Zoning, Total Car Ratios, and Housing A study of downtown Indianapolis, Indiana

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1 Zoning, Total Car Ratios, and Housing A study of downtown Indianapolis, Indiana Introduction The purpose of this report is to analyze the feasibility and political likelihood of implementing minor residential zoning changes in Indianapolis, Indiana. More specifically, it would benefit the downtown area of Indianapolis if the Total Car Ratio were reduced or eliminated for apartment buildings and if the city instituted a policy of encouraging the decoupling of parking from housing. This would create an incentive for builders to create lower-cost small-unit housing for young professionals and the elderly, two populations which are being underserved in this part of the city. Housing costs for young professionals and the elderly A 2011 survey by John J. Heldrich Center for Workforce Development at Rutgers University found that, on average, of the sampled young adults (ages 22-29), a quarter lived with their parents and a third received financial help from their parents with housing. The median salary earned by new graduates at their first job was $30,000. Using the common financial organization advice that housing should comprise no more than one-third of one s budget, that leaves new graduates with about $750 for rent. The Indianapolis Housing Agency, the local organization tasked by the Department of Housing and Urban Development to implement the Housing Choice Vouchers, sets the fair market value of a single room occupancy unit or studio apartment at $597 and the fair market value of a 1-bedroom apartment at $690. (Indianapolis Housing Agency). IHA considers apartments in all areas of Indianapolis, but there appears to be a price premium for a downtown location (presumably because it is a desirable location). In a non-census survey of downtown apartment complexes (17 properties), studio apartments in downtown Indianapolis routinely rent for $1,000 or more. One-bedroom apartments cost more, up to about $1,500. 1

2 This problem of housing is one that I observed personally I spoke to about 20 people, mostly people in their mid-twenties to late twenties, about what problems they noticed in Indianapolis, and affordable housing close to work was a consistent theme. Several expressed the desire to live downtown and have a car-free or at least a less car-dependent lifestyle, but that was quickly followed with something along the lines of but of course that s impossible in Indianapolis. An article by Mark Hinshaw and Brianna Holan in the November 2011 issue of Planning magazine outlines a new possibility for housing this population. The authors propose using the zoning designation for rooming houses, which typically require fewer parking spaces than apartment buildings. The units described, called the Triple Bottom Flats, are studio apartments with sleeping lofts and kitchenettes. This kind of housing would provide a sort of launch pad for these young workers. There are already many company headquarters in downtown Indianapolis, but many of the young workers there live in the suburbs with their parents or in the near-urban fringe in overcrowded single-family homes with several roommates. And as Hinshaw and Holan speculate, Members of older generations often dismiss this behavior as temporary we think the trends are pointing in the opposite direction. The suburbs may not be exactly dead. But they have most certainly lost their allure for a lot of young people. The other demographic that might be attracted to this type of housing would be the elderly. There is no doubt that America has an aging population and that aging population will have more specific housing needs than it might at this moment in time. (West). The general demographic trend has been for people to stay healthy and active at older ages than in previous generations, and there has also been a shift toward the desire to age in place. (West.) Iowa City recently passed a zoning density bonus to encourage one-bedroom housing for the elderly ideally closer to downtown than the city s current far-flung facilities. (West). While the housing hoped for in Iowa City would likely receive federal funds to aid in construction, the similarities between the two demographics (less need 2

3 for a lot of room, desire or need to live car-free) means that the housing built in this zone in Indianapolis could accommodate a wider swath of the population than just young professionals. If the policy were implemented, this kind of housing could be built much more affordably and at a greater density because it could be built with much less parking. If it were built more affordably, property managers could charge a lower rent to get the same return on investment. There is no guarantee, of course, that they actually would charge a lower rent. The other possibility is that there would be more demand for the small, cheap apartments than originally anticipated, and competition for the units would drive the price up. It s likely, though, that the housing being small and decoupled from parking would self-select a population that desired these particular traits. Increasing interest in a car-free (or less car-dependent) life A story in the New York Times from October 2009, Is Happiness Still That New Car Smell? reported on the growing trend of living carfree, either by choice or necessity. (Maynard). For some, environmentalism is the driving force they want a smaller carbon footprint but for others, owning, maintaining, and parking a car is not worth the cost. For some people in larger cities, a carshare program like Zipcar is a supplemental means of transport, and the program is growing. (Richard). Indianapolis currently has a single Zipcar, but it is not located downtown. (zipcar.com). Having a larger car-free population downtown might be enough to bring in a Zipcar (or other carshare company) docking station. Bike commuting is another major player an article in The Atlantic magazine from September 2011 Is Bicycle Commuting Really Catching On? cites American Community Survey statistics from that shows a 150% increase in bicycle commuting in Indianapolis. (Byrnes). For comparison, Portland, OR showed a 225% increase. (Byrnes).The numbers in Indianapolis are still small, but growth is likely to continue as smaller link-up bike trail construction makes commuting easier, safer, and more convenient. 3

4 According to Federal Highway Administration statistics cited in another article, Fewer Youths Jump Behind the Wheel at 16, young people are the demographic most likely to shun or delay purchasing a car. (Chapman). That demographic, long used to nonmotorized means of transportation, will be coming up into the young professionals demographic within the next 10 years. The cultural shift has happened, which would ensure this type of housing and less-cardependent lifestyle will continue to be relevant. The problem with parking minimums Donald Shoup, in his article The Trouble with Minimum Parking Requirements, outlines the problem with setting parking minimums. Most cities base their minimums off Institute of Transportation Engineers figures. A planner at the Indianapolis-Marion County Planning Office said the TCRs had been in place for at least 20 years, and he was not sure how the numbers were reached. He did say they were probably based off the ITE figures, which were most likely provided by the local Metropolitan Planning Organization. The problem with the ITE figures is outlined by Shoup as such: (Shoup, 1999) 1. Transportation engineers survey parking occupancy at sites that offer ample free parking and lack public transit. The ITE summarizes the peak parking occupancies observed at each land use and reports the parking generation rate. 2. Urban planners use the parking generation rates to set minimum parking requirements for all land uses. Because the required parking supply is so large, the market price of parking is zero, and most new developments offer free parking. 3. Transportation engineers survey vehicle trips to and from sites that offer free parking. The ITE summarizes the data on vehicle trips observed at each land use and reports the trip generation rate. 4. Transportation planners design the roads and highways to satisfy the trip generation rates. Therefore, the transportation system provides enough capacity to satisfy the expected demand for vehicle trips to and from land uses that provide free parking. 5. Urban planners limit land use density so that new development will not generate more vehicle trips than nearby roads and highways can carry. 4

5 The unstated assumption of free parking is what generates the numbers used to support these minimums. Implementing parking minimums and creating a system whereby non-drivers subsidize parking for drivers is also a matter of inequity. On average, households with incomes below $10,000 a year own only one car, while households with incomes above $40,000 a year own 2.3 cars. Eight percent of non-hispanic White households, 19 percent of Hispanic households, and 30 percent of African-American households do not own a car. In total, 10.6 million American households do not own a car, yet even these households indirectly pay the costs imposed by minimum parking requirements. Because cars are not distributed equally in the population, charging motorists only for the parking they use is fairer than requiring everyone to pay for parking whether they use it or not. (Shoup, 1999). How the proposed policy would work The city zoning code currently mandates a Total Car Ratio and defines it as such: Total car ratio (TCR): The total number of parking spaces divided by the number of dwelling units. (Zoning Code of Indianapolis). The zone D10 represents the high density classification of the comprehensive general land use plan intended for central and inner-city use... The D-10 district requires all public and community facilities In many cases, the D-10 district will represent a renewal of the land rather than the initial use. The D-10 district has typical densities according to the number of stories: dwelling units/gross acre for 1-3 story structure(s); dwelling units/gross acre for 4-5 story structure(s); dwelling units/gross acre for 6-11 story structure(s); dwelling units/gross acre for story structure(s); dwelling units/gross acre for structure(s) above 24 stories. (Zoning Code of Indianapolis). This is the zone that would accommodate high-density, onebedroom or studio apartments. 5

6 The TCR for these structures varies from 1.00 to For comparison, assisted living facilities have a TCR of The policy I am recommending is lowering the minimum to 0.50 for all buildings in this zone, and creating a policy that encourages management companies to charge their renters separately for housing rent and for automobile stall rent. At least one luxury apartment building, The Maxwell, does this. An official policy of encouraging this would open up the market for private parking. (If the policy created a functioning market for private parking, the decoupling could be written into an ordinance later.) The market, then, would determine how much these stalls were worth if non-residents that worked in nearby buildings wanted to rent the stalls, they could. What would be eliminated, though, is the built-in subsidy of non-drivers for drivers, and the additional cost of building so much parking. The TCR probably cannot be eliminated, and it probably would not be the case that a developer would build a multi-story apartment complex with absolutely no parking. Indianapolis is a very spread-out city, and while there are some shopping amenities downtown (Circle Center Mall, one large grocery store and several smaller food markets), and an decent and wide-spread bus system, many people might still want a car. But they wouldn t necessarily have to have a car downtown Indianapolis is very walkable, there are good bike lanes and sharrows, and the Monon and Cultural Trails provide dedicated nonmotorized access to much of the city. The current system of minimum TCRs possibly underestimates the desire that some people want to be car-free and forces non-drivers to subsidize drivers. This also creates an incentive for people to walk or bike, which has both environmental and health benefits. Indianapolis frequently calls for Knozone Action Days in the summer and fall when local air pollutants exceed federal air quality standards. The city encourages citizens to, leave early and avoid morning rush-hour, use public transportation like IndyGo whenever possible, avoid vehicle idling, and bike to work, the store, or the bus stop. (Knozone Home). If more people lived 6

7 downtown and could easily walk a few blocks to work and recreation, perhaps air pollution would be less of a problem. How decoupling parking from housing could make housing more affordable People who live in the apartment complexes wouldn t be subsidizing parking spots they don t use. As Shoup neatly put it, Minimum parking requirements bundle the cost of parking spaces into the cost of development, and thereby increase the cost of all the goods and services sold at the sites that offer free parking. These requirements externalize the cost of parking, so that you cannot reduce what you pay for parking by consuming less of it. Minimum parking requirements bypass the price system in the markets for both transportation and land. (Shoup, 1999). The proposed policy would challenge the assumption that everyone actually has a car, or wants to have a car. Even if developers are noticing that people are not parking in the stalls in their other developments, when they build complexes in this zone, they must build parking anyway because of the minimum TCR. If this standard were reduced, they could provide fewer parking stalls, which would lower overall building costs. The Triple Bottom Lofts designed to accompany the article Rooming House Redux have a TCR of 0.5, for example. (Hinshaw and Holan). More importantly, it would broaden the market for parking downtown. The curb meters were recently privatized, doubling the cost per hour. (Schouten). But private parking vendors vary greatly in price. If a downtown resident wanted to live a less car-dependent lifestyle but was not ready or able to go car-free, he or she could choose to store the car in a lot or garage on the fringe of town for a much lower price. Lowering or eliminating the TCR would also encourage novel reuse of existing buildings. First, parking requirements prevent infill redevelopment on small lots where fitting both a new building and the required parking is difficult and expensive. Second, parking requirements prevent new uses for many older buildings that lack the parking spaces required for the new uses. (Shoup, 7

8 2011). Indianapolis has a wealth of architecturally significant buildings downtown, many of which could be repurposed as one-bedroom housing for young professionals. Is implementation politically feasible? There are 29 members on the Indianapolis Marion County City-County Council. The downtown area is divided amongst 5 of those council members. Because this is removing or altering a regulation rather than imposing an additional regulation, it seems unlikely there would be substantial opposition. After all, developers could still build more parking if they so desired. If there were concerns, they would likely be related to a fear of insufficient parking hurting businesses. This fear, though, would be mitigated by the fact that there would be a larger residential population downtown, and thus, more patrons at downtown businesses. Yes, I believe it to be politically feasible. Conclusion Reducing or eliminating the Total Car Ratio minimum in the Indianapolis-Marion County Zoning Code would create a market for private parking spaces. Decoupling parking and housing in downtown Indianapolis could potentially help make small-unit apartments more affordable, which could encourage the development of small-unit housing for young professionals and the elderly. Decoupling parking and housing would also end the invisible subsidy that non-drivers provide to drivers by paying for parking the non-drivers do not use. The creation of a market for private parking spaces would encourage commuting by walking or biking, which would have a positive environmental impact on the city and could have positive health benefits for commuters. This idea is politically feasible. 8

9 References Byrnes, Mark. Is Bicycle Commuting Really Catching On? If So, Where? The Atlantic. September 21, 2011, accessed via the web ( on November 20, Chapman, Mary M. Fewer Youths Jump Behind the Wheel at 16. New York Times. February 25, 2008, accessed via the web ( on November 20, Godofsky, J., Zukin, J., Van Horn, C. Unfulfilled Expectations: Recent College Graduates Struggle in a Troubled Economy. Monograph printed by John J. Heldrich Center for Workforce Development at the Edward J. Bloustein School of Planning and Public Policy (Rutgers), Hinshaw, M. and Holan, B. Rooming House Redux. Planning. November 2011, pgs Indianapolis Housing Agency statistics, accessed via the web at ( November 22, Knozone Home, accessed via the web at ( on November 20, Maynard, Micheline. Is Happiness Still That New Car Smell? New York Times. October 21, 2009, accessed via the web ( =1&_r=1&ref=autospecial2) on November 11, Richard, Michael Graham. Zipcar IPO Raises $174.3 Million to Fuel Expansion April 15, 2011, accessed via the web at ( million-to-fuel-expansion.html) on November 20, Schouten, Cory. City vendor may get $1.2B from parking-privatization deal. Indiana Business Journal. August 28, 2010, accessed via the web at ( on November 30, Shoup, Donald. Yes, Parking Reform is Possible. Planning. October 2011, pgs Shoup, Donald. The Trouble With Minimum Parking Requirements. Transportation Research Part A, Vol. 33 (1999), pp West, Kehla. Iowa City Council Passes Elder Housing Density Bonus. Unpublished. Zipcar City Locator, accessed via the web at on November 30, Zoning Code of Indianapolis, primary section accessed via the web at ( DWDIRE.html) on November 11,