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What do carparks cost to build?

Car parking can be a thorny issue for high-density residential development. This post looks at the “cost” side of the equation: how much does it cost to provide carparks within a residential development?

I’d better start with a disclaimer: I’m an economist, not a quantity surveyor, and the figures I’m using here are just for discussion purposes on this blog. Costs can vary widely from project to project, and if you want a detailed cost estimate, you need to talk to a professional in that field.

The cost of a carpark varies massively depending on where it is, and whether it’s a flat piece of land, above ground in a multi-storey building, or in a basement.

There are plenty of trade-offs involved between these options: with parking above ground, for example, you might end up losing ground-floor space that you could otherwise use for retail or apartments with courtyards, and there might be urban design or public interface issues. You’re also going to be building higher than you would otherwise, which means that some of the apartment buyers might get a better view, but the construction becomes more complicated and you might run up against the height limits for the area.

And basements can just be really expensive.

Ground level car parks

The simplest situation is ground level (or “at grade”) car parks, on the flat with nothing above them. These are pretty cheap to create: lay some bitumen, put some kerbs around the edges and paint the lines on. The build cost might be $70 or $80 a square metre. The real cost, though, will be the land itself, and in Auckland this could be just about anything. It could be $500 a square metre or $1,500, depending on the area and the zoning.

Of course, if the land costs $1,500 a square metre, you probably don’t want to be using it for surface car parking – you want to be building on it instead. With a parking building, or a basement plus some other kind of building on top, you’re spreading the land cost out and it becomes less of an issue.

A carpark takes up about 15 square metres, but by the time you take circulation and access into account, you’ll only get one carpark for every 28 to 30 square metres of area in a parking building or basement.

Basement carparks/ above ground carparks

For a partly underground carpark – one where you’ve got to do a bit of digging, but not too much (you might already be on a sloping site, for example) – the construction cost will come in at $900 a square metre, if you’re lucky. For a full basement, you’ll be looking at $1,500 a square metre or more.

As for above-ground carparks in a multi-storey building, this can cost $700 a square metre or more.

GST and other costs

Then you add in professional fees, finance costs, local authority costs and contingencies. These costs might come to $150-$300 a square metre, depending on the type of parking.

Oh, and all of the costs above exclude GST, except for land costs where it tends to be factored in already. For your construction costs and all the other associated costs, you can add GST on at 15%. Overall, the cost to build a carpark in a basement, or in a multi-storey building, can be between $30,000 and $50,000 (or even higher) once everything’s accounted for and GST has been added.

Adding a developer into the equation, and what carparks mean for development

I’ve also excluded the developer’s profit margin in the above (very rough) costs. However, the car parks have most likely been built by a private company which does indeed want to make a profit, and wants to be compensated for the risk involved in undertaking a development. This could increase the final sale price even higher.

When the carparks are part of something like an apartment block or office building, though, it’s more likely that the developer will end up losing money on every carpark he sells.

The developer has to make this loss up elsewhere, by making a larger profit on the sale of the actual apartments. Essentially, those apartment sales have got to subsidise the carparks. They will have to be sold at a higher price than they otherwise would, but that’s not too worrying – these days there is an established apartment market with established prices and plenty of buying and selling going on, and it’s hard to charge inflated prices for a new development.

What I find more concerning is the idea that some developments simply won’t go ahead, because the money that the developer can make on the apartments isn’t enough to compensate him for the loss on the carparks and the risk he’s taking.

Increasingly, developers are selling carparks as optional extras, rather than bundling them into the price of an apartment. Merchant Quarter in New Lynn is a good example of this, and the trend is likely to continue. Carparks at Merchant Quarter are up for grabs for $35,000, including GST.

Of course, things like Minimum Parking Ratios can throw a spanner in the works – it’s harder for developers to sell carparks individually when they’re obligated to provide a certain number.

26 comments to What do carparks cost to build?

  • Stevenz

    “The developer has to make this loss up elsewhere, by making a larger profit on the sale of the actual apartments. Essentially, those apartment sales have got to subsidise the carparks. They will have to be sold at a higher price than they otherwise would…”

    Nothing unusual about that. Any costs of infrastructure borne by a developer are simply represented in the basis of the land. The apartment price isn’t higher than it otherwise would except for the absolutely identical property without parking, and as they are developed one way or the other, you can say which is the “proper” project.

    “What I find more concerning is the idea that some developments simply won’t go ahead, because the money that the developer can make on the apartments isn’t enough to compensate him for the loss on the carparks and the risk he’s taking.”

    In all my years working with developers I have never heard of a residential project not going ahead because of the cost of legally-required parking. In fact, adequate parking is often a requirement for financing so in effect parking not only does not lose money, it makes most projects – and their profits – possible.

    The basic question for this blog is that, as a matter of public policy, whether and when to require parking, how much and where.

    • Easy; nowhere, ever. Let the market decide.

    • John Polkinghorne

      Hi Steve, thanks for the points you make. I’ve been involved with one (non-residential) development where the high cost of providing parking has led to it being cancelled, and of course developments often don’t go ahead for one reason or another… but it generally comes down to the costs not matching the profit expectation, and parking often plays a part in that.
      As for residential, Auckland is at the fairly early stages of having more vibrant local centres and improved public transport, which will mean that more households will choose to reduce the number of cars they own. When you’re buying an apartment and you have the option to buy an extra car park for $50,000, you start to think pretty seriously about whether there are other ways you can get around instead.
      Bob Dey wrote a good article back in 2007 on an apartment development up the top of Symonds St, which had to build far more car parks than there was demand for, and then tried to lease them out to offices in the area. See http://www.propbd.co.nz/mcleod-group-wants-to-lease-unwanted-apartment-parking-spaces-to-office-tenants-councillors-say-pricing-may-make-them-unwanted/

  • This blog is highly relevant to the debate about provision of park-and-ride facilities near suburban train stations, and possibly bus routes. I have been using a general rule of thumb that it would cost about $40,000 on average for each additional park and ride space – or in other words a million dollars to provide about 25 spaces (assuming cheaper land in the burbs) and have to ask what else could we do with that money.

    While a case can be made for park and ride in peripheral suburbs with minimal or non-existent feeder bus services (Papakura, Albany, etc.) I do not see the same case for inner suburban areas. AT is about to release a discussion document on parking policies, including a suggestion that we should have 10,000 additional park and ride spaces by 2041 – which by rough calculation would cost at least $400,000,000. Surely this order of funding would be far better spent on building the first few legs of the Congestion Free Network and associated hubs.

    • Thanks Graeme, exactly. In general AT seem in thrall of PNR as the way to grow ridership, perhaps this suggests that they are only considering this issue through the windscreens of their cars…? This is a driver’s idea of how to use transit; first you drive to it, like a fairground ride.

      You quite rightly note that PNR is excellent for dispersed communities at the periphery, however where it occurs in more central locations it should at least be priced so that it’s value is measured and captured. The New Network will also improve bus feeders to most stations but more work is needed on walking and cycling routes…. Onward.

  • Torbayite

    Some major Auckland carpark builds have been for hospitals.
    Auckland spent $15 million for 375 car parks at the old eye hospital next to the domain.

    I heard Waitemata DHB was spending $40 million on carparks, including the 1,200 car park building opened at North shore about 3 years ago.
    Middlemore built a big car park. Not sure age or cost- it was not there in1996

    I think many hospitals (Whangarei is one I know) have lost there Tennis courts to car parks

  • Christopher T

    Yes the hospitals have really become little car centrals when it comes to redeveloping their grounds to accommodate cars: Auckland City Hospital, combined with the University of Auckland Medical School, is a case in point: surrounded by a sea of parking. This privileging of the car is emphasised by the poverty of pedestrian facilities in the area. Quite ironic given that the medical profession is becoming increasingly concerned with our burgeoning obesity epidemic. I guess it demonstrates two things: the paucity of the city’s PT planning; and that the operation of hospitals is now so in thrall to a market-driven mindset that they’ll do anything to make a buck. It’s increasingly evident that neo-liberal ideology and public health aren’t compatible.

    • Tamaki

      Had to spend a few days around the auckland hospital recently. Tried to go for a walk behind the main blocks and it’s a warren of driveways, roads, car parks on split levels. Impossible to safely negotiate for an able bodied person.
      And I was spending at least $30 a day on parking. That’s what it takes to pay back these parking buildings.

    • Anon

      Yeah, cause if you’re sick you should just catch the bus. Or walk. Of course there’s parking around hospitals, cause when you want to go to hospital you don’t want to look at your bus timetable, catch the bus to town, and then catch the bus back to the hospital. Honestly, use your brains for a few seconds.

      • conan

        Strangely enough people who are not sick go to hospital. There’s all the staff, there’s visitors.

        If you are sick is driving a good option?

      • How about you use your brain Anon? Actually maybe don’t trust your brain and do a little research instead.

        According to the hosptial website sick people are easily the minority at the hospital, in fact patients are the minority.

        They get about 2,000,000 patient admissions a year, of which only one quarter (500,000) are inpatients. Add in another 80,000 a year through the emergency department and it’s still only about 1/4 of patients acutely sick or injured.

        Then you have the staff, 7,500 of them. That translates to just under 2,000,000 work trips to the hospital each year, assuming each does five or six shifts a week.

        Plus the visitors, I don’t know how many that generates but if you assume each inpatient gets one or two then it’s easily a million a year on perfectly able visitors alone.

        So something like 14,000 trips a day to the hospital, of which 90% aren’t for an acute medical issue (and 60% aren’t even patients).

        • Anon

          When your wife is in labour you try getting her in the bus to get to the hospital to deliver. When your son needs a (non-urgent) heart scan, you try getting on public transport to get there. It doesn’t matter who the non-sick are who get there (and honestly if your loved one is in an accident or has a health emergency you’ll probably want to get there as quick as possible), the fact is that many will chose to drive because it is the fastest and least stressful way to get there. We’re going to need carparks at the hospital. That is a fact. Trying to pretend otherwise and playing around with statistics doesn’t actually get away from that fact. And how many carparks are there at the hospital? I’d guess somewhere around 500 based on my last trip there, so that doesn’t seem a lot to cater for 5,000,000 visits to the hospital.
          What’s the alternative here? How do you suggest those who need to go to the hospital get there?

          • Who said we don’t need carparks at the hospital? Christopher and Tamaki were complaining about the paucity of PT and walking provision at the hospital, and I agreed, there are a lot of people who could use it.

            Saying we need better public transport to the hospital because many people could use it isn’t the same as “no one will ever drive to a hospital ever”. You seem to be arguing that everyone should always drive to the hospital under all circumstances for all reasons? What is wrong with giving people a little choice?

      • Christopher T

        Er, if you’re in hospital it’s most unlikely that you will have driven there yourself. If you’re admitted through A&E you’ve probably arrived by ambulance; if you’ve gone there for scheduled surgery then you’ve probably been driven there. Most users of hospital parking facilities are either visitors or staff and encouraging them to use PT would be no bad thing.

        • Anon

          You just proved my point (if you’ve gone there for scheduled surgery you’ve probably been driven there). Loads of people get to A&E by driving because they’re not sick enough to need an ambulance, and loads of people need to get there for non-urgent stuff that is still a pain to get to with PT. I’m with you on encouraging staff to get there with PT, but that needs to be made much easier. Visitors – not so much, if you’re visiting someone in hospital you shouldn’t have stress added to what is probably already a stressful time by forcing a particular transport mode on them. We will always need carparks at the hospital, there is no denying that

          • ” if you’re visiting someone in hospital you shouldn’t have stress added to what is probably already a stressful time by forcing a particular transport mode on them”

            Absolutely correct, which is why we need a range of transport options and need to look at public transport and walking infrastructure, rather than only building carparks. No one is denying we need parking, we are denying we only need parking.

  • GMC

    The irony is that in high-value city centre developments the situation can become reversed. Upmarket apartments and office space won’t sell if they don’t have parking. Despite public transport saturation, I know that in Westminster and the City of London developers push hard to provide parking where the parking maximum is zero. Where else are wealthy residents and CEOs going to park their Mercs and Maseratis?

  • nick1234

    It makes sense that many developments are built with car parking. After all, there will always be a significant number of people who will have a car. Yes, due to living in a higher density area close to amenities, public transport etc might mean they use other options for most journeys, which is great, but there’s perfectly justifiable reasons why you still might need a car and somewhere to park it.

    However I can’t see any reason whatsoever why you’d set mandatory requirements for developers to provide parking. Absolutely let the market decide. What on earth is the logic for it? I like having baths, but don’t believe developers should be mandated to provide baths as well as showers in apartments.

    • Dave B (Wellington)

      “I like having baths, but don’t believe developers should be mandated to provide baths as well as showers in apartments”.

      Good analogy, but it stops short of replicating the nuisance value of cars parked on the street because of indequate off-street parking. Don’t get me wrong. I am absolutely not advocating more mandatory provision of parking. Just trying to highlight how cars (or rather, road-transport in general) is so easily able to extort provision for itself as an unquestioned “mitigation” for all the trouble and harm it inflicts.

      Imagine if people living in shower-only apartments but who really preferred to have baths, decided in huge numbers to set up little sauna cabins or spa-pools which blocked the streets outside their homes. Quite likely we would see the planning rules changed to insist that new dwellings incorporated such provision internally!

      And now imagine if CAF-units and SA-sets were able to continue beyond Britomart and rumble through the streets of the CBD causing unstoppable mayhem on a daily basis. There would no doubt be an urgent cry for them to be put underground!

      Imagine if train-passengers had the same powers of extortion to get what they want as car-users seem to have!

    • mfwic

      So long as you have a shower that is fine. Otherwise the other people on the bus will insist you get yourself a car!

  • Sailor Boy

    My sister caught the bus and then train from Browns Bay to Greenlane two weeks ago for a broken wrist. I would be willing to bet that most trips to hospital even for treatment aren’t sick people but injured people coming for check ups. I also caught a bus to NSH on crutches before.

  • mfwic

    For lower density residential development the issue is confused. If you can get away with a parking pad then the cost is the concrete plus the value of whatever you missed out on using the land for (opportunity cost). But often you will find you couldn’t have reduced the site because of rules so opportunities were limited. The real mistake was requiring two spaces per house. I wrote the report to justify the Auckland City council’s planning committee decision on that in the late 1980′s. The issue as they perceived it was residential streets being full of parked cars and people not being able to have visitors. the average car ownership was closer to I think 1.3 cars but for single lots 0.3 of a space wasn’t an option. It then got carried over to higher density developments for no good reason. If people pay for parking as they need it they then think seriously about its value and whether they really do need it.

    • David B (Wellington)

      Good point. In the suburbs where sections are typically larger and land cheaper, the cost of mandatory off-street parking for 1.3 cars (rounded up to 2) may be small. But transplant that same mandate to higher-density areas and Bingo!, we have a huge market-distortion.

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