Why Is Honolulu Parking so Expensive?
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And why does there never seem to be enough of it?
By Matt Kain
PHOTO: MICHAEL KEANY
Given the general price of paradise we pay for everything else, this shouldn’t surprise you: According to a recent survey by Colliers International, downtown Honolulu ranks as the single most expensive city in the nation for daily parking. That’s right; Honolulu’s daily parking rates are more expensive than Midtown Manhattan. With an average price of $42 per day, we are literally the worst.
The price of parking is woven throughout our economy and affects a lot more than how late you’ll be when you’re circling blocks looking for a free spot. It influences businesses’ bottom lines, real estate prices and even traffic patterns. The art of car stowing is both an economic anomaly and a planning paradox.
“Parking is ultimately a real estate business,” says Jon Tavares, general manager at Standard Parking, which manages more than 50 lots on Oahu. “A lot of the factors that drive retail or office rents up and down are also at work with parking,” he says.
Those factors include Hawaii’s economy overall, which has seen growth in the last year, just as parking rates have. Honolulu’s current daily average is up 10.5 percent over 2011, according to the Colliers survey.
It’s hard to put an exact number on Hawaii’s parking industry, but Tavares notes that it’s easily over $100 million a year, and could even be double that.
Whether they own a multilevel parking structure or an at-grade lot, land owners charge for parking—and often enlist the services of parking management companies—to dissuade parking poachers from hogging spaces all day. “We all like to be able to pull up to a stall and have a convenient spot to go to the business we want to go to,” Tavares adds. “A lot of times, that takes parking management to make sure those stalls are available for those customers.”
This is the same reason the city’s metered parking is limited to either one- or two-hour increments. “Some of it is to drive turnover,” says Department of Transportation Services (DTS) director Wayne Yoshioka. “Businesses want to see the space turn over so the next customer can come in, use that space and go to their store.”
The necessity for turnaround is simple: Parking is expensive to provide. Each individual stall in a structured parking lot is estimated to cost anywhere from $20,000 to $50,000 to build, and that doesn’t include the cost of the land itself. Needless to say, it takes a lot of commerce for parking spaces to pay off.
Paul Kay, development director for Kamehameha Schools, predicts that, in the budding Kakaako area, “For a two-bedroom apartment with two stalls, parking will add $40,000 to $80,000 to the cost of that apartment.”
At Kamehameha’s proposed specialty retail center in Kakaako known as Salt, Kay says parking will account for 28 percent of the total development costs. That being said, if you weren’t paying for parking hourly, you’d be paying in higher prices in the stores. One way or another, someone is paying for that space.
How do parking expenses rack up so quickly? Underground parking is prohibitively expensive because of Hawaii’s shallow water tables, so developers usually build vertically. And because new buildings tend to bump up against City and County height limitations to make the most of each property’s acreage, each story of structured parking takes away from a condo’s rentable space. The more parking you build, the more expensive the apartments above.
There are other costs, too. People driving around looking for parking spots add to street traffic. Their cars also emit greenhouse gases and increase fuel demands in the process. Societal costs like these are less measurable and apparent, but still exist.
City Land Use Ordinance requirements determine the minimum parking a developer must provide, but not the actual amount. Jeff Dinsmore, director of development at the MacNaughton Group, which specializes in real estate development, retail and brokerage services, says developers usually build more parking than they’re required to, since the minimum rarely meets people’s expectations. Expensive condos don’t sell if buyers have to worry about finding street parking every day. Retail spaces won’t flourish either.
“Look at it this way,” Dinsmore says, “If you don’t want your project to be successful, don’t build enough parking.”