BUSINESS

BuzzBuzzHome: In The Age Of The Condo, Parking Is Dying

10/03/2014 08:39 EDT | Updated 10/03/2014 08:59 EDT
Henrik Sorensen via Getty Images

BuzzBuzzHome: “That’s not going to work, you can’t do that.”

When Joe Starkman told his development lawyer his plans to build the first condominiums in Calgary without parking spaces, the response was less than encouraging. “All the baby boomers I talked to, at first glance, said ‘you’re nuts.’ To us, that was the right answer,” said Starkman, a developer in Calgary and the owner of Knightsbridge Homes.

Parking spots in big cities in North America are becoming increasingly more expensive: a condo development in New York City’s SoHo neighbourhood made headlines last month for charging $1-million apiece for a space. In Toronto, parking spots in downtown condos cost anywhere between $50,000 to $75,000 each, according to data collected by BuzzBuzzHome; a few years ago, a parking spot at the Four Seasons hit the $100,000 mark.

In Calgary, Starkman says his condo units would skyrocket to $270,000 from $200,000 if he added parking — a price he doesn’t believe his under-30-target market will go for.

“Owning a car is not a priority like it was for [the previous generation],” he said.

A new generation of young homebuyers who don’t own cars is greening the market and developers are starting to take note by adapting how much parking they build.

Other developers across the country are witnessing a similar trend: “Parking is not as important as it was five to 10 years ago when you’re purchasing a condo,” said Rizwan Dhanji, the vice president of sales at Canderel, a development firm in Toronto.

In the past six years, Dhanji’s firm has drastically cut down the number of parking spots they build: a condo building they developed in 2008 had a 60 per cent parking-spot ratio to the number of units in the building, while a project planned to be built just up the street will have a mere 21 per cent parking-to-unit ratio.

“We lose money on every parking space that we build,” he said. “The excavation, the shoring cost, and the forming costs and all that are just adding up and because the sites are so tight, it’s very difficult to go underground in these really small spaces.”

Historically, cities have mandated minimums for the number of parking spots a developer must offer to residents within a building, but builders can apply for alternative parking rates for new developments on a site-by-site basis, generally through a zoning bylaw amendment.

Sometimes, municipalities themselves adjust these thresholds to promote public transit or reduce congestion and greenhouse gas emissions, but more often it’s the developers who are ahead of the curve and apply for bylaw exemptions to build below the parking minimums, said Mark Hutchinson, the program director at Canada Green Building Council.

“I’d love to say that the cities are driving this because a lot of cities are trying to take action to encourage lower amounts of parking being provided, but I think that, overall, the market is kind of leading the trend,” Hutchinson said.

Read the whole story at BuzzBuzzHome.

Here is a glimpse of parking-spot prices in new condos across Toronto:

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