shared parking creates revenue

Nobody likes to see spots in a permitted lot sitting empty as they circle looking for an available space.  At least a “Garage full: monthly permit holders only” sign tells us someone is either using those spaces or paying for them.

By using a shared parking approach, parking authorities can eliminate the empty spots when demand for spaces exists.

Shared parking is the use of parking spaces by multiple groups who want those spaces during different days and times.  It is most common in downtowns and areas of mix-use development; however, it can be successful in other areas where density is high.  What is typical however is that the area has a demand for parking throughout the day and during most days of the week.  A common example is a downtown office space with underground parking that is used by employees during the day, movie and restaurant patrons in the evening, and downtown shoppers on the weekend.

It can be complicated, but doesn’t have to be

There are many shared parking scenarios with multiple combinations of public and private groups. The Urban Sustainability Directors’ Network convening findings in the spring defined some common models for shared parking that can involve both the private and public sector:

  • Facilities are available to the public always
  • Facilities are usually available to the public always, but enough capacity is reserved to ensure space for monthly permit holders
  • Spaces are rented to the public only when the businesses in the building are closed
  • Spaces are rented to the public only on a long-term basis (e.g. month-to-month), to minimize security concerns about access to locked garages

However, it can be as simple as one building owner with parking space capacity renting those spaces to another business when they would otherwise be empty.  That scenario in fact, can be a profitable one.

Profit from shared parking

The Victoria Transport Policy Institute (VTPI) provides a great example of a shared parking scenario and how the numbers can translate into profit.

In their example, an office building has 120 surface parking spaces, 100 used by their employees and the remaining designated for visitors.  By negotiating the use of the surface parking spaces to nearby businesses, in this example a restaurant and a church, the building owner can add an additional $15,000 per year in revenue.  A commercial parking operator is factored into the plan for evenings and weekends for an estimated $10,000 in annual revenue.  The example also explores the impact of reducing parking spot demand of the building employees through a space-share program.  Leasing the freed-up spaces to a nearby business can add an additional $20,000 in revenue.

The report goes on to expand the scenario, however, the example is clear that parking spaces in high demand can offer opportunities for revenue generation and a reduction in traffic congestion.

Cost Income Balance
Annual rent for building

  • Costs include debt servicing and operating expenses
$900,000 $1,000,000 $100,000
Restaurant negotiates 20 spaces for use by staff in evenings and weekends at $50/month/space

  • Requires walkway improvements between locations and additional operating expenses 
$2,000 $12,000 $110,000
Church rents 50 spaces for Sunday mornings at $500/month

  • Requires additional operating expenses 
$1,000 $6,000 $115,000
Commercial parking operator rents unused spaces to public during evenings and weekends $10,000 $125,000
Building manager initiates a shared-space program for employees, reducing the demand to 80 spaces for employees, and offering a $40/month cash-out option for those who opt in.  Freed spaces are rented to a nearby business for $80/month

  • Costs include cash-out payments and additional operating expenses 
$12,000 $32,000 $145,000
Where this works best

While this example creates a straight-forward approach to shared parking, not all businesses with surface parking are ideal candidates. Clearly, these scenarios are limited to areas where the parking is in demand and space is at a premium. It also requires that the different user groups in the area have different requirements for parking. A typical scenario would have weekday users like banks, offices, schools, factories mixed in with evening demand businesses like restaurants, pubs, event facilities, and theatres. Weekend demand comes from parks, churches, shopping centres, and events.

The impact on parking supply

VTPI suggests that a shared parking approach can reduce the amount of parking required at a destination by between 10 and 30%.  The graph below shows how parking requirements decrease under a shared supply scenario, using residential, office, and restaurant demand in each area.  Demand for parking varies from each group throughout the day, making up different proportions of the parking requirements.  However, the overall demand for spaces declines under the shared parking model.

shared parking chart 1

The Institute for Transportation & Development Policy (ITDP) claims shared parking can go even further and reduce supply requirements by as much as 20-40%.  However, the scenarios they describe require fully public accessible parking with no private or reserved spaces and the elimination of free parking.

shared parking chart 2

ITDP explain a scenario in a mixed-use district where demand for spaces would vary by time of day between residential, office, shopping, and community facility demands.  Their model of shared parking would require a city-wide approach including zoning reviews, parking usage reviews, and a shift “away from trying to satisfy all parking demands by increasing parking supply.”  This model is most successful when the City adopts a culture of alternative transportation including public transit, cycling, and walking.

Other shared parking opportunities

Unbundling parking can also offer opportunities for creating shared parking scenarios.  For example, a condominium development with a minimum parking requirement of two spaces per unit might consider unbundling the cost of the parking spaces to the condo owner.  A condo owner pays less for a unit with one space instead of two and the developer rents the space to the public or a nearby business.

In neighbourhoods with residential permitting, understanding the occupancy rates during daytimes can allow municipalities to issue daytime permits to non-residents who work in the area.  In this example, residents could park free, and the fee for non-resident permits could be set at a rate that maintains a desired 15% vacancy.

Municipalities could allow for the leasing of shared spaces to help satisfy the minimum parking requirements for a new development.  These decisions could be made at the early stages of development to help support more cost-effective infill opportunities.