Next Parking LLC, a division of Next Realty, LLC, was founded in 2001 and specializes in the acquisition and operation of parking assets.
Next Parking’s platform consists of three primary segments: acquisitions, asset management and consulting. Next Parking is run by a team that has over 75 years of combined parking industry experience, including ownership, asset management and in-depth operational knowledge.
That level of experience provides the background for a time-tested perspective on the parking industry. In response to a recent Wall Street Journal article, America Has Too Much Parking. Really. Next Parking’s President Michael Nichols provides the following response.
Next Parking agrees with the thesis if not all the supporting premises of the Wall Street Journal article. Parking is expensive to build and when public parking started out it was often offered as a amenity to tenants, residents, and customers of urban buildings that had a structured parking component. The only way to recapture the cost of constructing and operating parking assets was through the rents and CAM charges paid by tenants. If city zoning ordinances did not require parking minimums, then developers might not have built parking into their developments creating a chaotic situation once they were delivered. Oh, the Humanity!
A significant number of parking garages (spaces) were built to serve parking needs when driving to work was commonplace. But like everything else, needs and demand evolve over time. Smaller cars, larger SUV’s, electric vehicles, self-driving autos, public transport, bike share, scooter rentals, Uber, Lyft, work-from-home – all have resulted in changes in societal behavior. In the process, they have impacted parking demand.
What is missing from the WSJ’s article is faith in the market to solve parking problems that result from too few (or too many) parking spaces. If there we no parking minimums tied to development, fewer parking spaces would have been built by developers. But the market would have quickly understood this and stand-alone parking garages and lots would have been built by entrepreneurs who quickly recognized the opportunity and solved it.
This likely would also have resulted in more flexible downtown redevelopment opportunities. When parking is required as a component of development, it is typically constructed under the building it serves. However, if the market responds to parking needs, it would be built as a stand-alone purpose built parking garage or lot. It is much easier and less expensive to redevelop a stand-alone garage or flat parking lot into some other use than making the choice to bring down an entire building and associated parking garage for a new use.
We believe that over time, the decision to eliminate parking minimums will result in parking supply being right-sized to demand. We also believe this will make existing well-maintained parking structures more valuable as occupancy and rates will increase as the excess underutilized parking assets are repurposed. Next will continue to acquire parking assets in the preferred markets with the right fundamentals to capitalize on this new direction in parking minimization.