Ending parking rules could build more homes

The Grattan Institute’s May report, “Wasted Space: Axe Car-Parking Rules to Ease the Housing Crisis,” argued that ending mandatory minimum parking for new homes could unlock billions in construction capacity and build thousands more apartments. The central idea is simple: stop forcing developers to build a set number of parking spaces and let demand dictate supply.

The report estimates that removing these minimums could prevent the construction of 86,000 unwanted car spaces across Australia over five years. This would free up about $5.2 billion in construction costs—money that could instead fund the equivalent of 9,100 additional homes. In Queensland alone, the potential savings are around $1.3 billion and 2,300 homes.

A Major Cost for Brisbane

The issue is particularly acute in Brisbane. Current parking rules add roughly $113,000 to the cost of a typical new two-bedroom apartment. Basement parking can cost between $79,000 and $120,000 per space. This is a significant expense passed on to buyers.

The rules are based on outdated formulas. In reality, a large percentage of apartment residents do not own a car. Grattan notes that about 40% of households in studio and one-bedroom apartments don’t have a car. Even in two-bedroom units, 19% are car-free. As a result, up to 40% of apartment parking spaces can remain empty each night.

One property analyst who has studied urban parking found vacancy rates exceeding 70% in some Melbourne inner-city projects. This data was used to argue for reduced parking requirements, but local councils often rejected these proposals, sticking to the rulebook.

The Impact on Development Feasibility

Parking costs can make or break a project. Consider a hypothetical Brisbane site for a five-story building with 22 apartments. Current rules might require 28 basement spaces, costing around $2.5 million. This expense can render the project unviable.

Reducing the requirement to 0.6 spaces per dwelling, with no minimum for visitors, could lower the need to just 13 spaces. This could save an estimated $1.2 million, potentially allowing for two or three additional apartments and turning a marginal project into a feasible one. For larger developments, the savings are even more substantial.

In a 20-story building with 180 apartments, conventional parking rules might require 220 spaces across four basements at a cost of $18 to $20 million. This often leads developers to increase prices and favor larger units to absorb the cost. Reducing the requirement to 90 spaces could save $8 to $10 million and enable more one- and two-bedroom apartments at lower prices. These rules don’t just determine where cars are parked; they shape what kind of housing gets built.

A Path Forward for Brisbane

There is also a useful Brisbane history lesson. In 2019, Brisbane increased minimum parking requirements across substantial suburban areas. Research found parking supplied per new dwelling subsequently increased by around 23%. Council has since started moving back in the other direction, particularly in well-connected inner-city locations.

A Simple Solution for Housing

Grattan’s report suggests we could avoid $5.2 billion of unnecessary construction and potentially redirect enough industry capacity to build more than 9,000 additional homes over five years. This is not government spending. Much of the benefit comes simply from stopping ourselves from requiring something to be built.