Even as cities and states are reducing or eliminating parking requirements, lenders often require parking to release loans to developers.
Ned Oliver, in an article in Axios, cautions that, although the city of Richmond, Virginia is encouraging more density and walkability by reducing parking requirements, developers face another challenge to reducing parking: banks.
Per city rules, “Developers are no longer required to offer any dedicated parking if their building contains fewer than 17 units. For larger developments, they only have to provide one space for every two units.” But according to Oliver, “In exchange for agreeing to finance an apartment project, banks almost always require developers to build a minimum number of parking spaces — often well above the requirements set by the city, developers say.”
The problem affects affordable housing developments more than market rate ones where more residents own cars, but Tom Papa of Fountain Head Properties expressed concern that “parking minimums that make sense today will prove to be a financial albatross for developments 10 years down the road as Richmond changes.”
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