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Originally Posted by ahealy
Thanks LoneStar....I remember reading that now. It would be wise for the city to revise that in a way that rewards them for not including so many spaces. I think most of us can agree there is nothing sexy or timeless about having 8 levels of parking attached to any building. I always wonder what the garages will be used for in the far future....Small aliens? Robots?  |
Unfortunately, at this point in time there isn't a city incentive that will offset the higher rents and higher occupancy a downtown office building can achieve with more parking. Tax breaks, subsidies or even cash payments are not enough - the higher rents and occupancy are ongoing for the life of the building (until our transportation issues are resolved, anyway) and unlike incentives they transfer with the sale of the property. Buildings with higher parking ratios sell for more money. Truth is developers are in it for a reasonably quick return on investment - whether it be increased operating income (rents) or higher sales price - and they are not generally interested in the long-term. If it makes them more money, they will continue with high parking ratios. Until Austin increases its public transportation options, parking is going to be valuable for office buildings. And for the record, I'm not disagreeing with you guys or saying I support including lots of parking in new office construction, I'm just stating why it is so prevalent.
Something else no one mentions is the significant parking income generated by downtown office buildings. Unlike suburban office buildings, all downtown buildings charge for parking. Landlords charge the tenants of their buildings between $150 and $300 per parking space, per month. That's a huge revenue generator for a building owner. Add in the transient parking (aka the in-and-out paid parking after hours, etc.) and you are talking some serious cash flow. How do you convince a developer who is trying to maximize his return on investment that he should give that up? It's tough.
When we solve our traffic issues and high parking ratios don't lead to premium rents anymore, you will see developers more willing to reduce the parking in their properties.