The Sky is the Limit
When it comes to parking, the sky is the limit for just how high prices can go. The rules of supply and demand can become a little extreme when you are talking about parking spaces. Let’s look at a story that was on NPR this morning about a new project in New York City. As reported in the article “Buy Condo, Then Add Parking Spot for $1 Million”
A new development, 42 Crosby Street, is pushing the limits of New York City real estate to new heights with 10 underground parking spots that will cost more per square foot than the apartments being sold upstairs.
How does this happen? Developers are building new projects with fewer parking spaces. This creates huge demand for limited parking spaces and as monthly parking rental costs rise the value of owning a space increases. While New York City is certainly the extreme, it only takes one trip downtown to realize just how scarce parking has become. No one wants to park blocks from their building, especially when winter arrives. Parking rules that limit parking to 2 hours until a certain hour (often 10 pm) downtown have created a culture in such neighborhoods as Riverfront Park where people set timed reminders for themselves to move their car until the magic hour arrives. This reminds me of the old Seinfeld episodes where parking spaces on the street were valued like gold. Remember the episode where George fills in for the gentleman who has a job just moving cars on certain days of the week. Yep, that is how strongly people work to have a space for their car.
Sure, we have a great and growing light rail system. Our weather and the attitude of our residents lends itself to more biking, walking, and car sharing. But that doesn’t change the fact that we are still a car driving city. Many of our friends and clients who are couples love living downtown and have learned that with so many restaurants, shops and amenities to enjoy outside their front door they only require a one bedroom space. The do, however, often require (or at least desire) two parkings spaces. However, almost all one bedroom condos and many two bedroom sold downtown only allowed one parking space. So now you have a market where building residents rent parking spaces from other residents or from parking garages downtown.
Or they wait, and wait, and wait, for the rare occurrence when someone offers a parking space for sale. And when they do come up for sale they can be expensive.
Glass House and SPIRE Parking Spaces
Glass House was one of the first to see parking spaces skyrocket. During initial sales at the Glass House every unit was sold with one parking spot except the penthouses, which had two. The additional spaces in the building were then offered for sale to anyone who purchased a two bedroom. No additional spaces were available for one bedroom owners.
Because there were not enough spaces for every two bedroom unit to buy a second space they developer tried to slow down the sale of two bedroom spaces (back in 2006) by doing price increases. At first additional parking spaces were $15,000. That lasted almost no time at all before the price was increased to $25,000. This price didn’t slow down demand either so prices very quickly were raised to $40,000 which seemed to be the magic number to slow demand.
SPIRE approached this differently. They sold the units with NO parking spaces assigned which made it more affordable to get a condo downtown if you could rely on light rail and car sharing. The sales process at SPIRE focused heavily on reinforcing the fact that light rail and BCycle was across the street and they struck an agreement with Connect by Hertz who located an office in the base of the building. For many who opted to go parking space free their purchase included some car share or BCycle membership.
For those who did want a SPIRE parking space the prices ranged from under $10K (for scooter or motorcycle parking spaces) up to $55K. The cost of the space was based on how low in the garage you wanted to be. For example, what was considered a premium space on the first level might be $55k but a space at the top might be $25K. It all depends on how much you value the number of loops you have to do every day for the lifetime of your condo.
But for residents of Glass House or SPIRE (and the many other buildings downtown) there is no developer option. Now owners have to wait and hope someone offers a parking space for sale. The Glass House bulletin board is filled with posting from people seeking parking spaces to buy or rent.
So what is a parking space worth downtown? We will have to wait until the next one comes up for sale and see.
But at least it won’t be a million dollars. At least not this year. Of course you can rent a space for roughly $150 to $200 a month. Here is a website with parking rates and details http://denver.parkingspotter.com/lower-downtown.