There is another Chicago area community, the suburb of Skokie, which is among a growing number of municipalities easing parking requirements for expanding or renovating residential properties. As one who relies on and preaches about the importance of researching every aspect of a property, opportunity, and plan, I find the trend quite interesting. One example, as cited in the below linked article, mentions how the City of Chicago has removed the need to include parking for a project within close proximity of a bus corridor or train stop. The reasoning is that more people might be able to live near public transportation.
While I understand the intent and the need they want to serve, it raises different issues. Although some people prefer to live where they can more easily get to and from work and be close to shopping, part of the ‘big city’ charm is being able to go to places by car. Making it even more difficult to find parking could be a turn-off for some potential tenants. Personally, I grew up in apartment buildings which were surrounded by other apartment buildings. Street parking was a challenge, as my parents and I often had to park more up to two blocks away from home when we were out for the evening or a weekend event. There are numerous ‘big city’ situations, such as in Chicago, NYC, and San Francisco, where parking spaces are an additional monthly expense or a separate purchase, as opposed to free parking on the street or provided parking lot or area.
It is crucial to be aware that not requiring parking spaces is much different from not allowing them. From my viewpoint, it is also crucial to consider that when researching and planning an addition or renovation within close proximity of public transportation. There are going to be current and potential tenants that want it both ways, as in the proximity to transportation and a convenient parking space. When neighboring buildings do not have parking, especially when adding or renovating without parking, it means that battle for parking on the street(s) will become even more intense. For some locations, tenants could be willing to pay (for example) an additional $100 per space to be assured of always having a place to park.
Here is where the research comes in. Suppose you have room for eight parking spaces. That space could bring in $800 per month (or $1,000 per month at $125 per space). Meanwhile, suppose you could rent a unit on the same space for $1,200 per month. It might not be an easy or obvious decision. Consider the thousands of dollars it would cost to build or renovate the same space, along with the cost for plumbing, electricity, and maintenance. There is also the risk of vacant months between rentals. If added profit centers (laundry, cable/internet, etc.) are in place, you might be increasing the value of your current units by 20%. Consequently, the less costly parking spaces may require significantly less effort for similar revenue.
On the other hand, it may not. If your rental potential is significantly higher, you are better off to add or renovate and go for the rental income if your current tenants are OK with the current parking arrangement. There is being aware of whether or not neighboring properties are adding or not. If they add, parking may be an even bigger concern and could cause some of your tenants to consider moving out. The point is that being aware of these factors should be an important part of your research and consideration of how to most effectively handle the situation.
Our team is ready to help with the research and decision making, which could make you ‘first in’ on the best possible decision for you and your team!
(Here is the story: https://www.illinoispolicy.org/skokie-zoning-reform-would-make-home-renovations-easier/ )
