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Ancillary Income: Can Parking be a New Revenue Stream?

 

As the preferences of residents in urban areas continue to gravitate toward newer, hip forms of public transportation, apartment owners should be watching eagerly.

 

 Fewer and fewer residents in high-density areas are opting to own cars, causing them to place a higher priority on car-share and ride-share services than on parking. Initially, downtown communities might have met this trend with disdain, wondering what they were going to do with all those extra parking spots.

 

 

But the concept that spurred this trend – the sharing economy – is also the answer of how to address it. Those empty spots serve as an ancillary income opportunity that can not only generate additional monthly revenue, but add overall value to the community. While residents opt for alternative forms of transportation, you can fill those increasingly vacant spots by utilizing a park-share concept.

 

Even though some of your residents might not park at your community because they don’t have a vehicle, spaces are still at high demand for those who commute to the area for work or entertainment.

 

A look at a study by the National Multifamily Housing Council on Urban vs. Suburban Housing Preferences reveals a clear picture of the disparity of resident preferences. While parking is a primary interest for close to 95 percent of residents in areas with household densities in the 94th percentile or less, the number declines in markets at the top end of the scale. In turn, interest in bike-share and car-share programs elevates in those markets.

 

For neighborhoods in the 95th percentile or above of household density, such as the North Park area of Downtown San Diego, parking remains a priority for about 88 percent of residents, which is still a strong share. But that number is matched by residents interested in bike-share services, and exceeded by those interested in car-share services (91 percent). Interest for those services hovers in the lower 80-percent range in lower-density areas.

 

The numbers shift even further in pronouncedly higher-density areas (10,000 homes or more within a square mile), such as Jersey City, NJ and Cambridge, Mass. Interest in parking declines to about 81 percent while interest for car-sharing services (96) and bike-sharing services (89) continues to climb.

 

Translation: Many of those high-density areas are rich with ancillary income opportunities through parking. That’s not exclude suburban and less dense areas from the same opportunity, particularly those where nearby attractions or employment districts create parking demand. Expect the trend of residents deprioritizing parking to continue, regardless of density, as the popularity and availability of auto-sharing and on-demand transportation services increases.

 

At the NMHC Apartment Strategies Outlook Conference (Jan. 23-26), Andrew Livingstone, executive managing director for property management for Greystar, noted that “Airbnb-type marketplaces offer opportunities to tap into premium income.”

 

By an Airbnb-type marketplace, Livingstone isn’t only referring to home-sharing opportunities. It’s anything that pertains to economy-sharing. Some communities are now sharing office space, amenity space for parties and essentially anything else that can be of value in the market.

 

Parking is among the prime opportunities, and if utilized efficiently, can produce significant value, in some cases up to $100,000. Businesses often are seeking a central location for their employees to park. Communities nearby key employment centers and business districts possess a highly sought-after commodity with their extra space. The opportunities are there. It simply a matter of utilizing them.

 

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