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HomeMy WebLinkAboutParking Research PC Sub-Committee Report - FinalPage 1 of 10 Planning Commission Subcommittee Report on ADU Parking April 21st, 2022 Prepared by: Rick Janke and Viki Sonntag A Planning Commission (PC) sub-committee, consisting of Commissioners Viki Sonntag and Rick Jahnke, was formed at the 24 March 2022 meeting of the PC for the purpose of reviewing the research on the impacts of accessory dwelling unit parking requirements. This review is intended to inform the commission’s deliberation of whether changes in ADU parking requirements are merited. This report summarizes our findings and conclusions. The subcommittee met in person on 8th and 27th of April and with Planning Manager Judy Surber also on April 27th and has exchanged information by email. A record of these exchanges can be found at: https://drive.google.com/drive/folders/1W7cF3Ne9z3lTflsGQCAWpeO7q2okuMnO Context The nation-wide housing crisis has spurred government at all levels to consider new policies to increase lower-income housing development, including removing barriers to its supply. Municipalities have an important role to play in reducing these barriers. One focus has been on infill housing as infill housing units are among the least costly to develop, while ADUs are one of the least expensive infill options. Research on the impact of ADUs on affordable housing dates back around ten years but evaluation of the impacts of more liberal ADU parking requirements are just becoming available (5,9,10). This is reflected in the research compiled in this report: the research is focused on the more general question of removing barriers to ADUs and the evaluation studies are of urbanized areas. However, the research does provide evidence of the broader impacts of ADU parking requirements, particularly as it relates to housing affordability. Problem Statements • The persistent undersupply of lower-priced housing in Port Townsend has generated a housing crisis resulting in sky-rocketing rents and housing prices. Long-time residents have been displaced from the city. In addition, the lack of lower-priced housing has been identified by the Jefferson Healthcare, the City Police Department, the Port Townsend School District, and City officials as a hindrance to recruiting new and retaining established employees. Similar frustrations have been expressed by many local business owners. • In general, off-street parking requirements increase the cost of housing development which reduces the supply of lower-priced housing. More specifically, off-street parking mandates can reduce ADU viability. • While many cities have enacted laws allowing for ADU construction, some common regulations make adding an ADU too burdensome for homeowners interested in development. Why ADUs • Compared to market rate multi-family development, ADUs require substantially less capital and time to develop, accelerating their impact on the supply of affordable housing. (5) Page 2 of 10 • ADUs can: increase housing supply without changing the physical character of neighborhoods; provide a potential wealth-building opportunity for cost-burdened homeowners; allow elderly residents to age in place while maintaining privacy; and provide multi-generational housing options. (6) • ADUs increase social equity by giving more low-income residents access to the amenities that are typically found in higher-income areas. (5) Housing Affordability • Building parking spaces can cost the homeowner $3,000–$5,000 per space, excluding curb cuts. With financing from a 10 year, 4% interest loan, a $5000 increase in cost to build results in a $50 increase in rent per month to cover the loan, or $600 annually. Renters would need an additional $2000 in annual income, or 6.7% of Port Townsend’s minimum wage annual income of $30,139, to afford this rent increase based on the 30% of income limit for affordability. See Appendix A to this memo for further impact analyses. (4) • “While not always affordable, ADUs are typically rented at or below market rate. Data from Portland shows that 15 percent of ADU inhabitants pay no rent, while in San Francisco, ADUs rent for 19 percent less than market rate rental units.” (1) • Garage conversions are one of the most economical forms of ADU construction. Eliminating parking capacity from an existing garage may leave the lot without enough space to meet combined parking requirements for the main house and new ADU. (6) • By increasing the land needed per residential unit, increased surface parking reduces the maximum potential development density (units per acre). Lower density increases price of land per dwelling unit. “This impact is proportionally greatest for smaller units. For example, increasing parking requirements from one to two spaces per unit reduces the maximum potential density for two story, 500 square foot bachelor apartments from 88 to 64 units per acre, representing a 37% decline, but only causes a 13% reduction in maximum density for 2,000 square foot townhouses.” (9) • Construction financing agencies often require that new building retail prices be at least 3 times original land costs. Each additional dollar of land costs for parking therefore increases housing prices by three dollars. (9) Housing Supply • The 2012 ADU survey provided in the 24 March Planning Commission meeting packet reports 153 units. Permit records for 2013 through 2021 provided by staff suggest an additional 90 ADUs have been permitted implying that there is now a total of 243 ADUs in Port Townsend. The 2012 survey found that 42% of ADUs were rented. If the same rate has continued to date, 102 ADUs are currently rented. Thus, while growth has been slow, ADUs have become an important lower-cost housing option for Port Townsend residents. • A survey of California East Bay homeowners in 2012 found that homeowners who had tried and failed to build an ADU commonly reported that the inability to fit the required additional parking was their primary reason for giving up. (11) Page 3 of 10 • A suite of ADU regulation reforms was enacted in California in 2016-2017, including: certain ADU permits be approved ministerially rather than through a discretionary process, limits on the parking requirements that localities can impose on ADUs, and curbs on utility connection fees for ADUs. The effects of these changes appeared quickly: between 2018 and 2019, the number of ADU permits in California increased from 6,000 to 16,000. (10) • Lack of accessible parking to fulfill requirements can serve as a major deterrent to a resident who wishes to construct an ADU. A wide range of physical constraints can prevent lots from accommodating off-street parking spaces, including the placement of the main house on the lot, irregular lot shapes, lack of alley access, trees, slopes, and other natural features. A 2020 survey of California ADU owners found that half found it difficult to build their ADUs to their jurisdiction’s development standards with parking requirements among the top challenges. (6) Equity • “Since parking costs increase as a percentage of rent for lower priced housing, and low income households tend to own fewer vehicles, minimum parking requirements are regressive and unfair.” (9) • Standardized residential parking requirements, such as in Port Townsend’s minimum per dwelling unit requirement, forces lower income households who own fewer cars to pay for more parking than they need to accommodate need for more parking of higher income households at no extra cost. (9) • “Residential parking standards are calculated per unit, so parking land costs are a greater percentage of total costs for smaller units.” (9) • ADUs can provide a wealth-building opportunity for cost-burdened homeowners. The added cost plus larger lot size needed to fulfill off-street parking requirements would likely only be possible for higher-income homeowners. In general, off-street parking is a bigger barrier to ADUs the smaller the lot. Homeowners of smaller lots tend to be less wealthy. (4) Transportation and Infrastructure • Over the last 10 years (2012 – 2021), 95 ADUs have been permitted in Port Townsend, suggesting an average growth rate of 9.5/yr. If housing rental rates of 42% reported in the 2012 survey still apply, this implies that 4 ADU rentals are added to the city each year. The elimination of on-site parking requirements for ADUs would add 12 – 20 cars to street parking city-wide over 3 to 5 years. As there are approximately 80 miles of paved roadways in Port Townsend, in most locations this impact would be minimal. Even if ADU construction doubled in response to relaxed parking requirements, the on-street impacts would be relatively minor. • Insufficient on-street parking is one of the concerns most commonly cited by neighboring households in opposing proposed ADUs. However, a 2021 study of ADU impacts on parking availability in Sacramento California showed that, “When we combine off-street and on-street parking supplies, we find that households have an average of 1.6 more parking spaces available to them than they have vehicles. That parking surplus is more than enough to accommodate the average ADU tenant and their vehicle, belying claims that ADUs will overwhelm existing parking supplies in single-family neighborhoods.” (8) Page 4 of 10 • Studies of communities that have more flexible ADU development regulations show that they had little impact on traffic or parking congestion. Surveys show most residents who live in neighborhoods where ADUs are common said they had no negative impact on parking. Studies have also shown that tenants of ADUs are less likely to own cars. (3,4) • “Since off-street parking is a fixed cost (households must pay it whether or not they own a car), fixed parking standards encourage automobile ownership and use.” (9) Environment and Climate • “Paved land, biologically barren and unattractive, tends to reduce adjacent property values, increases water pollution and stormwater flooding, reduces visual and acoustic privacy, and causes urban heat island (increased local temperatures).” (9) • In 2020, the City/County Climate Action Committee released an update of greenhouse gas emissions (7) and concluded that 66% of emissions emanating from within Jefferson County are associated with transportation activities. Efforts to reduce local emissions are appropriately focusing on reducing vehicle miles traveled by promoting the use of public transit and other modes of transportation such as walking and biking. Reducing vehicle ownership and vehicle miles traveled remains an important strategy for stretching household incomes and reducing climate change emissions. Changes in ADU Parking Requirements  While many municipalities continue to require off-street parking for ADUs, those who have recently revised their code have eliminated or reduced this requirement and many more are in the process of doing so. Regionally, the more recent trend is to eliminate or reduce off- street parking requirements for ADUs. Examples of those that have eliminated off street parking for ADUs include Seattle, California and Oregon: o Seattle Municipal Code 23.44.041.A.6. No off-street parking is required for accessory dwelling units. An existing required parking space may not be eliminated to accommodate an accessory dwelling unit unless it is replaced elsewhere on the lot. One on-street parking space can be counted toward the total required parking per dwelling unit when the property is on a street that meets current street design standards with a minimum 8 foot parking lane and there is 22 feet of unrestricted, on-street parking directly adjacent the property. o California State Law: Parking requirements for ADUs shall not exceed one parking space per unit or bedroom, whichever is less. These spaces may be provided as tandem parking on a driveway. When a garage, carport, or covered parking structure is demolished in conjunction with the construction of an ADU, or converted to an ADU, the local agency shall not require that those off-street parking spaces for the primary unit be replaced. A local agency shall not impose ADU parking standards for a number of conditions such as being within 1/2 mile of walking distance from public transit and of a transit hub or when the ADU is part of a proposed or existing primary dwelling unit or accessory structure. (2) Page 5 of 10 o Oregon State: As of 1 January 2020, local jurisdictions may not mandate off-street parking spaces for ADUs (there are some exceptions for communities under 2500 in population and not within a designated Urban Growth Boundary).  Port Angeles revised its parking requirements for ADUs in 2021. From the city’s Municipal Code, Paragraph 17.21.020.B.7: “Accessory dwelling unit (ADU) Parking. The off-street parking requirements set forth in Chapter 14.40 must be provided and maintained for the primary dwelling. No additional parking is required for an ADU. Additionally, one on-street parking space can be counted toward the total required parking per dwelling unit when the property is on a street that meets current street design standards with a minimum 8 foot parking lane and there is 22 feet of unrestricted, on-street parking directly adjacent the property.” Port Angeles also only requires one parking space for zero and one-bedroom units. Conclusions  The benefits of ADUs in providing low-cost housing options are significant. They are among the least costly housing infill options and take less capital and time to construct.  In addition to reducing the cost of providing additional housing units to meet demand for affordable lower-priced housing, eliminating parking requirements may provide multiple benefits including discouraging car ownership, reducing over-supply of residential parking spaces, discouraging car ownership, increasing property value, increasing social equity, decreasing environmental and climate change impacts, and increasing housing equity.  Significant increases in ADU production are likely the result of both creating positive incentives and eliminating barriers.  Off-street parking requirements present a potential barrier to ADU development. How much of an impact removing this barrier due to unique conditions of Port Townsend is uncertain.  The impact of reducing parking requirements on street deterioration is likely be to be negligible. Recommendations Based on the research findings, the PC sub-committee recommends the following:  Eliminate on-site ADU parking requirement.  Allow one on-street parking space to count towards the parking requirements for existing primary dwelling units.  Eliminate requirement for parking space to be replaced when a garage, carport, or covered parking structure is demolished in conjunction with the construction of an ADU, or converted to an ADU provided that the parking minimum for the primary dwelling is met. The sub-committee further recommends specific wording for the code amendment as follows: No additional parking is required for accessory dwelling units. An existing required parking space may not be eliminated to accommodate an accessory dwelling unit unless it is replaced. One on-street parking space can be counted toward the total required parking per primary dwelling unit when the property is on a street that meets current street design standards with a minimum 8 foot parking lane and there is 22 feet of unrestricted, on-street parking directly adjacent the property. Page 6 of 10 In addition the sub-committee requests that the City Council charge the Planning Commission with assessing parking requirements for multi-family housing, boarding houses, and zero and one bedroom houses. References 1. Accessory Dwelling Units and Regulatory Tools. 2020. Raleigh Urban Design Center report. 2. Accessory Dwelling Unit Handbook. 2020. Report by the California Department of Housing and Community Development 3. Accessory dwelling units in Portland, Oregon: evaluation and interpretation of a survey of ADU owners. 2014. Oregon Department of Environmental Quality report. 4. Designing Accessory Dwelling Unit Regulations. 2020. Urban Institute report. 5. Hidden density in single-family neighborhoods: backyard cottages as an equitable smart growth strategy. 2014. Journal of Urbanism International Research on Placemaking and Urban Sustainability. 6. Implementing the Backyard Revolution: Perspectives of California’s ADU Owners. 2021. UC Berkeley Center for Community Innovation report 7. Jefferson County, Washington, 2018 Inventory of Greenhouse Gas Emissions; 2020 Climate Action Committee report. https://www.co.jefferson.wa.us/DocumentCenter/View/10166/2018_JeffCo_GHG_Inventory_R eport_approved_062420 8. Not enough parking, you say? A study of garage use and parking supply for single-family homes in Sacramento and implications for ADUs. 2022. Journal of Transport and Land Use. 9. Parking Requirement Impacts on Housing Affordability. 2021. Victoria Transport Policy Institute report. 10. Reducing Regulation Expands ADU Construction in California. 2020. Regulatory Barriers Clearinghouse, US Department of Housing and Urban Development 11. Understanding the Market for Secondary Units in the East Bay. 2012. Institute of Urban and Regional Development, University of California. Page 7 of 10 Appendix: Memo from Earl Murman, Housing Solutions Network, to Viki Sonntag, April 1oth, 2022. Cost Impact of ADU Off-Street Parking Creating an ADU that can be used for affordable workforce rental is a challenging exercise in making it “pencil out” as addressed in The ABCs and 123s of ADUs and the ADU calculator available on the HSN ADU webpage. The City of Port Townsend requirement (see Reference) of a 9’ x 19’ off-street parking space for an ADU could contribute to construction costs, which in turn would contribute to the ADU rental rate, which could then impact the affordability of the rent by a member of the workforce. This note addresses how such costs would translate into increases in the rental rate. The actual cost for the off-street parking space would be site dependent and is not addressed in this note. It is assumed that the cost of the off-street parking space would be part of the overall financing need for the ADU project. As addressed in The ABCs and 123s of ADUs, the main financing options include home equity loans, refinancing of the primary residence, and borrowing from local investors. Each of these options could have somewhat different loan durations and interest rates. Local lenders tend to expect loan repayment in about 5 years. Home equity loans or Home Equity Lines of Credits tend to require repayment in 10-20 years. Conventional refinancing mortgages could have up to 30-year loan repayment. Current interest rates could range from 3% to 5% for all of these. $- $50 $100 $150 $200 $250 $300 $5,000 $7,500 $10,000 $12,500 $15,000Rent Cost of Off Street Parking Space Rent Increment to Pay for Parking -4% loan 5 year 10 year 15 Year 30 year Page 8 of 10 This chart shows the corresponding increment in ADU rental rate for different costs associated with the off-street parking and for different durations of a 4% loan. For example, an off-street parking space that cost $10,000 would lead to a $101 per month increase in the ADU rental rate if the project was being financed by a 10-year loan with a 4% interest rate. For reference, affordable rents (including utilities) range from about $750 for a minimum wage worker to about $1,600 for a household making the Area Median Income (AMI)1. The impact of this increase rent can be looked at through the lens of the increase of income needed by the tenant to pay the rent. Using the guideline that housing costs should not exceed 30% of the household gross income, the rental increment can be converted to the income increment needed to pay the rent. For example, the $10,000 off-street parking space financed by a 10 year loan at 4% translates into about a $4000 increase in household income needed to make this rent affordable. For reference a full time minimum wage worker earns $30,139 while the AMI household earns $57,693. 1 https://housingsolutionsnetwork.org/affordablehousing101/ $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $5,000 $7,500 $10,000 $12,500 $15,000Income IncrementCost of Off Street Parking Space Income Increment to Pay for Parking -4% Loan 5 year 10 year 15 year 30 year Page 9 of 10 Small changes in interest rates have only a minor impact on the rent that would need to be charged to pay for the off-street parking space. For example, for the $10,000 cost of off-street parking, the impact on the rental cost would vary from $97 to $106 for loan interest ranging from 3% to 5% for a 10 year loan. References From City of Port Townsend ADU General Information “Per PTMC 17.72, Off Street Parking and Loading, two on-site parking spaces, each a minimum of 9 feet wide by 19 feet long, are required for each single-family residence, and one additional 9-feet wide by 19-feet long on-site parking space is required to establish an ADU, provided the off-street parking requirements for the other uses on the site are continuously met. If the property owner can demonstrate that there is no way to provide parking on-site, an on-street parking space may be proposed, subject to approval by the Public Works Director (PTMC 17.72.080, Footnote 1).” $- $25 $50 $75 $100 $125 $150 $175 $5,000 $7,500 $10,000 $12,500 $15,000Rent Cost of Off Street Parking Impact of Interest Rate on Rent for 10 Year Loan 3%4%5% Page 10 of 10 Footnote 1 – “The design, placement and proposed construction standards of all on-street spaces proposed to satisfy this requirement shall be reviewed and approved by the public works director, and meet city street standards unless waived or modified based on documented factors including consideration of topography, surrounding conditions, drainage, preservation of pervious surface; and be available on the same side of the street fronting the residence where the ADU is located.”