Hamilton CBD and the Cost of parking space

Before the 1990s the Central Hamilton Area was excluded from minimum parking space requirements, allowing the people that controlled the real estate in the Central area to set the level of investment in car parking based on willingness to pay.

The 1991 the City of Hamilton Town Plan removed the right of the Central Hamilton Area property owners to set their own level of investment in car parking and began enforcing minimum parking requirements for the CBD, stating on page 90 of that document:

4.0 Vehicle – Parking, Loading and Access (VEH)

The failure to provide adequate parking also has an impact on the effective and efficient operation of the land use itself. For example, uses which fail to provide the necessary customer parking are at a disadvantage to those uses which do.

The parking requirements given are considered to be the minimum provision that will adequately protect the community from any possible adverse effects of the operation of the land uses

The above suggests that the council needed to protect the community from CBD residents and investors who did not see car parking as part of the way they lived or earned their income. Forcing all new investments to enter as investors in the car parking market to ensure they are not disadvantaged does not come without a cost, which the Council estimates on Page 92. (The figure of $12,000 is in 1990 terms)

4.2.9 Payment in lieu

Council will accept a payment-in-lieu of parking of $12,000/space or a value not exceeding the value of a 24m2/space of the site whichever is the lesser

This cost increased with time and in the Hamilton District Plan – July 2012 (Large file 40KB) on page 710, states that the figure of $13,430 is in 1997 terms and will be adjusted at the same rate as the Producers Price Index for Construction – here is a link to an Inflation calculator)

Table 5.2-1e Cash in Lieu of Parking

$13,430 per space or the value of 24m2 per space of the site, whichever is the lesser

The Hamilton Parking Management Action Plan – 2010 (page 10) gave an indication of the still-increasing high cost of investment for any business planning to set up in the CBD:

Areas with high land values such as the CBD. In medium density situations where structured parking is required, each on-site car-park typically costs $20,000-$40,000. Even where surface parking can be provided, the cost of the land used to provide parking is approximately $6,000 per year. Reserving large quantities of land for parking directly impacts the affordability

Not to worry if the Council perceives parking to be in short supply or is unwilling to allow parking prices to rise as a market response to shortage: it will enter the business of parking supply Hamilton District Plan – July 2012 (Large file 40KB) Page 77

The land resource is limited in the Central City and requiring each business to provide its own individual parking spaces is an inefficient use of the land available. The parking resource is therefore centralised and provided by Council. Contributions are required from developers to assist in providing the parking facilities.

To give an update, or perhaps back to the future (back to pre-1990s) for central city parking, see the  Christchurch – Draft Central City Recovery Plan For Ministerial Approval Dec 2011 Under the title – Reasons for removing the minimum parking standards – Appendix O. Parking Plan Analysis, Page 557.

Requiring developers to provide off-street parking also significantly adds to the cost of a new development, especially in urban areas where land costs and competing commercial uses of land are high. Costs of providing a car park in a development can range from $2,000 to $5,000 for surface parking through to $20,000 to 30,000 for structured or underground parking. These costs are typically passed to consumers, through higher housing prices and rents for all types of premises

CBD Harwood Rostrevor Carpark

The above photo shows one of the outcomes of Hamilton’s large taxpayer and ratepayer subsidising of investments in car parking supply, which can crowd out high value private parking investments, especially when car parking is priced below market rates, ,as we see from this 1990 unfinished private investment in high value CBD car parking located between Harwood St, Victoria St and Rostrevor St.

For more on the high cost of Minimum Parking Requirements (MPR),

Google the following phrase: “Burden enterprise and prevent the reuse of older buildings – increase the prices for everything except parking”

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