Report Exposes the Hidden Costs of Parking in Hawai‘i

By Kathleen Rooney, Director of Transportation Policy and Programs, Ulupono Initiative

It’s one thing to say we need parking. It’s entirely another thing to say we need it to the tune of more than a third of our rent — especially without any choice in the matter. 

“The Costs of Parking in Hawai‘i” provides the costs of developing, operating, and maintaining common types of parking facilities in the state of Hawai‘i. The report is the result of rigorous analysis undertaken for Ulupono Initiative by PBR HAWAII with assistance from the Hawai‘i-based construction cost consultant Rider Levett Bucknall. It includes representative costs for each county’s direct construction costs and land costs; considers representative carrying costs for different housing products and different income groups; and estimates conservative cost impacts on commercial carrying costs.

The report also focuses on several types of common parking facilities in five Hawai‘i geographies: urban Honolulu, other parts of O‘ahu, and on the islands of Maui, Kaua‘i, and Hawai‘i. In all cases, properties selected for analysis were derived from those areas in each geography most likely to have new development of the project types described.

The analysis found there are real differences in these costs. For example, the low end cost could be $4,200 per stall for on-grade parking (such as surface parking) at a residential site in Hawai‘i County, but can be as high as $60,400 per stall in a commercial parking garage on Kaua‘i. Many developers and residents do not have a choice in whether to pay for these facilities, contributing to the high cost of development in the state.

Further, six hypothetical but realistic profiles were selected for evaluation, representing five possible households and one commercial store located outside of Honolulu’s urban core, such as in Kapolei. Highlights of the report include the following:

• A single person renting a small studio unit in an urban Honolulu high-rise building with podium parking could be spending up to $410 per month to support a single parking space. If they earned only 50 percent of the area median income (AMI), this could represent up to 37 percent of their rent (based on a maximum allowable rent of $1,102). A comparable scenario in a transit-oriented development (TOD) area still would require $205 per month. This is true even if they didn’t own a car and use the space.
• A family of three looking to buy a two-bedroom, 1,000-square-foot unit in a high-rise development in urban Honolulu (podium parking) could be paying $84,000 for the required two parking spaces currently required by land use ordinances (Kaka‘ako rules, if applicable, would have no minimum). If the unit cost $425,000, the median sales price for a condominium on O‘ahu in 2019, parking would represent 20 percent of the purchase price. Carrying costs for the two spaces, including their operating costs, could represent about $820 per month.
  
• A retail store on O‘ahu outside of the urban core could be expected to allocate 1-2 percent of its gross sales to support parking facilities. This means that for every $100 per week spent by a family on groceries (equaling $5,200 per year) could be paying around $100 (or one week’s worth of groceries) in parking costs.
  

In looking at these numbers, paying out more than a third of one’s rent, an extra $800 per month in mortgage costs, or an extra $45,000 to the cost of a home, may no longer make sense on an island where approximately 43 percent of households own one car or less, according to the U.S. Census's 2018 American Community Survey. And that’s on top of the overall high cost of living.

From a public policy perspective, the University of Hawai‘i Economic Research Organization (UHERO) recently published a blog on potential rental subsidies required for a family of three during the current economic times (Estimating the Need for Rental Assistance in Hawaii, June 17, 2020). This household would require a $600 per month subsidy, of which almost half ($270) may be going toward required parking, not housing, calling into question what our public monies should cover.

Recently passed by the Honolulu City Council, Bill 2 (2020), while not a perfect measure, updates how Honolulu governs off-street parking to better serve the City’s climate and environmental goals, enables progress on housing affordability, and provides access to upward mobility for the next generation. For example, aspects of the bill, such as eliminating parking minimum requirements, allow parking to remain accessible for those who genuinely need it, while not requiring it of those who don’t. 

Both rightsizing and better managing parking present opportunities to more dynamically utilize urban land for housing, retail, and community needs — such as increasing demand for more people-oriented design and active transportation and living — instead of merely for vehicles or vehicle storage.

View the full report here.