How Flexible Parking Requirements Spur Economic Development: Lessons from Santa Monica

Wilshire Boulevard in Santa Monica serves as a border between standard parking requirements (left) and flexible parking requirements (right). Photo via Google Maps.
Wilshire Boulevard in Santa Monica serves as a border between standard parking requirements (left) and flexible parking requirements (right). Photo via Google Maps.

Editor’s Note: Streetsblog Los Angeles founding board member Carter Rubin recently finished his Master of Urban and Regional Planning degree at UCLA. In the following article, he recaps the findings from his capstone “client project” for the Urban Design Studio at the L.A. Department of City Planning. His research adviser was the inimitable parking guru, UCLA Urban Planning Professor Donald Shoup. You can read the report in its entirety here.

It’s hard to imagine today, but Santa Monica’s commercial areas – now home to Silicon Beach, tourism and bustling retail – were sleepy, underperforming and shabby just a few decades ago. In an effort to revive its commercial heart in particular, the city approved millions in funding for municipal parking structures in the heart of downtown. These garages still stand today on streets parallel to the Third Street Promenade.

City leaders hoped that this would create a convenient means for potential patrons to reach the Promenade, allowing them to park once and do all their subsequent shopping, dining and recreating on foot, thus keeping the streets clear of excessive car trips. More easy parking seemed like the obvious fix, but those garages alone weren’t enough to generate the commercial transformation Santa Monica sought.

What Santa Monica needed – and eventually got – was a different kind of parking change. The critical policy was to create a by-right process allowing developers to build, and businesses to operate, with less on-site parking. It was a dramatic break from what is typical of virtually every city in America: require every business to provide abundant on-site parking, free of charge to all its patrons, regardless of whether or not the business deems it necessary.

This new policy would ultimately allow small-scale developers and entrepreneurs to find and implement the most successful uses for those properties without having to worry about whether meeting the expensive minimum parking requirements was practical or cost-effective.

That was the change that would ultimately lead to a vibrant commercial district generating significantly more revenue for schools, libraries, transit and other municipal services.

Santa Monica’s Parking Innovation

In 1986 the Santa Monica City Council approved a business assessment district to fund improvements for the Promenade area. Part of that program included this critical piece: it gave developers the ability to opt out of providing the required on-site parking by paying an annual fee of $1.50 per square foot of floor area added for which there was no parking provided. (In other words, if you provided all the typically-required parking, you paid no fee.)

Further, it allowed changes in a given building’s land use – say, from a nail salon to a restaurant – without triggering the typical increase in parking requirement from one parking space per 300 square feet to one per 75 square feet. If that business is in an older building that takes up most of the parcel, there’s usually no feasible to adaptively reuse that building as a restaurant – or any other business that has a higher parking requirement than whatever occupies the space presently.

Indeed, much of downtown Santa Monica’s building stock predates parking requirements. So many of its charming and historic buildings take up all or nearly all of the parcel. No room to add parking! If the law requires you to add parking to change a land use to a more productive use, and there’s nowhere to add parking, you either have to tear down the building and build strip style parking or underground parking. And the latter is often infeasible for financial and geometric reasons.

So what we saw in downtown Santa Monica pre-1986 is what we see across many commercial districts with small plots of land: storefronts filled with business just eking it out, not because no one would invest there, but because parking requirements make it essential impossible to invest there without getting a costly and politically perilous variance.

Downtown Santa Monica today, as we know, has thriving pedestrian-friendly retail streets filled with successful restaurants and shops. The question that I wanted to answer in my capstone project was: To what extent was 1986’s flexible parking option responsible?

How We Measured the Impact of Parking Requirements

To determine the impact of the making parking requirements more flexible in downtown Santa Monica, I evaluated what was happening along one of the boundaries of the parking district, where on one side you had the flexible parking program and on the other side you had the standard parking requirements still in place.

It turned out that Wilshire Boulevard, that iconic Southland street, was one of those boundary lines. The north side of Wilshire between 2nd Street and 4th Court was a commercial stretch with the standard parking requirements, and the south side was likewise zoned for commercial uses, but with the flexible parking requirements. Thus, comparing the two sides should reveal the impact of the parking requirements.

StudyAreaMap.jpg
The parcels highlighted red had standard parking requirements and the parcels in green had the flexible parking requirements. Photo via Bing Maps and Carter Rubin.

To compare the two sides, I measured a series of variables relating to city finances, parking and urban form. The findings were dramatic.

What We Found

The properties in the flexible parking requirement area generated eight times more sales tax revenue per parcel square foot than the properties in the standard parking requirement area. Not only that, the businesses on those parcels generated all that sales tax revenue with a fraction of the onsite parking. Parcels in the flexible requirement area had an average of 4.4 spaces per parcel, while the parcels in the standard-requirement side averaged over a hundred spaces per parcel.

SalesTaxInfo1.jpg

All that extra parking space meant that an estimated 340,000 square feet of prime Santa Monica real estate – blocks from the palm tree–lined bluffs – was dedicated to meeting standard parking requirements. That total represents about 75% of the square footage of the actual leasable space in those buildings.

ParkingUrbanForm1.jpg

But the impact of parking requirements isn’t limited to just city finances and floor area. It affects the built environment and the street-level pedestrian experience – especially important in an important commercial district.

So I measured the amount of linear street front that was filled with by ground-floor shops and how much was taken up by parking infrastructure like surface parking lots, driveways and garages. On the flexible-requirement side, 80% of the street front was taken up retail, restaurants and shops – all those things that make a shopping district interesting to walk around. In contrast, the standard-requirements side had only 30% of its linear street frontage dedicated to retail. Contributing to this stark difference is the fact that the standard-requirement side had ten times more street front dedicated to parking infrastructure than the flexible-requirement side.

Particularly revealing was the fact that there were six restaurants on the flexible-requirement side versus only one – a small café that was about the change locations – on the standard parking side. Why does that matter? Restaurants typically have among the highest parking requirements because of their high customer turnover, so they serve as a good “indicator species” for whether a higher parking requirement is precluding certain business. In Santa Monica’s case, an array of successful restaurants in the flexible-requirement study area – i.e. T’s Thai, California Pizza Kitchen, P.F. Chang’s and Hillstone – also generate a lot of sales tax revenue and employ a lot of people.

Conclusions, Implications and Recommendations for the City of Los Angeles

So, one side of Wilshire Boulevard has lots of thriving businesses, less on-site parking and a more pleasant pedestrian environment. The other side has fewer businesses and more parking, including surfacing parking lots two blocks from the Ocean. It’s easy to imagine that an entrepreneur could find a more valuable use of that land if they had the flexibility to develop that lot, which they currently do not.

Since the City of L.A. was the client for my “client project,” I wanted to be able to answer the question: What can L.A. learn from this? What neighborhoods would benefit from a more flexible parking requirements?

An obvious candidate for this type of intervention would be Westwood Village, a similarly once-thriving commercial district with older building stock where onerous parking requirements help keep storefronts vacant today.

Additionally, many of Los Angeles’ commercial boulevards are lined with older, pedestrian friendly storefronts. As Mott Smith showed, these buildings cannot be re-purposed without providing the now-required parking or seeking a costly, risky variance; providing that parking in a cost-effective manner often means turning older, pedestrian-friendly shops into strip mall or drive-through Taco Bell type establishments.

Los Angeles could implement an ordinance that allows the adaptive reuse of existing buildings — without having to meet outdated parking requirements — on boulevard commercial stretches. This could be modeled after the adaptive reuse ordinance that has helped transform downtown L.A. into a more livable, prosperous community. After all, almost of all of Los Angeles’s great commercial boulevards – Wilshire, Van Nuys, Pico, Vermont, Crenshaw, etc. – are served by frequent bus or rail service and are surrounded by fairly dense walkable neighborhoods.

These are exactly the areas where we don’t need to require every business to operate as if every patron will drive alone in a car. On the contrary, we should be encouraging trips by foot, bike and transit in these neighborhoods. In fact, our decades-old parking requirements have encouraged driving and traffic, and they have degraded the pedestrian environment.

With a new Mayoral administration in place and a comprehensive zoning code rewrite in the works, now is the perfect time to make Los Angeles’s parking requirements more flexible, so we can build the livable, walkable and prosperous communities L.A. deserves.

  • Kenny Easwaran

    This looks like a great natural experiment! Can you tell whether businesses on the flexible parking side are taking advantage of a city garage nearby, and if so, whether that garage partially offsets some of the increased tax revenue or increased business street frontage? I assume there is some offset, but that it is not very much, because even so, all the businesses can share one tall parking structure instead of each having their own lot with its own entrance. But if these businesses on the flexible parking side are instead attracting customers on foot, bike, or transit, then it’s even better!

  • Carter Rubin

    Kenny, I think your instincts are right, although I didn’t really attempt to quantify those things. It’s important to remember that businesses on both sides of Wilshire benefit from access to these parking structures. In fact, there are now public lots on both sides of Wilshire. So if we ascribe some public parking structure frontage to the businesses in the flexible-parking side, I think it’s only fair to allocate a part of that impact to the standard-parking side too.

    -Carter

  • Like Kenny, I love these type of natural experiments. Reminds me of an even better version of the one Chuck Marohn did at Strong Towns a few years ago. Have you gotten any feedback from Santa Monica/L.A. about expanding these flexible parking regulations, or scaling back existing regulations? And do you have any data on the share of patrons to these various businesses, as well as employees there, that get there by car and by other modes?

  • Anonymous

    Great job. It’s frustrating when new ideas are already proven to be good ones, yet we still have resistance and inertia in getting them adopted. Come on, LA, let’s do this already!

  • jeanne c. davis

    Livable for whom? Walk-able for whom? It’s impossible to park anywhere near downtown SM on weekends. It’s impossible to walk on 3rd street on the weekends. I’ve lived here 25 years and the quality of life for the residents has plummeted while business has taken over. It’s disgusting..

  • Carter Rubin

    Jeanne,

    I appreciate you sharing your opinion. I agree that downtown Santa Monica has become congested with autos on weekends, which is why I usually avail myself of the alternatives (bus, bike, walk) when I go downtown from my apartment in Ocean Park.

    I want to add that the result of all this extra activity and commerce is more revenue coming into the city to pay for the great city services we enjoy. I have a great transit system, public gym, library and park all within a mile of me. All of that is thanks to the tremendous tax revenue generated by a bustling, even crowded, downtown area.

    That is a trade-off that I accept and appreciate, but I can understand why you or others might not feel that way.

    Thanks for reading.

    Best,

    Carter

  • Niall Huffman

    I have parked a car smack in the middle of downtown Santa Monica on the weekend on multiple occasions in the past couple of years. I had no trouble finding a space, because I paid to park in a garage. It didn’t cost me very much, and I was glad for the convenience of being able to find a spot quickly. Of course on-street parking is difficult to find; it’s a classic tragedy of the commons — that’s what happens when you set too low a price on a finite resource or give it away for free. The solution is not to tear down productive retail space; it’s to manage the finite supply of on-street parking more effectively with pricing that reflects the high level of demand and thus encourages turnover.

    “Impossible to walk on 3rd street on the weekends” is a wild exaggeration. It’s a popular destination and there are a lot of people there, but I’ve walked from end to end of the 3rd Street promenade many times on a busy, sunny Saturday afternoon and never had a problem. Perhaps you dislike crowds and wish there were fewer people patronizing the businesses there, but that’s a matter of opinion and doesn’t relate to the functionality of the street for walking.

  • Mark Cosby

    People and their first-world problems. Sheesh. I live in Santa Monica and I love my life. Some people cannot even live where it’s room temperature every day and their smog gets blown eastward towards their less affluent fellow Angelenos without complaining. I don’t want to get old if that means that when I do I will look around me and see change through the lenses of my crap colored glasses. Can’t park? Take one of the dozens of buses that serve Santa Monica. Can’t walk on 3rd Street on the weekend? Why? Someone might invade the city block radius that you’re personally entitled to? This crybaby stuff has just gotten to be nauseating.

  • As a Santa Monica resident I never personally drive into downtown, I walk if I have more time, or bike, but when I am with company that insists on driving into DTSM I use the ParkMe app (with real time parking data) and direct them to the closest garage with more than a hundred spaces open, and there is pretty much always at least 1 or 2 garages with hundreds of spaces left.

    The Santa Monica Public Library garage, which is avalible for all public use, not just library patrons, is usually my go to spot when with someone with a car, and I can’t recall ever seeing it with less than about 200 spaces open when ever I’ve gone.

  • Brian H.

    It’s so crowded, no one goes there anymore.

  • Great post. I’m circulating this study locally as a City group has begun a Parking Plan for Corona del Mar in Newport Beach.

  • Les Miklosy

    Can you post the total parking revenues (on-street, garaged, metered) for the two categories standard side, flexible side? If we argue the city parking revenue for garages is a wash because the garage costs money to build, then the on-street parking revenue is the interesting one for comparison. Laguna Beach is presently in debate over a very expensive parking garage planned to serve the festival.

  • Niall Huffman

    Laguna Beach’s art festivals would greatly benefit from a regional shuttle system similar to the Hollywood Bowl’s. The festivals currently run local shuttles up the canyon and along PCH to some remote parking lots, but it would be great if there were charter buses serving farther-flung areas. Perhaps the Irvine Spectrum and some of the office parking structures near John Wayne Airport could serve as pick-up points. The office buildings surrounding Fashion Island probably have a lot of unused parking on weekends and evenings, as well. No need to build ugly parking garages in downtown Laguna.

  • Phil Orr

    Carter,

    Where does the $1.50 per square foot of floor area go? Is this included in the tax revenue difference of is it separate to it and additional to the tax revenue estimates you’ve outlined?

  • Expo Rida

    It would be interesting to see once the Expo Line Phase II is open how long it will take to see the parking lots with fewer cars. People may give the stink eye to buses, but hopefully the Expo line in Santa Monica will be a game changer.

  • Troy

    There is a public parking garage on the standard parking side of Wilshire, on 4th street. On busy weekends this garage always have 100+ parking spaces available, while the closer garages are near capacity. It makes it easy to find parking even on the busiest weekends and as an added bonus, the parking lot is mixed use, with apartments above it. Great job Santa Monica.

  • Marshall

    Studying that area for the impact of relaxing parking requirements is very misleading, because of the ample public parking nearby. If you are advocating building large public parking structures and then relaxing the requirements in an area nearby them, I think that’s a great idea. But if you were talking about relaxing requirements in an area with limited public parking, and having store owners depending on people to take a bus to their store, I think the numbers you show above would look very different in that case.

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