Unbundled Parking Costs

The cost of constructing and maintaining the parking provided at new developments is rarely directly paid for by its end users.

Rather, its contribution to a project’s overall development cost becomes just one, significant factor determining the price for renting, leasing, or purchasing the project’s commercial space and/or housing units. All residents pay for parking, regardless if they need or use it. Commercial-space occupants all pay for parking, through higher lease rates, affecting their operating costs, and thus the wages they can pay and/or the prices they must charge to stay in business.

This also puts transit at a competitive disadvantage in vying for share of local travel if most travelers are provided free (bundled) parking at each end of most of their trips. Making parking an optional, fee-based amenity, often referred to as unbundling parking, is a simple means of avoiding this, by ensuring that the cost of parking is paid for by those that use it, based on how much of it they use.

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Key Benefits

  • Reduces parking demand, particularly in TOD contexts offering viable alternatives to driving and car ownership

  • Reduces supply needs, increasing potential land-use densities, area affordability and economic vitality

  • Discourages excessive parking supplies in new developments by making it difficult to recoup their costs through building rents, lease rates, and dwelling-unit pricing

  • Reduces housing/business-operating costs for those who have below-average parking needs

  • Attracts and accommodates households, businesses, and visitor populations with reduced parking needs

  • Makes transit more cost competitive

  • Facilitates more accurate assessment of parking demand, by removing the inflationary impact of free parking

Case Studies



Required Unbundled Parking

San Diego, CA

In March of 2019, San Diego, California added their name to what is becoming a long list of American cities to require the unbundled parking for new multi-family developments in transit-oriented areas – referred to as Transit Priority Areas (TPAs) in the new code. TPAs are defined as a half-mile geographical area from an existing or planned major transit stop. The new code achieves the following:

  • Abolishes parking minimums for multi-family residential developments in TPAs;

  • Introduces parking maximums of one space per new apartment/condominium;

  • Requires developers to unbundle the one space from monthly rent or purchase price; and

  • Requires transportation amenities, based on project ranked vehicle trip reduction.

Proposed Unbundled Parking Requirement

Austin, TX

The City of Austin Transportation Department, in collaboration with Capital Metro, the Innovation Office, and the Equity Office, completed a study to identify strategies to incentivize use of transit and other non-automobile modes of transportation throughout the city. The report concluded with fifteen actionable strategy options, of which six were recommended to the City Council for consideration. The report included measures to compare the relative cost-effectiveness of these strategies, with Unbundling scoring five out of five for Impact and carrying the lowest estimated implementation cost. The 2018 final report included the recommendation to City Council to consider options to “require the cost to rent or buy a parking space be separated from the cost to rent or buy an apartment, condo, or office”.

Implementation Considerations


Role of Public Sector

  • Provides TOD Guidelines that encourage this practice.

  • Codifies unbundling incentives/requirements

  • Educate private sector on code changes and the benefits of unbundling


Role of Private Sector

  • Charges tenants for parking, separate from any charges for renting, leasing, or buying building space or units



  • Viable for both established and future TODs