On Condos, Parking, and Social Engineering

This shouldn't come as a surprise, I suppose. The regulators in these towns don't like you and your profligate, fossil-fuel-burning ways. Never did. It's probably a BMW anyway, so even more reason to make you park it on the street in the name of "sustainable development".

One bit of the regulation which, while still silly regulation, happens to correspond with good marketing: unbundling the deed of the condo from that of the parking space.

Under San Francisco’s new parking maximums, downtown developers are also required to “unbundle” the price of parking from the price of the condo. “Buyers aren’t obligated to buy a parking space, and developers don’t have the incentive to build spaces they can’t sell,” Mr. Switzky said.

Build as many spaces as you can sell, sell as many as you can build. Much more efficient allocation of capital.

The fact is that places like New York and Chicago it is relatively easy to be carless. In San Francisco, this is not the case. Outside of the busiest neighborhoods, you can't get a taxi. Lots of folks in the Bay Area take public transportation for their commute. Coming in on BART from the East Bay is indeed a wise move. The reverse commute is an agonizing other story.

Frankly, more power to you if you can pull it off. In Chicago, I could go weeks without moving my car. In San Francisco I couldn't even go to dinner in the Haight without driving.

My recommendation to you if you're considering one of these condos (even if you don't own a car): Buy a space. Two if you can leverage it. A spare, deeded parking space over the past twenty years may have been the single most profitable real estate investment in many US big cities, with cap rates exceeding 10%
commonly (high demand, no maintenance!)

This will continue to be the case, even if the housing bubble collapses. People will always need a place to put their car. The city in their idealism isn't going to change the fact that you want to zip up to Tahoe for the weekend. Or Napa. Or Marin for a morning mountain bike ride. Or to Ikea. By limiting parking-space growth, these towns are locking in your investment.

Maybe I'll put a REIT together to invest in the unbundled parking spaces and lease them back to the idealistic cyclists when they get a job in Foster City.