Minneapolis looks at easing parking space restrictions

Hoping to promote more affordable living options in the urban core, Minneapolis leaders may soon make way for a new kind of housing that's missing one key feature: ample parking.

Uptown-area Council Member Lisa Bender is proposing to relax the city's parking space requirements for new residential projects located near the busiest transit stops. She expects the change will help lower the cost of living in the city, since tenants of those buildings would not have to subsidize expensive underground parking stalls.

"It gives people an option to live in a lower-cost housing situation," Bender said. "They're not having to pay for parking that they're not using."

The proposal, still in its infancy, would follow similar initiatives in cities from St. Paul to Seattle, which have loosened their rules in hopes of promoting more transit-oriented housing. Parking-light apartment and condo projects are currently outlawed in most areas outside of downtown Minneapolis without a special exemption.

But several developers said even if the rules were relaxed, commercial lenders remain wary of funding projects with skimpy parking. If the project fails, the lender takes over a development that may be less appealing.

"The biggest barrier to reducing parking spots has not really ever been the city," said Alan Arthur, CEO of nonprofit developer Aeon. "The biggest barrier is lenders. Lenders are risk-averse."

And even tenants who opt out of parking are paying the price, Arthur added, since monthly charges rarely cover the full cost of the garage.

Others worry supporters of the change are overestimating the number of residents who want to abandon their cars, which could mean clogged on-street spots if these developments start to materialize.

"When you talk to business people, parking is really important to them," said Council President Barb Johnson, noting she recently had to park one-and-a-half blocks from a business while visiting Bender's ward. "I find it sort of amusing … when the council members that are pushing this the hardest are the ones with the biggest parking problems."

Bender said the change may encourage more people to bike, walk and take transit.

"I think it's fine for cities to make it a little bit harder to own a car than Minneapolis does," Bender said. "Right now it's pretty easy to drive everywhere and own a car and parking is pretty inexpensive. And there are environmental impacts of that."

Minneapolis has an array of residential parking regulations, which are subject to occasional case-by-case exemptions. Typically outside of downtown, the standard is a minimum of one space per unit, which can be reduced to .8 spaces if the project is near high-frequency transit and includes car sharing. The minimum drops to .35 spaces near several light-rail stations around the University of Minnesota. Conversely, in downtown, the most amount of parking allowed is 1.7 spaces per unit.

Developments have to be within 300 feet of a bus or light rail stop with midday frequencies of at least 30 minutes to qualify for the 10 percent parking bonus. Bender said her proposal would aim to significantly reduce — if not eliminate — the parking requirement near transit.

Despite having no parking minimums downtown, a rising class of luxury apartments there still feature at least one spot per unit, said the city's planning manager, Jason Wittenberg. The same is largely true for new developments outside downtown.

Take Track 29, a high-end 198-unit apartment building along the Midtown Greenway with 236 parking stalls. Developer Ross Fefercorn said 90 percent of those stalls are leased and the building is 95 percent occupied.

But while luxury renters may always desire some parking, Fefercorn said Bender's proposal is "compelling" because nixing underground parking would allow him to build smaller projects with lower rents. Underground parking costs up to $25,000 per stall to build, he said, and requires the accompanying development to have a larger footprint. It also raises taxes, maintenance and insurance costs.

"If you can build a building without underground parking and you have residents who will live in it, your cost of building the project is greatly reduced," Fefercorn said. "You pass on the savings to your tenants."

Other cities are also exploring reduced parking requirements around transit. St. Paul, for example, eliminated all parking requirements within a quarter-mile of Green Line light-rail stops. And outside downtown, where there are no parking minimums, developments in so-called "traditional neighborhoods" get a 25 percent break from the typical one-to-one requirement.

The city is not aware of any car-free developments that have been built along the Green Line, said Sara Swenson, spokeswoman for the city's department of planning and economic development. "We've mostly seen developers reduce requirements below normal citywide standards," Swenson said.

Bender noted that many of the older apartment buildings in Minneapolis were built without parking. And Arthur's firm — which primarily builds affordable housing — has in recent years converted several older buildings into low-income housing without providing parking.

Seattle has no residential parking requirements near high-frequency transit in the denser parts of the city. But the city is now revisiting whether the blanket policy needs tweaking in the wake of a massive development spurt. More projects are now offering no parking after lenders seemingly loosened their requirements, said Bryan Stevens, a spokesman for the Seattle department of planning and development.

"I still think from a financing standpoint most lenders will require some level of parking," said local developer Kelly Doran., who believes that even people adopting alternative modes of transportation are largely still keeping their cars. "And I don't know that there's a magic number there, but I don't think the number is zero."

One representative of a major lender, who could not speak publicly about the company's underwriting policies, said a developer seeking to build a project with little parking needs data from comparable projects to prove it will succeed. "The best comparable is right across the street," he said. That raises a quandary for developers, since those projects don't yet exist.

Fefercorn said a developer taking a risk on a smaller-scale project with limited parking — and car-sharing options — could help prove the concept is viable. Lenders "are going to tell you that all day long," Fefercorn said. "But it's up to us developers to convince them otherwise."

Eric Roper • 612-673-1732

Twitter: @StribRoper