Parking Reform Measure Strains Relationship Between Infill Developers, Housing Advocates

 

There was a time when the biggest opponents to infill development were the interstate highway, the barbeque grill, and the American dream. Following the failure of Assembly Bill 710, you might be able to add advocates of affordable housing to the list.

Sponsored by Assemblymember Nancy Skinner (D-Berkeley), AB 710 sought to promote infill development by requiring cities to lower baseline parking requirements for residential and commercial development in transit-intensive areas statewide. It would have halved the common practice of requiring two spaces of parking per residential unit or 1,000 square feet of commercial space.

 

Though cities set their own standards, parking requirements are typically derived from the Institute of Transportation Engineers’ Parking Generation. Those standards are meant to apply nationwide and include what some consider absurdly detailed recommendations that overestimate parking needs and are insensitive to urban context. They are outdated at best, say AB 710's supporters.

 

“It’s very difficult for cities to change these parking standards because they’re based on mythology,” said California Infill Builders Association (CIBA) board member Mott Smith, a Los Angeles infill developer. “If they were based on facts, we could have an easy conversation about what the facts are and adjust accordingly.”

 

Opposition came from, what many consider, a highly unlikely source: advocates of affordable housing. Housing advocates such as the Southern California Association of Nonprofit Housing (SCANPH) contended that AB 710 would undermine what they consider important incentives in Senate Bill 1818, the 2004 law that gives both nonprofit and for-profit developers density bonuses for including or increasing affordable housing in a given development. One of those incentives trumps local parking codes by allowing developers to supply less than the typical two spaces per one-bedroom or studio unit in exchange for the inclusion of affordable units.

 

“We have 30 years of history with density bonus law that recognizes the value of trading a planning concession, whether it be height, density, or parking for supplying the mix of incomes in a project,” said Lisa Payne, policy director at SCANPH. “This bill would have removed that tool.”

 

Julie Snyder, policy director for Housing California, said that she did not doubt that lowered parking requirements would make development less expensive. But she questioned whether those savings would be passed on to residents. 

"While we agree with the basic concept of ensuring communities are not 'overparked,'" said Snyder, "we believe this policy should be crafted in concert, rather than in conflict, with state policies that achieve valuable housing affordability goals."

Affordable housing advocates were not, however, the only opponents of AB 710. The League of California Cities also expressed concerns that it amounted to an undue imposition on cities in an arena where cities generally enjoy local control.

 

“It was a one-size fits all mandate,” said League legislative representative Kirstin Kolpitke. “We feel that it doesn’t address the needs of each individual community. If local officials decide to build in a green or SB 375 manner, their reward for creating the transit-intensive area is that they’re stuck with the requirements of the bill.”

 

AB 710 is, thus far, the signature effort of the fledgling CIBA, which formed last year to promote high density development in urban areas. Smith and CIBA president Meea Kang said that AB 710 was written to benefit nearly every conceivable constituency, including developers of all stripes and cities that are seeking to take advantage of infrastructure investments. With some parking spaces costing up to $30,000 each to develop, the bill stood to stimulate development amid California's malaise.

 

AB 710 would not have imposed maximums. It would have forbidden cities from using the current standards as minimums, which have in recently years been vilified by scholars and activists alike.

 

“There is a strange affinity we have to cars, which represents everything like freedom and the American way,” said Kang. “As a result, we find ourselves in this dysfunction where we know we have to build inside cities.”

 

In his 2005 book The High Cost of Free Parking, UCLA planning professor Donald Shoup traced nearly every urban evil plaguing American cities to what he considered an overabundance of parking spaces--which, he said, causes cities to expand outward unnecessarily and inflates the cost of real estate. The so-called "Shoupista" movement has, since then, been waging battles large and small to undo economic distortions caused by legally mandated free parking.

 

Shoup supported AB 710 and lobbied for it alongside its chief backers from the CIBA.

 

“AB 710 would have, in one fell-swoop, reset the default parking standards that are in place throughout California and the English-speaking world with sensible urban standards,” said Smith.

 

Those standards are not so sensible to a vocal group of affordable housing advocates, who fear that AB 710 would undermine established incentives for inclusionary density bonuses.

 

Smith stated that AB 710 could have reduced developers’ costs enough to jump-start projects that currently do not pencil out. They recently conducted a survey of both market rate and large affordable developers that, Smith said, revealed $7.5 billion worth of projects that could have been stimulated by AB 710.

 

While many developers were elated by the prospect of AB 710, environmentalists cheered it as well. AB 710 was intended to complement Senate Bill 375, which calls on cities to develop more intensively around transit in order to reduce vehicle miles traveled and, as a result, greenhouse gas emissions.

 

“It reduces the cost of housing development around transit stations, therefore making it easier for people to live near transit, making it more affordable to live near transit, making it easier for developers to build the kind of housing the market is demanding and making it easier to develop walkable communities,” said Amanda Eaken, policy director with the Natural Resources Defense Council.

 

Others simply see it as good urbanism.

 

“Purely from an urban design standpoint, it makes all the sense in the world,” said Los Angeles-based architect John Kaliski.

 

The bill made a triumphal run through the State Assembly, passing with no opposing votes. It ran aground in the Senate, however, falling two votes short of the 21 needed for passage.

 

The production of affordable housing is generally seen as a nearly perfect complement with infill and transit oriented development. Infill development generally results in dense, accessible, and relatively inexpensive units that fit the budgets of low- and moderate-income residents.

 

"People have to look at creative ways to take advantage of infrastructure and try to reduce the costs of producing housing next to it," said Kaliski. “The smart growth advocates and the housing advocates should be natural allies.” (Kang, Smith, and many other members of CIBA produce affordable, as well as market-rate, housing.)

 

The wholesale reduction of parking requirements in transit-intensive areas would constitute, say AB 710's opponents, a recipe for gentrification. It would, therefore, contradict the purpose of state-supported affordable housing development.

 

SCANPH's analysis of AB 710 concluded that reduced parking requirements would eliminate the advantage that SB 1818-compliant units would confer on developments. Market-rate developers would, therefore, have relatively less incentive to produce anything but high-end units that would be unaffordable for low-income, transit-dependent residents.

 

“We’re all interested in creating sustainable communities,” said SCANPH executive director Paul Zimmerman. “But you can’t have a sustainable community unless you’ve got equity in the way the land is developed. You can’t have a sustainable community if you force out the affordable housing that exists because you’re pushing out core transit riders.”

 

Infill advocates say that this interpretation is preposterous. At the most abstract level, they claim that more housing in the aggregate will, by definition, result in more affordable housing. As a practical matter, the very same incentives that AB 710 gives to market-rate developers will apply equally to developments that are affordable, either in part, or in whole. Moreover, they claim that SB 1818's parking provision--or the absence thereof--will have a negligible effect on for-profit developers and zero effect on nonprofit developers.

 

Zimmerman said that since 2008, the SB 1818 parking provision has spurred the development of 108 units in the City of Los Angeles, plus 45 more in a recently completed development south of downtown. The state Department of Housing and Community Development has estimated that the city’s housing deficit grows by over 28,000 units per year.

 

AB 710’s backers say that reduced parking requirements would stimulate housing development by all kinds of developers, simply by cutting in half one of a builder’s biggest costs.

 

“No one policy move is going to trump the economic climate,” said Bill Witte, president of Related Cos. of California, a nationwide for-profit developer that often builds affordable housing. “But I think you’re in a situation where every little bit helps.”

 

Zimmerman rejects this rationale, saying that anything that benefits market-rate developers necessarily compels them to produce high-end units in exactly the wrong places. He cited a recent study by the Dukakis Center on Urban and Regional Policy at Northeastern University in Boston that found that high-end development has tended to push out residents in new transit-intensive areas nationwide.

 

“The savings to the developer of not including the parking is not going to result in a reduction of sales price or rent,” said Zimmerman. “There has to be a link between a developer’s financial pro forma and the sustainability of that neighborhood by providing housing at lower price points.”

 

That same report, however, lists the reduction in parking requirements as a strategy for counteracting the march of gentrification. The institute’s namesake, former Massachusetts Governor Michael Dukakis, a visiting professor at the Luskin School of Public Affairs at UCLA, supports AB 710 and disavowed SCANPH's interpretation of the report in a July 6 email to Sen. Lois Wolk. Dukakis himself was not, however, involved in writing the report.

 

The idea, therefore, that parking reform should depend on SB 1818 and be conflated with the state’s affordable housing crisis, rankles AB 710’s supporters. Witte, in fact, claimed that some affordable developers use SB 1818 as a bargaining chip with public officials. 

 

“This is completely disingenuous.  They objected to AB 710 because they felt it would take away one of the tools they have to negotiate community benefit agreements on a one-off basis,” said Witte.  “That is not how you do planning. That is not how you do development.”

 

The League’s Kolpitke explained that lower parking requirements might shift the burden of storing cars to city streets, which may or may not be equipped to handle an overflow. She also said that cities might shy away from creating transit-intensive districts because they would not want to accept the lower parking requirements. 

 

AB 710 would have allowed cities to use more parking-intensive standards if circumstances warranted them. However, she said AB 710’s provision allowing cities to adopt higher parking requirements amounted to an undue burden. That solution did not satisfy the League. 

 

“Cities don’t exactly have an overflow of cash to be able to do studies and jump through so many hoops that it becomes impractical to exempt themselves out of,” said Kolpitcke.

 

The League lobbied actively against the bill as it was being considered by the Senate. 

 

The League’s efforts to block AB 710 come after a string of painful defeats that cities say they have suffered at the hands of Sacramento. The devolution of state functions to the local level and, most notably, the threatened disillusion of the state’s redevelopment system has put cities and the state at odds with each other like never before.  

 

“There’s a huge locals-versus-state battle that’s brewing these days, with everything from Prop. 26 to the dissolution of redevelopment agencies,” said Casey Daily, assistant to the mayor of the City of San Bernardino, which supported AB 710. “There’s a whole lot of friction between state and locals.”

 

As a result, many say that cities were not willing to accept another mandate from Sacramento, even if that mandate has the backing of many progressive planners.

 

Ultimately, AB 710’s backers say they are encouraged by the support that the bill received and that they will return next year with a new version of the bill. Throughout all the discussions over AB 710, Smith said he was encouraged by the response to the bill’s fundamental purpose.

 

“We’re saddened that AB 710 went down, but it didn’t go down because people thought we don’t have enough parking, and it didn’t go down because people think infill is the wrong direction,” said Smith.

 

Contacts:

 

Amanda Eaken, Natural Resources Defense Council Deputy Director, Sustainable Communities 415.875.6100

 

Casey Dailey, Assistant to the Mayor, City of San Bernardino, 909.384.5211

 

John Kaliski, Principal, Urban Design Studio, 213.383.7980

 

Kiristin Kolpitcke, Legislative Representative, League of California Cities, 916.658.8200

 

Meea Kang, President, Infill Builders Association, infill-builders.org

 

Lisa Payne, Policy Director, SCANPH, 213.480.1249

 

Mott Smith, Director, Infill Builders Association, infill-builders.org

 

Bill Witte, President, Related Cos. Of California, 212.801.1000

 

Paul Zimmerman, Executive Director, Southern California Association of Nonprofit Housing, 213.480.1249