STANFORD GSB |

Hack-A-House SubmissionStanford GSB Teamjrlouie@stanford.edu, suchit.rout@stanford.edu, rkeene@stanford.edu

Zone Parking Lots for Housing in Denver

1

STANFORD GSB | 2

Denver has a parking problem

Image source: Streetsblog

Parking accounts for nearly a quarter of all of Denver’s paved areas…

… Even as city investments in transit, micro-mobility solutions,and walkability have decreased resident reliance on car trips

Facing rising housing costs and shortages along with a post-Covid commercial market, Denver has an opportunity to innovate

STANFORD GSB | 3

We anticipate that urban cores will have fewer daily car commuters after Covid

Pre-COVID● Significant city investment in

multimodal transport, micromobility

● Multiple urban cores that serve neighborhood needs

● Housing production innovation (e.g., pre-fab, modular construction)

A convergence of macrotrends + COVID

Post-COVID● Increased tele-work, lower car traffic

downtown

● Desire for “own space” and accessibility to jobs, especially for frontline workers and their families

As tele-work increases and fewer daily commuters come to downtown Denver, formerly profitable parking spaces will become prime opportunities for housing

STANFORD GSB | 4

Re-zone surface parking lots for multifamily housing, without requiring parking spaces

The City of Denver can proactively address its urgent need for accessible housing against the backdrop of (1) its incredible existing supply of parking, and (2) the macro trends changing how, where, and why people use parking before and after COVID.

Our proposal

STANFORD GSB | 5

Enable city planners to re-examine the role of parking against the potential for housing● In tandem with existing and planned investments in transit (e.g., Denver rail, light rail, bus) and

micro-mobility (e.g., bike share) infrastructure, examine role and future of parking lots in Denver

● Re-zone surface parking lots for affordable-only multifamily housing construction; changing zoning enables - but does not force - value creation for landowners, future tenants, and streetscape in scenarios where pro formas pencil out (e.g., rent received by tenants > rent received from cars)

● The advantage of beginning with surface parking lots and low-cost, quick construction housing like Accessory Dwelling Units is time; they are quick to build and can serve as pilot in transition of underutilized commercial spaces

● This enables a “carrot” (e.g., creating value through rezoning) rather than “stick” approach (e.g., tax on vacant parcels)

How this creates accessible housing (I)

STANFORD GSB | 6

We envision a series of affordable-only units developed on former parking lotsBase case: the average rent of a 270 sq ft parking space is $190/month in Denver (pre-COVID estimate). Accessible rent for a family making the AMI in Denver is $2,500/month(1)

At these costs, 1 apartment provides the NOI of ~13 parking spaces per month ($2,500 monthly rent / $190 avg monthly parking rent) which equals to 3,510 sq ft. Current affordable housing units in Denver average at 1,000 sq ft for 2 Beds 1.75 Bath(2). A family of 3-4 can comfortably fit in an apartment of 1,000 sq ft - showing that developers will be easily able to recoup their investment.

By partnering with ADU builders who follow design-for-affordability principles, building costs of such ADUs can be brought down to anywhere between $50,000-$75,000 for a 1,000-1,200 sq ft install. An ecosystem/alliances model between ADU builders, surface parking lot owners, and local housing board could further explore a wider range of building materials such as containers, 3D-printed, pre-fabricated, etc.

Similar projects (converting parking lots to housing) have penciled in other cities, notably in Boston and Brooklyn(3)

How this creates accessible housing (II)

STANFORD GSB | 7

The flywheel of policy change enables more housing on underutilized commercial land

How this creates accessible housing (III)

PILOT CASE

Beginning with surface parking lots, a highly visible pilot case

which some already believe to be overbuilt, will help Denver

propose other future commercial reclassifications for housing

POLICY CHANGE

Zoning surface parking lots for affordable housing development unlocks value capture for the private market and/or institutional investors to develop new housing

SCALABLE HOUSING DEVELOPMENT

When market forces align (NPV of housing > NPV of parking), developers will take advantage of the new development

opportunity

ACCESSIBLE HOUSING GROWTH

STANFORD GSB | 8

A greater number of Denver residents have accessible housing options in prime locations near transit and jobs

Imagine a world where...

Change requires policy and regulatory action but does not require explicit taxpayer funding; rather, a proactive approach to enable housing creation as macro-trends converge

Denver enjoys increased placemaking and lively streetscapes; change brings formerly dead spaces like parking lots to life

This change sets the stage for continued transition of commercial spaces to residential use over time as Denver grows and adapts

1 2 3 4

STANFORD GSB | 9

thank you