Parking Building Economics

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If the value of a car parking space is greater than the cost of supplying the car parking space then private investors will provide parking. Should politicians use ratepayer or/and taxpayer money to subsidize and/or oversupply car parking, the value of a car parking space will fall, but the cost will not.

This post is based on parking building economics as explained in 1973 as an appendix to the Traffic management plan for Hamilton.

To try make this relevant in today’s money the Value in [$—] is in today’s money as per the Reserve Bank Inflation calculator, using the following settings.

Category – General (CPI)

Date of cost above – 1973 Q1

Date for comparison – 2017 Q1

Traffic Management Plan for Hamilton Report No.3 – Central Business Area (CBA) Off-Street Parking – REF 0711 730 993 115 1 HAM – April 1973

Appendix II – page 16

Parking Building Economics

The following is an approximate estimate of the economics relating to the construction of a 500 car parking building within close proximity to the city centre as suggested in the Transportation Study Planning Report.

  1. Cost

(a) Capital Cost

A parking building will cost about $2,500 [$31,030] per car space (excluding land). A 500 space building would therefore cost $1,250,000. [$15,515,845]

(b) Operating Costs

It is envisaged that operating costs and costs for such items as maintenance, lighting and insurance would be in the order of $75,000 [$930,950] per annum.

(c) Annual Costs

Annual cost of a building would be:-

Loan Charge and servicing (10% p.a) $125,000 [$1,551,584]

Operating Costs                                        $75,000 [$930,950]

Total $200,000 [$2,482,535]

  1. Revenue

The revenue required for a building to be self-supporting with an annual cost of $200,000 [$2,482,535] would be approximately $1.60 [$19.86] per space per day.

To collect $1.60 [$19.86] per space per day, based on a 10-hour day and a maximum operational occupancy of 80%, it would be necessary for the parking charge to be 20c [$2.48] /hour

Note that the existing Central Car Park has an occupancy of 65% and revenue of 45c [$5.59] /space/day (1972/73 receipts)

Now in the real world of this century some of the above costs are not like-for-like:

(1)   The VALUE or COST per car space this decade is more like a third less at about $12 or $20k, giving a 500 space building a cost of $6 or $10 million. – source

(2)   The Annual Cost of servicing a loan at (6% p.a.) = $360k or $600k plus Operating costs of $930k = Total of $1,290 or $1,530k divided by 500 spaces = $2,580 / $3,060 per space per year.

 

(3)   Revenue needed to service a loan of $2,580 or $3,060 per space per year is $10.32 or $12.24 per day. (Based on 250 days)

To collect $10.32 or $12.24 per space per day, based on a 10-hour day and a maximum operational occupancy of 80% it would be necessary for the parking charge to be $1.29 or $1.53 per hour

 

This is pretty close to the cost of parking at the Knox street Parking building.

EARLY BIRD PARKING

$7.00 flat rate
Entry between 4:00am and 10:00am
Exit before 7:00pm

CASUAL PARKING (BEFORE 6PM)

0-1 hour $3.00
1-2 hours $5.00
2-3 hours $7.00
3-4 hours $9.00
4-5 hours $12.00
Daily Max $12.00 (12 hour ticket)
Lost ticket $20.00

EVENING PARKING (AFTER 6PM)

$5.00 flat rate

SATURDAY AND SUNDAY

$5.00 flat rate

Deanwell’s stand alone corner dairy

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Here is a picture of a corner dairy in Vathorst, Amersfoort, The Netherlands. This apartment building is less than a decade old and it is an example of small-scale economic activity, supporting the local population and making the corner an active, social place where you’ll find people most times during the day and a good part of the evening.

Here in Deanwell, we can see a development with a similar goal, where the corner dairy is part of an apartment building, not on the same scale as the Vathorst example, but giving residents the same convenience of having an extension of their pantry on their doorstep and providing a place where locals informally share, contribute and build a sustainable neighbourhood.

What supports this dairy is the high density of homes (and schools) within walking distance of this corner. Much of the area has a population density of around 4,000 persons per square km (source: https://koordinates.com/layer/7322-new-zealand-population-density-by-meshblock/)

This high density also shows a good number of people living within a 400m nominal distance of other dairies in Melville.

The Deanwell corner dairy combined with apartments is sensible; it may not meet everyone’s definition of attractive, but because the Deanwell neighbourhood offers housing types of every kind, the suburb is attractive to a wide range of people.