illegal under the previous rules. On smaller urban infill lots, it becomes financially and logistically feasible to build more homes when the project isn't required to also accommodate a large parking footprint.
The decline in parking construction is not a temporary dip like those seen after the 1970s oil shocks. It represents a structural change in urban policy. For 2017, data indicated it would be the fifth consecutive year of reduced parking per bedroom in new homes. This trend is expected to continue as more cities adopt parking reforms.
The primary driver is no longer car ownership costs, but a conscious policy choice to reduce housing expenses and encourage smarter land use. This approach gives consumers more choice, allowing them to decide if they want to pay for a parking space rather than being forced to.
Based on our experience assessment, the key takeaways for home buyers and urban residents are:
While the change may be most visible in major cities, the policy shift is spreading, signaling a long-term reassessment of the relationship between housing and the automobile.
