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A parking garage in Chicago, October 1967. Photo: John Bulmer/Getty Images

The looming deployment of AVs could render parking garages obsolete, which has created a conundrum for developers — whether to invest in parking garages that can be converted for other uses or stop building them entirely.

The big picture: While the need for parking is acute in cities today, parking structures are typically financed with a 30-year payback and some believe that AVs will reduce or eliminate the need for parking as soon as 2030.

Background: American drivers spend an average of 17 hours per year searching for parking at an annual cost of $73 billion. But the math doesn't add up in favor of building new garages because of the looming deployment costs of AVs.

By the numbers:

  • Construction costs for above-ground parking structures can cost $21,000 per space, and another $500 per year to maintain each space.
  • Parking costs average $2 per hour in the U.S., but can reach $33 for two hours of parking in New York.
  • AVs could cost just 50 cents per hour to operate, so it's largely expected that AVs will reduce demand for parking.
  • When parking garages do become obsolete, the cost of converting them varies. In Pittsburgh, for example, it cost $17 million to convert 3 floors of a parking garage into 62 apartment units.
  • Parking designed to be convertible is 17% more expensive to build and holds fewer cars per square foot.

What’s happening: In spite of the tension developers are newly navigating, most cities continue to require developers to add a minimum number of parking spaces.

  • But a growing number of cities are eliminating or easing parking requirements for new development. 
  • And some parking structures are already being built with the intention of transforming them into office space down the road.
  • Meanwhile, developers are transforming unneeded parking spots into retail space in some cases, which could offer ROIs as high as 40%. The real estate value of a single parking space can reach $75,000.

The bottom line: Analysts predict AVs could be roughly 10 years away, and developers are already bracing for shifts in parking infrastructure status quo.

Raphael Gindrat is co-founder and CEO of Bestmile, which has developed a fleet-management platform.

Editor’s note: This post has been corrected to reflect that it can cost up to $500 per year (not month) to maintain a parking space in a garage.

Go deeper

Biden to sign 15 executive actions on Day One

President-elect Joe Biden. Photo: SAUL LOEB/AFP via Getty Images

President-elect Joe Biden is expected to sign 15 executive actions upon taking office Wednesday, immediately reversing key Trump administration policies.

Why it matters: The 15 actions — aimed at issues like climate change and immigration — mark more drastic immediate steps compared with the two day-one actions from Biden's four predecessors combined, according to incoming White House press secretary Jen Psaki.

Off the Rails

Episode 7: Trump turns on Pence

Photo illustration: Eniola Odetunde/Axios. Photos: Elijah Nouvelage, Alex Wong/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 7: Trump turns on Pence. Trump believes the vice president can solve all his problems by simply refusing to certify the Electoral College results. It's a simple test of loyalty: Trump or the U.S. Constitution.

"The end is coming, Donald."

The male voice in the TV ad boomed through the White House residence during "Fox & Friends" commercial breaks. Over and over and over. "The end is coming, Donald. ... On Jan. 6, Mike Pence will put the nail in your political coffin."

Big Tech's post-riot reckoning

Photo illustration: Sarah Grillo/Axios. Photo: Tasos Katopodis/Getty Images

The Capitol insurrection means the anti-tech talk in Washington is more likely to lead to action, since it's ever clearer that the attack was planned, at least in part, on social media.

Why it matters: The big platforms may have hoped they'd move to D.C.'s back burner, with the Hill focused on the Biden agenda and the pandemic out of control. But now, there'll be no escaping harsh scrutiny.