Rules that require new apartment developments to include off-street car parking are driving up the cost of new housing provision and should be scrapped, a think-tank suggests.

And state and local governments should better manage on-street parking demand and should enable off-street parking spaces to be purchase or leased independently of the home.

In its latest report, the Grattan Institute has examined off-street car parking requirements which apply to new apartment projects across Australian cities.

Overall, it found that such requirements are needlessly driving up the cost of building new apartments.

According to the report, the cost of providing off street parking in new apartment developments is substantial.

Across Sydney, Melbourne, Brisbane, Adelaide and Perth respectively, costs associated with off-street parking for a typical two-bedroom apartment amount to $70,000, $62,000, $113,000, $95,000 and $137,000 respectively.

Furthermore, the report argues that much of this is unnecessary.

Indeed, it argues that many apartment residents do not need or want parking.

All up, around 40 per cent of households in studio or one-bedroom apartments and 19 per cent of households in two-bedroom apartments do not own a car, it says.

Meanwhile, 58 per cent of households in family-sized apartments with three or more bedrooms either do not have a car or have only one car.

As a result, the report argues there is a mismatch between the amount of car parking space which developers are required to provide in new apartment complexes and that which is actually needed.

Across both Sydney and Melbourne, off-street parking currently accounts for around 13 percent of the built-floor space of apartments.

However, as many as 40 percent of these spaces sit vacant each night.

Grattan Institute CEO Aruna Sathanapally said that this is needlessly adding to the cost of new housing provision.

‘Many people who live in apartments don’t want or need car-parking, but they are forced to pay for it anyway,’ Sathanapally said.

The latest report comes as requirements for off-street car parking have emerged as point of discussion as governments try to unlock more housing in infill areas.

Around Australia, minimum off-street car parking requirements were introduced into planning schemes in the 1950s to accommodate rapidly increasing vehicle use and pressures on street car parking.

Most states impose minimum car-parking rules for new housing developments. (An exception is Queensland, where the state does not set requirements but delegates the ability to do this to local councils.)

In some states, local councils have the ability to vary these rules by use of local planning instruments (refer p7 of the report).

Now some states and councils are looking at winding back these requirements.

In Victoria, new rules that were announced late last year abolish minimum car parking requirements in areas which are close to public transport.

Meanwhile, several inner Sydney councils have moved to establish maximum rather than minimum requirements for apartments either across entire council areas or in designated centres.

Abolish requirements for new housing

In its report, the Grattan Institute argues that several actions should be taken.

First, state and local government should remove parking requirements for new housing developments.

According to Grattan, doing this mean that developers still delivered the amount of parking which residents need but would not need to deliver additional parking space beyond that which is genuinely required.

Next, state and local governments should better manager demand for on-street parking in high demand areas.

This could be done via permit schemes, time limits and user pricing.

As things stand, Grattan says that most on-street parking is free to use and is typically occupied by residents who already have off-street spaces.

Finally, Grattan argues that off-street parking spaces should be able to be purchased or rented separately from housing.

Allowing this to occur would ‘unbundle’ car spaces from homes and would give residents greater choice to purchase or rent parking which is in line with their needs, it says.

Apartment owners cautiously receptive

Apartment owner advocates are cautiously receptive to the report’s recommendations.

“Car parking is a hot topic for apartments, especially visitor parking,” Sam Reecee, chief executive officer of Australian Apartments Advocacy says.

“AAA agrees that once people move into an apartment, that is well connected to their local services and public transport, their need for a car reduces – and hence the recommendation to unbundle carparks to apartment sales is a viable option.

“However, AAA also believes a shared care scenario whereby you have a scooter, people mover, bambino and ute (to move furniture) available to residents for hire, would also be another solution to reduce the need for a second car.”

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