How parking is silently fuelling South Africa’s housing crisis

After a pandemic-induced pause, the City of Cape Town reintroduced paid street parking. For some, this felt like a human rights violation. I recall a woman in a heated argument with a parking marshal over a R10 parking fee.

So accustomed to free parking, she felt entitled. Like a teenager whose allowance has been cut and been kicked out of the house. But, her entitlement is no surprise. Free parking is commonplace in South Africa, so we expect it.

But calling it free is a misnomer. While often free to users, parking is not free. In fact, it is so expensive that, at first glance, free parking seems odd in our free market economy.

Free parking is not a glitch in the system, but rather a result of one of the most ill-conceived urban planning policies in modern South Africa. A policy that over decades has transformed our cities from vibrant and walkable into congested and unpleasant – and simultaneously constricting housing supply and affordability.

This is an account of how off-street parking requirements (or just “parking requirements”) can ruin our cities.

What are parking requirements?

Parking requirements regulate how much parking every land use in a city is required to provide, with land use categories ranging from the basics such as apartments and restaurants, to more niche such as morgues and snake parks.

For example, in so-called standard areas, the City of Cape Town requires 1.5 parking bays per apartment. For restaurants, it requires six bays per 100 square metres of lease area. Typically, these requirements are enforced when new developments pop up or during rezoning and consent use processes, such as when a home is converted into a commercial space.

Today, all South African metros have parking requirements in place, many since at least the 1970s. The look and feel of parking requirements varies between municipalities. Some have more land use categories, others have different requirements for the same categories, and some offer reductions in specific areas.

There can also be nuances in implementation; for example, some municipalities may be more lenient with deviations or change requirements if a building has multiple land uses. Dense townships may also see lenient or no enforcement of parking requirements.

Market distortion

To fully understand the problem with parking requirements, let’s start with the fundamentals. A city with a parking shortage can either decrease parking demand or increase parking supply. Decreasing demand is as simple as raising the price of parking, but cities are often oblivious to this simple truth.

Instead, cities opt for increasing the supply (with parking requirements). The logic is not entirely incorrect; a strict implementation of parking requirements will increase the parking supply. But in doing so, a city disrupts the market for parking, knocking it out of equilibrium.

Artificially increasing the parking supply instead of allowing market incentives to drive the supply triggers a drop in the price. Naturally, with this decline, parking demand increases and, by extension, driving demand also increases.

Over time, parking requirements can increase traffic to the point where a city may need to expand roads to ease congestion. However, this has the opposite effect, as new roads, being free, further encourage driving. Often, this marks the beginning of a never-ending expansion of car infrastructure, driving a demand feedback loop – the induced demand effect.

After decades of parking requirements, parking is often so abundant that its market value is zero. But this is only the start of the unintended consequences.

Destruction of the urban form

Cars need a lot of space; three cars take up as much space as a 100-passenger bus. At the same time, car occupancy is on average only 1.5 people per car. Additionally, cars require parking at home, at work and wherever else they are used.

This spatial inefficiency means that a city with parking requirements must change compared with a city without them. In densely populated areas, multistorey parking garages can double the size of some buildings. Elsewhere, the city sprawls outward as developers seek cheap and available land to build surface parking lots instead of expensive parking garages.

The availability of low-cost parking also means that land uses evolve. Businesses without parking become uncompetitive as parking becomes central to the transport system and the movement of people. Shopping malls replace the small corner shops in our neighbourhoods and commerce shifts away from city streets.

Their large parking lots place them in a better position to accommodate a clientele arriving by car. The vast amount of land they require means they too form part of the outward sprawl.

Over time, the city decentralises and stretches. The urban form changes and with this, urban life also changes. Buying milk is now a 10-minute drive, as is going to school, and walking is punishing, with busy roads dangerous to cross, greater distances and an unpleasant urban environment.

Public transport is also less available, since the stretched, lower-density city impacts its viability. Driving is now more of a requirement than a choice.

Whale Coast Mall in Hermanus is 60% parking and was built in an unnatural place outside the natural commercial centres of the neighbouring suburbs. The traffic this generates is transforming tranquil small-town streets into noisy roads.

A hidden cost to society

Most South Africans cannot afford a car, and in the townships where many live there is often lax enforcement of parking regulations. However, they do pay a price for parking.

Parking is much like a hidden tax. Malls, as for-profit enterprises, pass on the cost of parking to their tenants through higher rents. Tenants then pass these costs down to consumers in the form of higher prices for everything. Invariably, these higher prices do not discriminate between those with and without a car.

Municipalities, which need to build larger roads to serve these parking lots, pass the costs down to ratepayers. The more stretched-out nature of the city also means higher costs for almost all municipal infrastructure, from water pipes and sewers, to electrical distribution grids.

Not all costs will be reflected on your rates bill. Some will be funded by cuts in other areas. Sometimes, nice-to-haves such as parks and public swimming pools disappear. Townships may see electricity, water and sewer expansions deferred for years.

State-subsidised public transport suffers, particularly, as car infrastructure and its use siphons not only transport budgets but also reduces ridership.

This often triggers a feedback loop, where the decline in ridership and public transport budgets causes transport services to cut routes and schedules, which further accelerates the decline in ridership. This is one reason subsidised public transport in South Africa is so rare.

Competing for shelter

Arguably, the most consequential unintended consequence of parking requirements is its impact on the cost and market price of housing.

To fulfil Cape Town’s 1.5 bays-per-apartment requirement, we need 19m2 of parking space. Then we need to double that to 38m2 to allow for access and manoeuvring. In Newlands, Cape Town, this would increase the land cost of an apartment by R500,000.

Of course, an above-ground parking structure could reduce land cost per bay. However, this would increase construction costs by about R180,000 per apartment, based on cost estimates from the Africa Cost Guide for Property and Construction.

Either way, the cost of building apartments goes up. In theory, if these additional costs were passed directly onto buyers, fewer people would be able to afford housing. In San Francisco, a study comparing housing costs with and without parking found that 20% fewer people qualified for a mortgage when parking was included in the calculation.

For example, consider a 30m² apartment in a six-floor mid-rise. In Newlands this would cost R470,000 to build, including land and a 30% developer margin. Now, if we need to adhere to Cape Town’s parking requirements, the total cost increases to R710,000 for 1.5 parking bays.

At a 10% deposit and a 9.5% interest rate, the monthly repayment on mortgages for apartments without parking is R3,700, while R5,700 (54% higher) is required with parking. Using the affordability threshold applied by many banks that mortgage repayments should not exceed 30% of your gross income, parking requirements mean that the salary required to own an apartment with parking increases from R12,000 to R19,000 per month.

You could say that upmarket Newlands is a bad example. However, that is the point. It illustrates how parking requirements hinder the development of affordable housing in well-located, upmarket neighbourhoods.

For argument’s sake, let’s take the same example and look at Khayelitsha, where land is about six times cheaper than in the city. Here, we do indeed see how the affordability of apartments improves. The monthly mortgage payment for an apartment with parking is now only 20% more, at R3,700 compared with R3,100, for the same apartment with surface parking.

However, now the apartment homeowner needs to fork out R1,100+ every month for a taxi, R1,000 for a MyCiti bus or R300 for a train to get to work in the Cape Town CBD. Sadly, the train really won’t be an option for most South Africans due to our limited rail network. For a car, the cost would be R1,700 a month just for petrol. With maintenance, depreciation, insurance and the car repayment, the cost could easily come to R10,000 for an inexpensive car.

What these examples show is that there is always a trade-off between cost or location and parking requirements, and the cost of those requirements cannot be nullified. The irony is that for those most vulnerable to reductions in housing affordability, car ownership is often unattainable anyway. Furthermore, even if it is attainable, who can say that car ownership is what you want? Perhaps you prefer to forgo parking to save money for an extra bedroom.

In practice, the combined costs of housing construction and a standard developer margin create a loose lower limit on housing prices. The upper limit, however, is determined by market demand. Developers are happy to accept higher margins when buyers are willing to pay more. Here, too, parking requirements interfere with this balance.

The high cost of parking structures means that developers are reluctant to build beyond a certain height, beyond which surface parking is no longer sufficient. This means that parking requirements effectively limit the amount of housing that can be built in a given area, thereby throttling the overall housing supply.

After Oakland, California, implemented a requirement of one parking bay per apartment in 1961, housing density in new developments dropped by 30%. The sprawling Sitari estate on Cape Town’s periphery is a great example of this – apartments built on inexpensive land, surrounded by surface parking, with apartment blocks that don’t rise above four storeys likely to avoid the need for costly parking structures.

Of course, a developer could still build apartments like these in a city without parking requirements. However, market-based parking prices would make driving more cost-reflective, thereby changing the economic calculus of living on the outskirts and commuting into work by car. Additionally, a more abundant and competitive housing supply in well-located areas would reduce overall demand for housing on the periphery .

It is challenging to quantify the impact of supply restrictions on parking requirements on the market price of housing. One hypothesis is that parking requirements drive up housing prices to such an extent that developers are able to recoup losses incurred from lower housing density.

It is reasonable to assume that this effect would be even more pronounced in cities that are restricted by geography (such as Cape Town) or are slow to expand water, electricity and road infrastructure.

Regardless of the exact magnitude of the impact, any decrease in housing affordability resulting from parking regulation is undesirable. Housing affordability is already constrained by the low income of the average South African, and any increase is untenable.

Looking back, it is also essential to realise what trade-off this policy offers. In effect, we are saying “no parking, no home”. We are saying that housing cars is more important than housing our people. Our cities need to undertake a deep introspection on the morality of such a policy in a country where millions still live in informal or inadequate housing.

The solution

Many government reports have addressed the issue of parking for decades. The 1997 White Paper on Western Cape Transport Policy, for example, states that “rigorously enforced parking policy is one of the most effective measures in restraining the growth in the use of private vehicles”, and that “all public long-term parking must be charged”.

However, much like contemporary policy documents, the white paper fails to link parking requirements explicitly to the cost of parking. More importantly, it also fails to link parking requirements to the cost and supply of housing.

Ironically, for an issue so far-reaching, the remedy is remarkably simple: Abolish the policy of parking requirements. No exceptions, no reduced requirements for townships, affordable housing or public transport zones. Just unconditional removal of the policy. Let the free market decide how much parking it wants and how much it is willing to pay.

The results of this will be almost immediate. When Cape Town removed parking requirements for its CBD three years ago, it saw an almost immediate uptick in housing density, with even luxury developments opting to reduce or even entirely remove parking in favour of more housing units.

Today, developments in the Cape Town CBD almost always supply less parking than would have been required in the past. To avoid a parking shortage, the City charges R19 to park for an hour or R150 to park for a workday for on-street parking. Off-street parking can attract similar fees.

Unfortunately, in much of Cape Town, parking requirements still apply. Despite the positive impacts in its CBD, the City still fails to recognise that removing parking requirements could be beneficial for the entire city.

Cape Town is not alone and neither is it the worst offender. Johannesburg, eThekwini, Bloemfontein, Mangaung, Nelson Mandela Bay and many other municipalities all prioritise parking over people. Our cities overlook the fact that shelter is a human right, while parking is not. DM

Marko Kiessling is an engineer and activist working with Young Urbanists to advocate for better urban planning and design.