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On Parking and AB 2097

Of the many housing laws taking effect in 2023, perhaps one of the most anticipated has been AB 2097. This law effectively eliminates minimum parking requirements for development projects located within a half-mile of transit. It is what progressive urbanists have fought for for many years, and it has the potential to be game-changing for the development of denser housing. Well, maybe.

Anyone who’s ever tried to lay out parking for approval in L.A. knows the frustration that is L.A. parking code. A pleasant pedestrian experience is all but negated in some situations by the dictated necessities. The requirements are onerous, antiquated, and–quite often–excessive. It is high time we reevaluated these mandatory minimums. Instead of dictating from on-high how much parking needs to be built, we should let the market decide what is right on a case by case basis. That is precisely what AB 2097 allows for.

Does this mean that off-street parking will be disappearing? Not likely, no. Just because there is no mandated minimum doesn’t mean that there is no demand for parking spaces. This is still LA, after all, and people need their cars. A study of LA’s TOC Incentive program, in fact, found that projects built with market rate units provided about 0.9 parking spaces per unit on average. This is about three times as many as were provided for 100% affordable housing projects, but much less than would be mandated under zoning guidelines. It is a matter of finding the right amount and not overbuilding, of tailoring the parking solution on a project-by-project basis.

This matters because when free off-street parking is required, we all pay the price in one way or another. Free parking, afterall, is not free to build, and the cost to provide the parking inevitably makes it to the costs of goods, services, and housing. Depending on the kind of parking provided, it can cost anywhere between $25,000 to $90,000 per space to provide off-street parking according to a recent study. These costs are passed on to end users. Take housing, for example, and some quick-and-dirty real estate math. Assuming an average cap rate for multifamily in L.A. of 5% and an average of 1.5 spaces built per unit, the implied parking rent for each unit can range from $156 to well over $550 per month!

In addition to this, all that parking takes up a lot of space. Getting rid of minimum requirements as AB 2097 does, then, has the potential to free up much needed land to create more housing. Remarkably, a study by the architecture firm Woods Bagot found that over 100 square miles of land in Los Angeles is dedicated to surface parking lots. That’s over a quarter of the total size of the city, and over four times the size of Manhattan! This is enough land to house 1.5 to 3 million residents in LA. To quote the urban planner and “parking guru” Donald Shoup: “I think we’re the Saudi Arabia of developable land in cities. If cities reduced, eliminated their minimum parking requirements, a lot of these parking lots could be built on for infill development.” Beyond the macro, the reduction of parking spaces in individual projects has the potential to free up space for more housing units.

By now I hope it’s clear that we are very much for this legislation, and–needless to say–AB 2097 comes in with a lot of hype. But what does it actually do? How can you use it in your own project? Below is what the state law provides for. As of this writing, L.A. Planning has yet to release a memorandum on how they plan to implement this, but I’ll share a link here when it is available.

What does AB 2097 do?

AB 2097 prohibits a public agency from imposing any minimum automobile parking requirement on any residential, commercial, or other development project that is located within half a mile of public transit. For LA, a good proxy would be to look up your project for TOC availability through Zimas: if it qualifies for TOC odds are it will fall under AB 2097 as well.

All this notwithstanding, there are some exceptions. Energy and building code requirements cannot be circumvented, for instance. This means that if your project is subject to Chapter 11A or 11B requirements, you will still need to provide accessible parking as required. Electric car charging areas will also still be needed per the new California Energy code mandates.

Beyond these, a public agency may still impose and enforce minimum parking requirements on a housing project if it finds (supported by “a preponderance of evidence on the record”) that not providing parking would have a substantially negative impact on the agency’s ability to meet its share of specified housing needs or existing residential or commercial parking within 1⁄2 mile of the housing development. This is a bit murky and leaves room for challenge, so we’ll need to see how L.A. clears this up when they provide their interpretation.

However, an agency may not take this exception if any of the following is true of the project:

  1. It dedicates a minimum of 20% of the total units to very low, low-, or moderate-income households, students, the elderly, or persons with disabilities.
  2. It contains fewer than 20 housing units.
  3. It is subject to parking reductions based on any other applicable law.

So, if you’re planning on building less than 20 units, there is no allowance for a public agency to require a minimum parking count, even if the project is completely market rate. And the third point may mean that any housing project will not be able to be challenged because sites that would qualify for AB 2097 would also qualify for TOC incentives. Again, we’ll have to see how L.A. deals with this in the coming months.

And that’s the most of it. Reach out directly with questions or to discuss the applicability to your own project. The language is strikingly straightforward. We’ll see how it is interpreted as projects begin to be submitted under this new law, however. In the meantime, there’s definitely something to be excited about here.