It’s a well-known paradox: There is an excess of unused parking spaces in cities, yet drivers struggle consistently to get parking when they need it.
Even as people talk about how difficult it is to find places to put cars, there are thousands of parking spots available in every American city.
Out of curiosity, Spacer Technologies decided to calculate the market value of underutilized spaces in a number of major North American cities, if those spots were rented out — and simply put, the results are staggering.
In the Spacer Index for Seattle, the annual rental value of unused parking is $152 million. And in San Francisco? $287 million.
It’s no accident that drivers are having a hard time finding spots. In recent years, city governments have been actively cutting back on the number of spaces for private automobiles, in an effort to encourage other forms of transportation and the development of more affordable housing.
Whether it’s creating bike lanes, adding curbside space around bus stops, or eliminating parking minimums, these reductions make it all the more important to consider alternate places to park.
Parking Potential
To search for a solution, the Spacer Index focuses on locations with the potential for monthly rental. That eliminates street spaces, shopping and retail locations, paid parking lots, and class A commercial real estate.
Even when these categories are removed from the equation, there is still an abundance of parking to be found at hotels, religious institutions, multifamily buildings, single-family homes, and class B and class C commercial buildings. In Seattle, this totals about 75,000 vacant spots, while San Francisco has nearly 96,000.
These underutilized spaces don’t just represent convenient and affordable parking options for drivers — they are also unrealized assets for property owners. The Spacer Index estimates that the average monthly income for a parking space in Seattle is $170.
For San Francisco, that figure is $250 (a more conservative estimate than other sources, whose quotes are upwards of $300). The actual gains may be even greater for those who rent their vacant spaces in high-demand neighborhoods.
Notably, the majority of the surplus parking calculated in the Spacer Index is not associated with commercial real estate but rather residential properties. This means the same people who struggle to find parking in one part of the city might also benefit from renting out their spaces in a different part of the city.
A resident can generate passive income by renting out the extra space in their driveway, then use those earnings to rent a reliable parking spot for their workplace commute.
Leasing unused spaces to alleviate parking scarcity is not a new idea. However, the various types of spaces available, not to mention the diversity of parking needs, makes it difficult to connect property owners with drivers.
Bridging the Gap
A centralized platform is essential to connect churches with college professors, hotels with rental fleets, and multifamily property owners with commuting business executives. The next step for reducing parking scarcity is for all parties is to take advantage of the technology available to them.
Parking space rental websites, for their part, need to make sure their platforms can accommodate a broad range of users, from private homeowners to corporate fleets.
The extra parking calculated in the Spacer Index shows there is a huge opportunity in the sharing economy, and for the first time, there is a numerical value associated with spaces available for monthly renters.
The next step is to use technology to bridge the gap between people who have unused inventory and the people who need it, ultimately maximizing efficiency, minimizing waste and generating a new revenue stream.
Jeremy Zuker is the CEO for North America of Spacer Technologies, a technology company that partners with property owners to uncover new revenue streams and optimize their assets. He can be reached at jeremy@whereipark.com
