Hybrid Work Has Made Parking A Whole New Ballgame

New work patterns taking a heavy toll on office usage might be old news, but they are also taking a bite out of a less-often-discussed industry: parking.

Hybrid schedules have upended parking predictability in urban centers and within housing projects. Developers are adapting to changing times with new pricing plans, upgraded parking facilities and mobility hubs that combine parking, transit and short-term bike rentals in one convenient package.

“In Wilmington, we’ve gone through the same revolution that everybody else has gone through post-Covid,” Colonial Parking President Jed Hatfield said last week at Bisnow’s Delaware State of the Market event at 1313 N. Market in Wilmington. “The majority of our customers that we were serving day in, day out were coming to work, coming in five days a week. … Then a little pandemic hit that was going to last a couple of months and went on for over two years, and it changed that world for us.”

Bisnow/Julianna Short

Woodlawn Trustees’ Rich Przywara, Mosaic Development Partners’ Leslie Smallwood-Lewis, Colonial Parking’s Jed Hatfield, Washington Place Equities’ Dominic Wiker and Potter Anderson & Corroon’s Joy Barrist

Commercial parking companies’ revenues plummeted by 70% to 90% early in the pandemic, according to the International Parking & Mobility Institute, a professional organization for transportation and parking professionals. Business has since bounced back — and then some. The industry raked in $121B in 2022, according to Jerry Marcus of the Parking Advisory Group, and was set to land at $144B last year, 10% above the 2019 mark.

But the prevalence of hybrid work has changed traffic patterns, disrupting the reliable ebb and flow of parking structures. That has also disrupted the flow of cash that commuters once paid monthly or annually.

Some operators have responded by investing in new technology, such as apps that allow sporadic parkers to make reservations and pay on their cellphones and technology that reads license plates and charges automatically as drivers enter and exit a parking facility. Others are using technology to change prices on the fly according to traffic flow, dropping prices when it is slow and hiking them when demand is high.

Colonial Parking, which operates 40 lots and garages in Wilmington, has also had to rework its business operations to cater to hybrid workers.

“We very significantly changed the way we did business,” Hatfield said. “We adapted parking facilities in Downtown Wilmington that are really largely meant to capture all the different users of downtown and started creating pricing models that would meet the one-to-three-day-a-week people coming into town to work.”

Fifty miles away, in Dover, Delaware, Philadelphia-based developer Leslie Smallwood-Lewis is also tackling parking in new ways as part of the redevelopment of 120 S. Governor’s Ave., a six-story mixed-use complex that will include a grocery store and other retail, as well as 140 rental units.

Working with Colonial Parking, Mosaic Development Partners, the firm Smallwood-Lewis co-owns, will build a one-stop transportation center that includes a 300-spot parking garage that will also serve downtown workers and will include a bus stop, electric vehicle charging and short-term bike rentals. The two projects, plus infrastructure upgrades expected to cost $94M, got a shot in the arm this week when Delaware Gov. Jay Carney announced $25M in state funding, including about $15M from the state’s share of American Rescue Plan Act funds. 

The projects are part of a larger $500M master plan to redevelop Downtown Dover.

“We’re not going to have parking kind of spread out. We’re going to really bring it all together,” Smallwood-Lewis said, adding the structure would be developed by Colonial Parking for maximum space efficiency.

Bisnow/Julianna Short

Buccini Pollin Group’s Chip Walters, Delaware Financial Group’s Andy Lubin, WSFS Bank’s Phillip Hough, Johnson Commercial Real Estate’s Scott Johnson and JLL’s Jamie Vari

Smallwood-Lewis said Mosaic made it clear to the city that it would need help with the cost of any parking project given land acquisition and development costs. It also asked the city to review its zoning ordinances around multifamily parking, which several panelists said are arbitrary and make less sense with people living and working differently.

“We have really been having very, very good and productive conversations with government,” Smallwood-Lewis said. “And they’re understanding it. They’re embracing it.”

Mosaic built a similar transportation hub to serve its life sciences, retail and residential projects underway at Philadelphia’s Navy Yard, and she said it is a solution that makes projects work economically. 

In Dover, the mobility hub solves several issues and reflects a growing acceptance by municipalities that outsized parking requirements aren’t just costly for developers but also lead to higher rents. More than 1,400 U.S. municipalities are rethinking the appropriate amount of parking, eliminating or reducing parking minimums, or enacting parking maximums, according to Parking Reform Network.

Hatfield called it “a sea change” in thinking, both locally and nationally. Centralizing and cutting back on those requirements for the mobility center rightsizes the project and slashes costs while allowing it to serve multiple needs.

“So a resident that needs it at night will leave it available for people that are coming into work during the day and create a much more efficient and price-appropriate parking option for new projects to happen,” he said.

While cities and towns are being persuaded that less parking is the way forward, not all tenants are sold, according to Dominic Wiker, vice president and director of development for Baltimore-based Washington Place Equities, which opened the 150-unit River House apartment complex overlooking the Christina River in Wilmington to tenants this past summer.

Wiker said Washington Place Equities found market expectations were higher than local zoning codes. To meet that expectation, the company added another parcel it owned to include more parking for the project. The experience got him and his colleagues thinking about how to do it better the next time given that most of the company’s developments have allocated 2.5 spaces per unit.

Parking isn’t going away soon, he said.

“But I do think we’re at more than an inflection point of a kind of a changing market,” Wiker said. “We’re seeing, across our portfolio, less and less parking revenue, which says to us, people just aren’t parking in the same way that they would have been a few years ago. There’s just less cars.”

This article was originally published by a www.bisnow.com . Read the Original article here. .