Miami’s Parking Deregulation Will Reduce Housing Costs

One of the great thought experiments in modern urban planning is to consider just how much cheaper life would be if the government didn’t enforce minimum parking requirements. Academics like UCLA professor Donald Shoup, for example, have noted that these mandates raise construction costs for housing, retail and office space, especially in dense cities, where building parking is both more expensive and less necessary. For this reason, several cities have deregulated at least certain aspects of their parking codes. Miami has done this for much of its new housing stock, and appears to be reaping the benefits through cheaper and more abundant units.

This began in 2010, when the city passed Miami 21, a form-based code that, among other things, waived minimum parking requirements for newly-constructed buildings downtown. According to an MIT study written four years later, this dramatically reduced construction costs and produced a boom in high-rise development, including several projects without parking facilities period. But the more crucial move may have occurred in October of 2015, when city commissioners passed an amendment exempting certain small developments outside downtown from parking requirements as well. Buildings would have to be under 10,000 square feet, within walking distance of intensive transit corridors, and away from single-family areas, where they might produce spillover traffic. Before then, such buildings were required, like others in Miami, to provide 1.5 parking spaces per residence. Now, the parking deregulation concept will extend to many of Miami’s interior mixed-use neighborhoods, such as Wynwood and Little Havana.

The move was backed by a consortium of developers, architects, and pro-urban activists, most notably Andrew Frey. Before the changes, Frey was working for CC Residential, a company that focused on suburban development. But as a Miami local, he wanted to promote good urban design within the city center, and aspired to open his own small firm dedicated to this. The only problem, as he explained recently by phone, was that parking requirements were making such construction impossible.

 Take Little Havana. Like much of Miami, this neighborhood just west of downtown grew largely during the 1910s and 1920s, an era of minimal land-use regulation. This produced a neighborhood dominated by Spanish Revival and Mediterranean center-hallway buildings that housed 18 to 20 units on small lots. This moderate density has long enabled Little Havana to support urban street life, much as similar development patterns have in nearby South Beach and Coral Gables. But by the 21st century, many of Little Havana’s remaining unbuilt lots had been downzoned to allow only a handful of units–and developers were required to provide 1.5 parking spaces for each unit. This, explained Frey, made Little Havana’s traditional development pattern virtually impossible on most lots, leading to two alternative forms. Builders could erect either small one- or two-unit residential buildings; or they could request huge upzonings, since large towers are the only structures that can house many units and many parking spaces on a small lot.

“In the past, it’s been about land assembly, speculation, demolition, delay and building massive condo towers,” Frey said about Miami’s development climate. “The parking requirements force you to go big.”

Many of Miami’s smaller developers couldn’t get financing for large towers, and didn’t want to under-utilize their land by building small. So they just left their land fallow, explaining many of the empty lots found on or near Miami’s strategic commercial corridors. Meanwhile, said Frey, these regulations were preventing Miami from providing the “missing middle” for housing—small apartments in moderately-dense urban settings for singles and young families.

Working with one of Miami’s zoning administrators, Frey drafted the amendment that would eradicate parking requirements for these smaller buildings. Not long after the amendment was passed by city commissioners, he founded his company, Tecela Real Estate Innovation, bought a lot in Little Havana, and started constructing a two-building complex. True to his design sensibilities, the project will feature 8 units that have an average square footage of only 886 square feet; will dedicate no space to parking; and will abut the street, adding to Little Havana’s preexisting urban fabric. When the project is complete in a year, it should also serve as a case study in how parking deregulation can create affordable housing. While Frey was unsure yet about what kind of rents the building would command, he estimated that building structured parking–in this case 12 spaces, under the previous regulations–would have cost $300,000, or $25,000 per space. This, he said, would have added roughly $330 per month to average rents, an uptick that he would have been unlikely to command in the working-class immigrant neighborhood.

Similar estimates were made by Carlos Fausto Miranda, owner of Fausto Commercial Realty. He is a Miami property owner and developer who focuses on Little Havana, prefers dense urbanism, and has thus also publicly advocated for parking deregulation. He, too, said that parking spaces cost $25,000 each to build, and for his properties, have added $240 per month to rents. Like with Frey, the cost reductions resulting from the recent parking deregulation have led to immediate changes in his strategy. As he wrote by email:

This change has permitted me to alter building designs.  I’m currently rolling out a line of co-living and micro-unit buildings, designed specifically for millennials, that will plug them into the culture of walkability and public and alternative transportation.  These will be built in lower-income urban core neighborhoods that are literally a 5-minute walk from the densest epicenters and the glittering skyscrapers that have characterized Miami’s recent development boom.

Indeed, the ability to appeal to urban-oriented young people was an emphasis for both developers, who are themselves young. They envisioned their potential clientele as working-class or professional-level Millennials who either don’t own cars, or seldom use them, meaning they could park them in remote places. Instead, this group would get around on a day-to-day basis via walking, transit, ridesharing or bicycling. For decades, this car-free consumer base has nonetheless been forced to foot the indirect costs of parking requirements that are imposed upon developers. But thanks to deregulation, they will have an option that exists outside of the previous paradigm.

The deregulation, said Frey, will also help smaller builders, who were previously forced to sell to larger companies, since regulations prevented them from maximizing on their land.

“Hopefully with the parking exemption,” he said, “all these small property owners can keep their land, to participate in the revitalization of their own neighborhood. If they choose to sell out, it’s their own choice, not because they were forced to by parking requirements.”

By Scott Beyer,