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Mexico City Prioritizes Affordable Housing Over Parking

Mexico City took a bold step intended to boost the availability of affordable housing.

Mexico City did something revolutionary. The city’s government took a bold step intended to boost the availability of affordable housing in the city. How? It dropped its parking requirement, or the minimum number of spaces that developers must include when they construct new apartments and office buildings.

Instead, Mexico City now limits the amount of parking that can be built — and developers who overbuild will be charged penalties for doing so.

How exactly does that help people find housing?

Well, it’s a matter of mathematics. Less space taken up by parking means more space available for housing. Formerly, developers had to guarantee a certain amount of available parking for every project.

The requirement seemed to make sense at the time. Doesn’t everyone who lives or works in a building need a spot for his or her car?

Here’s the problem. All that space taken up by parking spots — especially in the middle of big cities — makes available space for housing shrink exponentially. The shortage of living space drives up the cost of housing in these areas, making it more and more unaffordable for anyone but upper-tier earners.

Office and apartment rent prices fund all that “free” parking, raising the cost of rent. What are people of more modest means supposed to do? Where do they live?

One US study determined that requiring developers to include parking for new apartment spaces added 16 percent to the cost of living in those apartments. And in metro areas where many don’t need to own a car, that’s a ridiculous added expense.

Every renter ends up subsidizing the parking that’s used by only a handful of people. Nationally, according to the study, non-car owners pay an incredible $440 million to fund parking for others.

But what if they didn’t have to? Suddenly a lot of housing becomes affordable for a wider range of incomes.

Mexico City is the second most populous place in North America after New York City. A whopping 8.8 million people live there, so its traffic problems are legion. Heavy traffic causes congestion, air pollution and wear and tear on road surfaces.

Mexico City’s leaders decided that minimizing parking is the path forward to solving those nagging problems.

We’re a society that loves cars. And many of us are deeply married to the idea that we can’t live without lots of free or inexpensive parking close to stores, schools, apartment complexes and office buildings. We’re so used to having parking, as a matter of fact, that we tend to feel it’s a right and a necessity.

But that mindset may need to change.

“If developers were allowed to face directly the high land costs of providing so much parking, the number of spaces would be a result of a careful economic calculation rather than a matter of satisfying a legal requirement,” wrote economics professor Tyler Cowen in The New York Times in 2010. “Parking would be scarcer, and more likely to have a price… and people would be more careful about when and where they drove.”

Many metropolitan areas will have to face this issue sooner rather than later. Do we need those minimum parking requirements? Not really, no. In a number of big American cities, congestion is so bad that nearly every day entails gridlock. Yes, Washington, DC, Los Angeles and Manhattan, I’m looking at you.

Not everyone who lives in the heart of a city owns a car — or needs to. Open up that space for housing, and bring the cost of those units down. That’s really what people need. We must get to the point where it’s actually what everyone wants, too.

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