Lending Based on Parking
In many areas of the country, zoning codes make transit-oriented development (TOD) impossible. In other areas, planners are open to changing codes, but there is a significant lack of local political support for such changes. In almost all areas, however, there are two barriers that continue to stand in the way of a full-fledged movement toward TOD: money and parking. The Salt Lake Tribune recently ran a story describing planners’ frustrations regarding bank lending practices because of outdated concepts of parking minimums:
As a recent former Salt Laker, I can assure you that the planning and political support for TOD is alive and well in most parts of the Salt Lake valley. The light rail system, called TRAX, is continually found to be more popular than estimates predicted, and the FrontRunner commuter rail line has been a welcome addition. These two expanding rail systems make the area ideal for dense development located within walking distance of the rail stations. It seems obvious that such development oriented toward transit access would reduce the need for parking spaces, yet the banking industry, by and large, has not caught on to this yet. They describe TODs as a “risk” that may not be what the market wants. However, they overlook the massive popularity of TRAX in the downtown area where restaurants, retail, offices, condominiums, and cultural venues densely abound alongside and despite a noticeable lack of “adequate” parking. If banks were to actually pay attention to the areas of the city in which TOD and less parking already exists (downtown and some areas of 4th South), they would see that there is actually a very strong market for it, even in suburban areas.
Though many of us recognize the benefits of TOD, it will probably take quite an epiphany for banks to begin to buck the industry standard of about 1 parking space for every 250 square feet of building space (which works out to about 15% more parking lot surface area than floor area at a cost of $30,000 per parking space [or about $50,000 per for structure parking], a cost that banks have no problem financing). How can we move banks toward a better understanding and appreciation of TOD in the Lehigh Valley and elsewhere? What will it take for Banks to begin to take that “risk?”