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Parking Wars

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We can no longer stay neutral; reasonable solutions must start to drive our decision making

A woman walks into a restaurant to meet a group of friends. She proceeds to apologize for being late but explains she was looking for parking for the past 20 minutes. This sparked a vibrant discussion that opened their evening. Parking wars is a hot topic in urban environments, with some believing that the world should go to zero car dependency (or somewhere close), others believing owning a car is a right and privilege and have no intention of giving it up, and a lot of opinions and concerns in between.

It’s important to acknowledge the history and complexity of this topic. Owning a car has been built into the fabric of society in America. To the point where if someone tells you they just bought a car, the typical response is “congratulations.” A nod to achieving a piece of the “American Dream,” that includes car ownership. However, vehicle traffic has also contributed to quality-of-life issues including climate change that has a variety of health impacts, traffic congestion and pollution.

To further complicate the matter, parking has become a sufficient source of revenue for cities. Parking provides jobs and tax income that if reduced or eliminated, without thoughtful replacement, could place a strain on City budgets. In Philadelphia, the Philadelphia Parking Authority in 2022 had $275 M in revenue of which $73 M (26%) went to the city of Philadelphia, $18 M (7%) to the Philadelphia School District, and $36 M (13%) went to the PA Department of Transportation. If the City was to wave a magic wand today and grant all the wishes of those advocating to rid the city of cars, the city’s budget would be in peril. It is crucial to account for the lost revenue of important items such as education and the mass transportation infrastructure when considering alternate solutions.

Parking has also become synonymous with terms such as gentrification. Over the past 15 plus years, we have seen a return of urban living that has resulted in residential and commercial development changing the look and feel of neighborhoods. In Philadelphia, one of the most notable projects is the potential building of 76ers arena in Center City. One of the more public backlashes from the stadium is, “Where will I park? Parking and access to the venue will be an absolute nightmare.” However, layered in that is a divisiveness between communities who are opposed to or in favor of the stadium. Complaints about parking has become a way for communities to voice their discontent with changes occurring in neighborhoods.

Approach to Solutions

Reasonable solutions to this complex problem cannot stem from forcing one side to heed to other’s demands. We have to take a more innovative approach that looks at the long-term goals that are implemented in phases, even if the implementation happens over decades.

New Thinking About Parking

Due to the built environment and the long road towards change, vehicles are here to stay for the foreseeable future. MIT professor Eran Ben-Joseph estimates there are 800 million surface parking spaces in the US. This translates into eight available parking spaces for every passenger car. It is projected that by the year 2060, 460 million people will live in the US. (Long, 2014). Following our current trajectory, an increase in population translates into an increase in car ownership. However, this should further incentivize cities to design and manage parking infrastructure in much more efficient ways.

One solution is to help people “rethink” how they think about parking. This can happen through mass transit organizations creating marketing campaigns for people to “Give Us a Try,” persuading current drivers to try mass transit. Another option is motivating people to park once in cities if they are going to multiple locations, incentivizing them with reduced fares for short transit and shared mobility trips to move through various locations.

Emphasize Shared Mobility

Shared mobility, including traditional public transportation, rental, and taxi services is here to stay. But also includes new modes, such as ridesharing with strangers, peer-to-peer car sharing, and shared electric scooters and bikes, pointing to a sizable potential market in the mobility space. In 2019, shared mobility revenues reached 130 billion. By 2030, total revenues are expected to reach between $450 and $860 billion for shared mobility industries. (Heinke, Kloss, Moller, & and Wiemuth, 2023).

The next big innovations in shared mobility include autonomous taxis (robo-taxis) and airborne variants, which have seen a huge acceleration in investment and traction in recent months. There is a range of public and private partnership investments that can help scale accessibility to current and future modalities, helping to ease congestion of parking while providing options for more sustainable living.

Next Steps

As long as people own cars, there will be discussions and arguments on where to store them. While some people will focus on the far ends of each debate. The actual solution will likely end up somewhere in the middle, with more incentives to use shared mobility and public transportation, without completely eliminating the use of cars. Cities are denser areas, where space is a hot commodity, and there are more communities’ interests to balance. The use of cars, parking, and the topic of mobility in cities will continue to evolve as society shifts to the needs of the population.

 

Frank RobinsonFrank Robinson | Robinson@econsultsolutions.com 

Frank Robinson is a vice president with Econsult Solutions, Inc. Mr. Robinson has been a leader in the economic development and sustainable development industries for over 20 years, working with corporate, government and nonprofit clients, banks and credit unions, as well as community development financial institutions (CDFI) and small businesses.

Can your Downtown Benefit from Office Conversions?

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Many cities across the United States are faced with two enduring impacts of the COVID-19 pandemic: vacant office space in their central business districts and a high demand for housing. Many cities across the country, including New York City, San Francisco, Boston, and Atlanta, have adopted or are considering policies to encourage the conversion of offices to residential buildings in their commercial districts.

ESI recently supported New York City’s Office Adaptive Reuse Task Force in developing a report that included a set of recommendations tailored to New York’s unique situation. Here are four lessons we learned from that work that may help you consider whether or not your city should adopt a policy to encourage office conversions.

Know your regulations

There are dozens of hurdles that will prevent an office building from being converted to a residential property—physical design, financing, risk, market conditions, future expectations—but none of them matter if existing land use regulations or building codes don’t allow conversions. Municipal zoning regulations are most likely to affect conversions, but state-level building, health, or safety regulations may also limit the ability of property owners to convert their buildings.

In New York City, there are large sections of Manhattan in which office conversions are either illegal or must meet a series of requirements that make conversions all but impossible. In other parts of Manhattan, office buildings built before 1979 may convert under a set of more lenient regulations than buildings in other areas. The Office Conversion Task Force made several recommendations to harmonize and loosen regulations governing conversions.

Vacancy rates will not dictate conversions

Owners will. When we first started looking at the New York City office market and talking with industry experts, it became clear that there was a subset of buildings in the office market that stood little to no chance of attracting new tenants in a post-COVID landscape. We heard over and over about a sustained “flight to quality,” in which tenants were signing leases for smaller floor area in more amenity rich buildings closer to major transportation hubs.

Landlords with high quality space in desirable locations were happy to oblige the shift, leaving landlords with lower-quality space in secondary locations with excess space. We saw buildings that were 30, 40 and sometimes more than 50 percent vacant with little immediate hope of attracting new tenants. What perfect conversion candidates!

However, most of these buildings are unlikely to convert. Why? Most property owners don’t have the experience to convert a building from one use to another. The risks of trying were too great. Many property owners aren’t willing to sell the building at a loss and would rather wait and see if the market returns. Or they had such favorable terms on loans signed before the pandemic that selling and buying back into the market at higher interest rates made little long-term sense.

Some buildings are more suitable to conversion than others, but most physical constraints can be overcome if someone is willing to pay

The office stock in any given city is a historical record of building materials, techniques, styles, preferences, and space requirements. In New York City, most successful office-to-residential conversions had three common characteristics: they were built before 1940 and had comparatively small floor plates and operable windows. In the 1950s and 60s, businesses demanded open floor plans and innovations in building technologies allowed for ever larger floorplates that continued to expand in subsequent decades.

Modern buildings do present a series of physical design challenges than older buildings, but architects are clever. In conversations with several designers with experience converting offices to residential buildings in New York City, it was clear that there is a design solution to nearly every physical challenge an office building can present. Curtain walls can be replaced to create windows that can open and close. Elevator banks can be moved or removed. Stairs can be installed. Cores can be cut out of the center of a building with large floorplates to allow air and light to reach the interior. Additional floors can be built on top of a building with structural reinforcement. But with every major shift in a building’s design, the costs of conversion goes up, and as those costs go up, property owners and developers will be looking to city governments for incentives.

Office-to-residential conversion is a niche practice, which means financing can be a challenge

Developers in the real estate industry tend to specialize in one building type, for example, high end commercial, low-income housing, large-format retail, or entertainment complexes. This specialization allows developers to deliver buildings with greater efficiency and lower costs. However, most practitioners don’t have experience converting one building type to another, and without a strong track record of success in a given market, lenders may be unwilling to finance conversions.

Office to residential conversions make good urban planning sense. With the right zoning regulations, tax incentives, and financing options, office-to-residential conversions can help meet the demand for housing, help remove excess vacancy from office markets, and bring more foot traffic to neighborhoods that have been struggling since the pandemic began three years ago. However, unless heavily incentivized, office conversions are likely to remain relatively uncommon.

If you are interested in learning more about commercial to residential adaptive reuse, you can contact us here, or read the New York City Adaptive Reuse Task Force Report here.

 

David Stanek | Stanek@econsultsolutions.com

David Stanek, Ph.D., a director at ESI, is an urban planner who specializes in combining data science techniques, geographic information systems, and qualitative research methods to evaluate the role and influence of land use and preservation interventions on residents, places, and municipal budgets. Prior to joining the firm, he was a land use and zoning researcher at the Penn Institute for Urban Research. He has taught land use, urban policy, and public finance at Rutgers University and Hunter College and has consulted on projects for a variety of clients including the World Monuments Fund, Arup, the William Penn Foundation, Ford Foundation, USAID, the Urban Institute, and WSP as well as several municipal governments.

 

The Philly Tree Plan: Sowing the Seeds of a Greener, More Sustainable City

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As cities around the world grapple with the challenges of urbanization, many are turning to nature-based solutions to create more livable, sustainable communities. Here in Philadelphia, the city has taken an ambitious step forward with the Philly Tree Plan, an initiative aimed at increasing the city’s tree canopy cover and enhancing the benefits that trees provide to residents and the environment.

Launched in 2020, the Philly Tree Plan sets out to increase tree canopy in the city to 30% by 2030. This increase in tree coverage is expected to bring a wide range of benefits, including improved air and water quality, reduced stormwater runoff, and a reduction in the urban heat island effect. ESI quantified these benefits and here is what we found:

 

Achieving the desired tree canopy goal is no small feat. It requires a coordinated effort from city officials, community organizations, and residents to plant, care for, and maintain the forestry that will form the backbone of a more sustainable city. To this end, the Philly Tree Plan includes a range of strategies to make tree planting and maintenance a citywide priority. One approach is to work with community organizations and volunteers to plant and care for trees in public spaces, such as parks, streets, and sidewalks. By engaging with local residents and community groups, the city can tap into the expertise and passion of those who are most invested in the health and well-being of their neighborhoods.

In addition, the Philly Tree Plan offers incentives for property owners to plant and care for trees on their land. This not only helps to expand the city’s tree canopy coverage but empowers residents to take an active role in creating a more environmentally-focused, livable city. Finally, the Philly Tree Plan seeks to integrate tree planting and maintenance into city planning and development projects. By prioritizing trees as a key component of urban infrastructure, the city can ensure that they are a central part of the city’s growth and development, not an afterthought.

The tens of thousands of jobs created by the Philly Tree Plan would include numerous potential employment opportunities for workers with less than a bachelor’s degree. These workers would be eligible for various direct employment opportunities related to the Plan, including numerous public-sector tree care and customer service positions. In addition, contracting work associated with the Plan could be used to support new or existing Minority, Woman, or Disabled-Owned Business Enterprises (MWDSBEs) in Philadelphia. This is a critically important opportunity in a majority-minority city where diversity, equity, and inclusion in the private sector is a core concern.

The Philly Tree Plan represents a bold, forward-thinking approach to urban sustainability that puts nature at the center of city planning and development. By sowing the seeds of a greener, more sustainable city, Philadelphia is creating a brighter future for all of its residents.

 

Melissa Wright, Associate Director

Melissa is a former director at ESI. Prior to her time at the firm, she worked for Teach for America as the Director of Performance Measurement and Evaluation. Ms. Wright currently serves as Senior Director for Data and Policy with The City of Philadelphia Commerce Department’s Office of Economic Opportunity.

 

10 for 10: Real Estate

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As part of ESI’s year-long celebration of turning ten, we are looking back on some of our projects over the years. For the month of March, we showcase 10 projects from our real estate practice. Real estate encompasses affordable housing, transit oriented or adjacent development, open space and the environment, and other related concepts. 

1. Market Analysis of the Sharswood Blumberg Housing Redevelopment 

The Philadelphia Housing Authority (PHA) and Hunt-Pennrose Sharswood, LLC are redeveloping 645 housing units in the Sharswood Choice Neighborhood of Philadelphia. As part of the redevelopment process, Hunt-Pennrose Sharswood, LLC retained ESI to complete a market study that examines the unique opportunities and challenges of the Choice Neighborhood, PHA’s mission to provide safe and quality affordable housing, and leverages the city’s population resurgence and the subsequent capital investment in new residential, office, retail, and recreation development. 

Read the full report here.

2. The Economic and Revenue Impact of Data Centers in Pennsylvania 

ESI was retained by a coalition of data center developers and suppliers to analyze the potential growth of the industry in Pennsylvania if a full data center sales and use tax exemption existed, similar to what is available in more than 20 other states. Tax incentives have been cited as a driving factor in recent data center location decisions, but Pennsylvania has fallen behind. Since 2008, the state’s share of national data center industry employment has shrunk from 3.8% to 2.8%. 

Read the report here.

3. Return on Environment: The Economic Impact of Protected Open Space in Mercer County, New Jersey 

Mercer County New Jersey’s emphasis on land preservation began over 30 years ago, resulting in a multitude of preserved parks and open spaces that reflect the diversity of Mercer County’s natural features. Protected open space provides substantial economic, environmental, and health benefits to surrounding communities, but these benefits are often overlooked or undervalued in policy debates and investment decisions. A better understanding of these benefits can demonstrate how protected open space contributes to economic development and fiscal stability and reverses the common misconception that conserved undeveloped land is non-productive and non-revenue producing. 

Read the report here.

4. The Economic Benefits of Historic Preservation Activities in Pennsylvania 

Historic preservation plays a vital role in communities across the Commonwealth of Pennsylvania, providing a multitude of benefits for Pennsylvania and its residents. One often overlooked category of benefits associated with historic preservation activities is economic benefits. Historic preservation efforts can have significant positive impacts throughout the Commonwealth on property values, downtown revitalization, tourism activity, job creation, and tax revenue generation. In this report, ESI calculated quantitative and qualitative impacts, both present and future, that historic preservation had within the Commonwealth.  

Read the report here.

5. Vacant Land Management in Philadelphia: The Cost of the Current System and the Benefits of Reform 

ESI, in conjunction with the Penn Institute for Urban Research, was retained by the Philadelphia Redevelopment Authority (PRA, formerly the RDA) and the Philadelphia Association of Community Development Corporations (PACDC) to conduct a benefit-cost analysis on the 40,000 existing vacant parcels in Philadelphia. ESI was able to quantify the devastating costs of the current system to the City and the potential benefits of a possible reform. 

Both the high costs of the current system and the significant benefits a new approach led our team to conclude that immediate action is necessary to stop the leakage in the City’s welfare, and a more strategic approach is vitally crucial in handling the vacant parcels for the City’s betterment. 

Read the report here.

6. New York City Office Adaptive Reuse Task Force 

In 2022, ESI was engaged by the New York City Economic Development Corporation to provide management and technical support to a city-council mandated task force study that provided strategic recommendations to encourage the conversion of vacant or commercially unviable office space to other uses, with an emphasis on housing. Throughout the project, the ESI team worked closely with the New York City Department of City Planning, who managed the task force. 

The Office Adaptive Reuse Task Force was convened following declines in office utilization in New York City as a result of the COVID-19 pandemic and ongoing work-from-home policies. Historically high vacancy rates, paired with strong demand for housing in high-density commercial districts, suggested an opportunity to examine regulations governing conversions and evaluate the potential of financial incentives to encourage the production of affordable housing. 

Read the report here.

7. Wilmington Land Bank 

In 2015, ESI was commissioned to assist the City of Wilmington in addressing their issues of property vacancy and blight. To clarify the city’s strategy to alleviate vacancy, ESI produced a benefit-cost analysis making the financial case for a land bank in Wilmington. We also produced an operations manual and a briefing book for City Council to serve as a guideline for implementing the Land Bank. 

See what the land bank looks like today: https://wilmingtonlandbank.org/ 

8. Transforming Retail Economics of Neighborhood Development (TREND) 

Retail corridors are among the defining features of urban neighborhoods. As a result, neighborhoods are profoundly affected by changes in the character of their commercial areas. In 2014, ESI worked with RW Ventures to find new ways to define retail corridors and better understand neighborhood change in Chicago.  

Read the report here.

9. The Impacts of SEPTA Regional Rail Service on Suburban House Prices 

ESI used data on single-family house transactions over the 2005 to 2012 period in Bucks, Chester, Delaware, and Montgomery counties to estimate the property value premium that results from being located close to a Regional Rail station. Using a hedonic regression model, we found that proximity, service frequency and commuter parking all contribute strongly to suburban house values.  All told, the property value premium generated by SEPTA Regional Rail stations range from 1% for being located within one to three miles of a station that offers no or base-levels of parking and base service, to 10% for being located within one half mile of a station that provides parking for more than 100 cars and a high level of service. 

 

 Read the report here.

 

10. Academic Publications: Low Income Housing Tax Credit Studies 

Principal Richard Voith and former Associate Director Jing Liu have recently co-authored two studies regarding the impact of Low Income Housing Tax Credits, one examining the Chicago market, and the other examining Los Angeles. Factors Affecting Spillover Impacts of LIHTC Developments: An Analysis of Los Angeles has been accepted into CityScape for publication, and is also one of the ten most downloaded papers in several categories:  

  • ERN: Microeconometric Studies of Housing Markets (Topic) 
  • ERN: U.S. & Canada (Topic) 
  • Econometric Modeling: Microeconometric Studies of Health, Education, & Housing Markets eJournal.
     

Learn more about the Chicago paper here, and the Los Angeles paper here.  

 

If you need assistance in economic consulting for real estate, please reach out here.

 

Peter Angelides, President & Principal | Angelides@econsultsolutions.com

Dr. Angelides focuses his work at the intersection of economics and urban development, including real estate, economic development, city planning, transportation, tax policy, valuation, and litigation. He helps clients pursue economic development, gain entitlements, assess feasibility, and prepare grant applications, among other undertakings. He leads ESI’s Real Estate and Litigation practices, and he often presents findings in public venues, such as courtrooms or public hearings.

 

Linking Transportation and Land Use

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The planning profession often has to look ahead, to see the bigger picture, and help connect people to their destination. One principle that helps achieve this is linkage between land use and transportation. This is vital for organizing at the neighborhood, community, county, and regional scales. Transportation services and infrastructure can impact land use patterns, quality of life of an area, and the overall economic trajectory of a region.

Before going too far in describing how this principle can be applied, it is important to define three components:

Land use – The fundamental setting and context for determining application of the land use/transportation linkage principle. Are you dealing with a local neighborhood issue or something at a higher scale that may involve more agencies to consult or review a proposed solution? Are you in a semi-rural area or a dense urban setting? Both the primary project and the associated benefits may be affected.

Transportation – The key determinant that may involve greater review and comment, depending on the mode (highway, transit, vans, bicycles, etc.), scope of the project, the jurisdiction(s) involved and the level of community outreach and information required. Sometimes, however, a controversial proposal may create a level of public interaction that is beyond the initial physical scale of a project.

Linkage – The key ingredient for the principle to work as designed, in order to yield multiple benefits. Linkage can include physical connections, improved accessibility, coordination, and integration. Recognition by participants that these outcomes are important is needed to yield both direct and indirect benefits. Linkage works two ways: the project affects the geographic area, and the geographic area will affect the project. An open and participatory involvement process typically helps to keep all participants informed and maintaining a stake in the outcome.

All professions have various qualifications, standards, and principles that reflect their values and approaches to the issues that they address on a daily routine. These standards are intended to frame ethics and core education and practice requirements to ensure a fundamental level of attainment for practitioners and academics engaged.

Applying the principle

Conceptually, two examples come to mind which demonstrate how linkage can work. One way is through transit-oriented development (TOD), involving a rail or transit line, including busses. In legislation and in local ordinances, TOD usually involves development within a quarter to a half mile radius around a station. This compact area is intended to facilitate use of transit, including walking, handicap access and close-in parking for driver access. Accessibility to the station and transit platforms is also critical. If the new or existing development does not provide effective accessibility, then the result will become transit adjacent development (TAD) rather than TOD. The TOD area can also be used to provide development bonuses for locating there, as well as a rationale for financing mechanisms to capture a portion of the value of new investments to derive funds for other municipal projects. In Pennsylvania, the Transit Revitalization Investment Act (TRID) is intended to support the creation of TODs and the simultaneous funding approach for other investments.

Another way to showcase linkage is through interchange area districts involving cooperating developers, office parks, and shopping centers to create an incentive for locating around the interchange and a financing approach for needed public improvements to benefit both the community and the participants. Here in the Greater Philadelphia region, PennDOT has been an active partner with Business Improvement Districts (BIDs) in Chester (Rt.29 and 202) and Montgomery counties (King of Prussia/Upper Merion) have been successful in such approaches, including working with local Transportation System Management Agencies (TMAs) for supplemental van services in coordination with SEPTA where possible.

How we can help

Land use and transportation linkage works and is available for use in a variety of settings beyond the two instances that I have described. Now is a particularly critical time to identify opportunities to leverage this principle. Understanding how transit adds value to development projects and determining how it can support broader community goals and objectives is crucial for long-term success. Situations like TOD investment will play a significant role in the years to come because of the American Jobs Plan providing significant federal investment across the United States. ESI combines economic, strategic, and analytics capabilities to help clients navigate an ever-changing environment and achieve these types of objectives. Likewise, thoughtful engagement with decision-makers, stakeholders, and the public provides the foundation for sound planning, successful projects, and better communities.

 

Richard Bickel | Bickel@econsultsolutions.com

Richard Bickel is a member of ESI’s Senior Advisory Board. He has been a practicing professional planner for more than 43 years. Richard has been active in the American Planning Association, American Institute of Certified Planners, and Transportation Research Board throughout his career. He currently serves on the Legislative Committee of the Pennsylvania Chapter of APA and was President of the Eastern Pennsylvania Chapter of the APA, one of the forerunners of the current statewide chapter, and a member of the national Legislative and Policy Committee and a site visitor for the Planning Accreditation Board.

The Impact of Insufficient Retirement Savings in Pennsylvania, 2020-2035

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In an update to our 2018 report produced by ESI for the Pennsylvania Retirement Security Task Force, which undertook analysis of the statewide revenue and expenditure implications of insufficient retirement savings in Pennsylvania over the 2015-2030 period, we looked at updates to each category of statewide and county-level impacts for the years 2020-2035.

Pennsylvania’s elderly (65+) population is projected to grow from 2.49 million in 2020 to 3.04 million in 2035. This growth in the elderly population will have a variable impact on Pennsylvania’s fiscal position depending on retirees’ financial preparedness. Those with sufficient savings will rely less on many state funded programs and have more disposable income available to circulate in the state economy while those with insufficient savings will be more dependent on state programs and circulate less money through the economy resulting in less economic output for Pennsylvania and few jobs and earning opportunities in the workforce.

Pennsylvania retiree incomes in 2035 are projected to fall short of recommended replacement rates by an average of around $7,800 in 2035 for the 1.2 million elderly households with less than $75,000 in annual income. At a standard market return, enhanced savings of around $160 per month (or around $1,900 per year) over 30 years would generate sufficient additional income to address this average gap.

Program expenditures for elderly Pennsylvanians are expected to grow significantly due to the aging population and excess medical cost growth. Over this fifteen-year period, Pennsylvania’s cumulative state cost growth from insufficient savings is estimated to total $14.6 billion and a cumulative tax revenue losses total $3.2 billion over the 2020-2035 period.

To learn more about our findings and view the interactive dashboard, visit the Pew Charitable Trusts website.