6 ms·

Have you ever seen a flat parking lot in the downtown of a US city? Low property tax (because it's unimproved) plus real estate speculation.

Retric 4y ago
You might be surprised just how profitable those parking lots can be. Putting in a 10 to 25+ million dollar multiple level parking garage can pay off, but only if there is enough demand for it and you can get zoning permission.
- TimPC 4y ago
  We aren’t talking multi-level though we are talking about an actual flat parking lot in the middle of a downtown core which is what speculators do and have done in my city while they wait to sell expensive land.
  - Retric 4y ago
    To be more clear. Depending on the location, those flat parking lots can be pulling in 1+ million per year in profit. That doesn’t mean building a multi level parking garage in that same space is actually a good investment because demand isn’t unlimited. What you see as wasted space can therefore actually be a highly efficient business.
    - dntrkv 4y ago
      And if you built even a conservative 5 story building, it would generate significantly more value.
      - Retric 4y ago
        Value possibly, profit not necessarily. Put another way if building a 5 story building would be obviously more profitable then they would do that but the opportunity costs is now 1+ million per year you aren’t getting from the parking business.
        TimPC 4y ago
        Not clear. Plenty of people will forgo selling land to a developer who wants to build a five story building in order to wait for the premium that comes from the developer who wants to build a 50 story building.
    - TimPC 4y ago
      The business has maybe 30 spaces at $20/day. If we assume some people use hourly rates but most use daily lets say each parking space makes $25/day for $750/day. That works out to $273,750 before expenses. To get $1 million you’d need over 100 spaces which is quite a massive plot of land for the downtown core of a city.
      - deleted 4y ago
        [deleted]
      - Retric 4y ago
        ~115 parking spaces can fit on a normal 1-acre paved, marked parking lot. You can double that when cars park in long rows at the cost of having attendants. You can unquestionably have smaller lots, but it’s hardly a massive plot of land.
        TimPC 4y ago
        1-acre is pretty massive for a plot of land in the downtown core of the city. It can fit an entire apartment complex. The sale value is extremely high so the $1 million in revenue isn’t that attractive given the cost of holding the land.
        Retric 4y ago
        I mean there’s a reason we build buildings, that’s hardly in doubt. The point was simply that even seemingly undeveloped land in or near the urban core can be generating a respectable income stream and then after N years the land has also appreciated. This is especially appealing in the event of a presumably short term glut of residential and or commercial properties/zoning issues. Also, an acre with parking attendants doubles the number of cars so they could be clearing close to 2 million before expenses, and attendants aren’t that expensive.
- imtringued 4y ago
  Yes it is profitable to wait for land to appreciate.
  - Retric 4y ago
    Land appreciates either way. It’s far more profitable to charge people 20$ to use 1/300th of an acre for a few hours than to actually do nothing with it. Which means the opportunity cost to build something is higher. Unless the building is going to clearly be wildly profitable it may be better to stick with a parking lot.
jimmaswell 4y ago
Unimproved? Building a parking lot isn't cheap and it does make the land more useful.
- yellowapple 4y ago
  > Building a parking lot isn't cheap It's cheaper than an actual building... > and it does make the land more useful. ...and less useful than one, too.
  - salawat 4y ago
    Usefulness comes in many guises. Think of a parking structure as an enzyme to catalyze transactions with people hailing from a further distance away. Without that space, the exchange can't happen.
    - quartesixte 4y ago
      The drive (no pun intended) here is to make that an unnecessary or at least facilitated through different means. You want people hailing from further distances via public transit and rail, and you want the majority of the businesses in an area servicing a highly dense, local community that can all walk there within 10-15 minutes. This enzyme must be removed, the American Urban Body reworked to reject suburban thinking like this.
- JOnAgain 4y ago
  Trivially cheap compared to a 10 story apartment building.
- deepdriver 4y ago
  If your goal is to put up an apartment building, it's cheaper to rip up asphalt than to demolish a multi-level concrete and steel parking structure.
- spywaregorilla 4y ago
  It is comparatively cheap and comparatively less useful
Thrymr 4y ago
> Have you ever seen a flat parking lot in the downtown of a US city? Houston.

Retric 4y ago

You might be surprised just how profitable those parking lots can be. Putting in a 10 to 25+ million dollar multiple level parking garage can pay off, but only if there is enough demand for it and you can get zoning permission.

TimPC 4y ago
We aren’t talking multi-level though we are talking about an actual flat parking lot in the middle of a downtown core which is what speculators do and have done in my city while they wait to sell expensive land.
- Retric 4y ago
  To be more clear. Depending on the location, those flat parking lots can be pulling in 1+ million per year in profit. That doesn’t mean building a multi level parking garage in that same space is actually a good investment because demand isn’t unlimited. What you see as wasted space can therefore actually be a highly efficient business.
  - dntrkv 4y ago
    And if you built even a conservative 5 story building, it would generate significantly more value.
    - Retric 4y ago
      Value possibly, profit not necessarily. Put another way if building a 5 story building would be obviously more profitable then they would do that but the opportunity costs is now 1+ million per year you aren’t getting from the parking business.
      - TimPC 4y ago
        Not clear. Plenty of people will forgo selling land to a developer who wants to build a five story building in order to wait for the premium that comes from the developer who wants to build a 50 story building.
  - TimPC 4y ago
    The business has maybe 30 spaces at $20/day. If we assume some people use hourly rates but most use daily lets say each parking space makes $25/day for $750/day. That works out to $273,750 before expenses. To get $1 million you’d need over 100 spaces which is quite a massive plot of land for the downtown core of a city.
    - deleted 4y ago
      [deleted]
    - Retric 4y ago
      ~115 parking spaces can fit on a normal 1-acre paved, marked parking lot. You can double that when cars park in long rows at the cost of having attendants. You can unquestionably have smaller lots, but it’s hardly a massive plot of land.
      - TimPC 4y ago
        1-acre is pretty massive for a plot of land in the downtown core of the city. It can fit an entire apartment complex. The sale value is extremely high so the $1 million in revenue isn’t that attractive given the cost of holding the land.
        Retric 4y ago
        I mean there’s a reason we build buildings, that’s hardly in doubt. The point was simply that even seemingly undeveloped land in or near the urban core can be generating a respectable income stream and then after N years the land has also appreciated. This is especially appealing in the event of a presumably short term glut of residential and or commercial properties/zoning issues. Also, an acre with parking attendants doubles the number of cars so they could be clearing close to 2 million before expenses, and attendants aren’t that expensive.
imtringued 4y ago
Yes it is profitable to wait for land to appreciate.
- Retric 4y ago
  Land appreciates either way. It’s far more profitable to charge people 20$ to use 1/300th of an acre for a few hours than to actually do nothing with it. Which means the opportunity cost to build something is higher. Unless the building is going to clearly be wildly profitable it may be better to stick with a parking lot.

jimmaswell 4y ago

Unimproved? Building a parking lot isn't cheap and it does make the land more useful.

yellowapple 4y ago
> Building a parking lot isn't cheap It's cheaper than an actual building... > and it does make the land more useful. ...and less useful than one, too.
- salawat 4y ago
  Usefulness comes in many guises. Think of a parking structure as an enzyme to catalyze transactions with people hailing from a further distance away. Without that space, the exchange can't happen.
  - quartesixte 4y ago
    The drive (no pun intended) here is to make that an unnecessary or at least facilitated through different means. You want people hailing from further distances via public transit and rail, and you want the majority of the businesses in an area servicing a highly dense, local community that can all walk there within 10-15 minutes. This enzyme must be removed, the American Urban Body reworked to reject suburban thinking like this.
JOnAgain 4y ago
Trivially cheap compared to a 10 story apartment building.
deepdriver 4y ago
If your goal is to put up an apartment building, it's cheaper to rip up asphalt than to demolish a multi-level concrete and steel parking structure.
spywaregorilla 4y ago
It is comparatively cheap and comparatively less useful

Thrymr 4y ago

> Have you ever seen a flat parking lot in the downtown of a US city? Houston.