Fee-in-Lieu of Parking

A fee-in-lieu of parking is a common development-code strategy to give developers the option to pay a fee, into a fund to be used to develop public parking and/or other mobility investments, rather than providing parking on-site.

The fee is typically multiplied by the number of required spaces the developer chooses not to provide. This benefits developers by allowing them to build less parking and make the most of their properties. As such, it can be particularly useful for those developing on infill sites, or any parcel with a small, buildable site. This can facilitate the development of dense, mixed-use environments, in providing developers with an option to maximize the land-use density on their sites, while also creating a funding for the development and maintenance of centralized parking and mobility infrastructure.

Difficulty

$

Cost

Impact

Key Benefits

  • Directly incentivizes developers to help fund shared, strategically-managed, efficient parking infrastructure in lieu of on-site, accessory parking

  • Facilitates and simplifies approvals for infill development and changes in developed land uses, to increase and stabilize continued investment in established districts

  • Captures private funding for public parking and mobility improvements that support district-level growth and economic development

  • Prevents oversupply of parking and future-proof parking facilities

  • Generates funds for broader mobility improvements by transferring private parking dollars into a municipal mobility fund

  • Creates opportunity for more affordable housing by maximizing density

  • Gives developers who prefer to provide parking the flexibility to do so

Case Studies

 NATIONAL 

 REGIONAL 

Cash-in-Lieu of Parking

Aspen, CO

Aspen, CO implemented a cash-in-lieu of parking program to support its downtown district development plan (the Aspen Infill Area). Aspen replaced its parking requirements with a Mobility Requirement with multiple options for satisfaction. While providing on-site parking at new developments is one of these options, developers may also pay a fee to support the provision of public parking, mobility, and TDM enhancements. Revenue generated by these fees is placed in a flexible fund that allows the City to respond to changes in parking demand and mobility preferences by shifting resources to the most needed improvements over time. The rate of cash-in-lieu payments is reviewed every two years to ensure that rates remain financially sensible for developers based on recent construction costs. As of fall 2016, the costs associated with developing new parking facilities were $38,000 per space based on local market conditions.

Cash-in-Lieu of Parking

Carrollton, TX

In the City of Carollton’s Transit Center District Regulations, developers may pay a cash fee to meet district parking requirements. The City Manager or their designee is granted the authority to establish “the cost of construction of a parking space in a parking structure” annually. This establishes a baseline for determining an in-lieu fee. Offering a cash in lieu option allows developers to make the weighted decision of using valuable space for residential amenities or additional revenue generating uses.

Implementation Considerations

Role of Public Sector

  • Establishes in-lieu fee program by code

  • Sets and adjusts in-lieu fees

  • Defines how revenues can/cannot be invested, typically toward expanding/improving area parking or mobility conditions

  • Ensures that received revenues are significant enough to make necessary and strategic investments, and adjusts fees as necessary

  • Makes strategic investments

Role of Private Sector

  • Uses fee option to preserve more development area for proposed land uses

  • Uses fee option to increase the viability of infill projects or other site-constrained development opportunities that would not be able to provide significant on-site parking

  • Advises on strategic use of collected-fee revenues

Timing

  • Viable for future TODs