Parking Costs Continue to Hold Back Housing Development in San Jose

Too many San Jose residents feel the crunch of high rents while seeing downtown sites sit empty. The City of San Jose’s Housing Department is working on a Cost of Development study (not yet released) and has begun to share some findings to shed light on why it remains so expensive to build homes in the city, especially the walkable, transit-oriented, and affordable housing our climate and communities urgently need.

Parking is a major contributor to high costs, which the draft study should give more weight to.

Parking spaces take up land, money, and construction capacity needed for living space

The study notes that podium and wrap apartment buildings (see photo above), which are the backbone of infill housing across the Bay Area, rely on structured or podium parking. Podium parking is a multilevel parking structure, usually on the lower levels of a residential building.



While these types of parking conserve space in dense urban settings, they add millions in costs before a single home becomes available. For a hypothetical podium building, parking accounts for roughly 3% to as much as 20% of hard construction costs, adding significant cost before a single home becomes available. For high-rise towers, structured and subterranean parking can represent a substantial share of total project costs, often tens of millions of dollars, making these projects especially sensitive to even small cost increases.

That cost has a ripple effect across the whole project. Developers must charge higher rents, build fewer affordable units, or not build at all.

The most climate-friendly housing types are not currently feasible to build

The study concludes that podium, wrap, and tower apartment buildings are not financially feasible in San Jose today, even before factoring in land costs. Townhomes and stacked flats pencil out, but these lower-density units cannot meet our housing or climate goals, and often create more car dependence. 

SPOT SJ data shows there are already roughly two parking spaces per resident in San Jose. We are not short on space to store cars—we are short on homes.

Parking requirements increase housing costs and reduce affordability

Parking structure costs are especially harmful for affordable housing. The more funding that gets absorbed by parking, the fewer homes that can be built for people.

The cost study confirms that fees and taxes can add as much as $72,000 per unit in some parts of San Jose. Parking is a major driver of these costs because it increases the size, complexity, and footprint of a project.

When land is scarce, smarter parking means more homes

Reducing parking frees up space on the ground: more street trees, safer sidewalks, protected bike lanes, and outdoor dining instead of more asphalt. This is how SPOT SJ imagines streets that serve people first.

The study finds that modest changes in development costs or rent levels could make midrise construction feasible again. Reducing the amount of costly structured parking is one of the most effective ways to achieve that. Even a 5-15% shift could unlock thousands of units in walkable neighborhoods. 

Parking reform is a powerful lever that’s within the city’s control at a time when interest rates, materials, and financing remain stubbornly expensive.

What comes next

There is no single solution to solve California’s housing crisis. But we do know one thing with certainty: we cannot afford to keep devoting so much space and money to storing cars instead of housing people.

San Jose has the chance to lead California in building for our communities and our climate. Reducing the amount of parking in new developments and modernizing our streets to prioritize equitable, accessible, active transportation choices are crucial steps toward more affordable, sustainable housing.

Transform Opposes Anti-Housing Measure in Menlo Park

FOR IMMEDIATE RELEASE

Dec 4, 2025

Media Contact:  Zack Deutsch-Gross, Executive Director, Transform, [email protected], 415.637.0101

The 2026 citizens’ ballot initiative is a nakedly NIMBY attempt to prioritize parking over people  

A citizens’ initiative to block affordable housing on three city-owned parking lots in Menlo Park has now qualified for the November 2026 ballot. The City of Menlo Park had planned for at least 345 affordable homes on the site, but, if the initiative passes, it would be forced to run a citywide ballot measure before it could sell the land or “permanently diminish the availability, access, or convenience of parking”—a prerequisite to building affordable housing on the site. 

“Replacing empty parking lots with affordable housing is a no-brainer, especially in Menlo Park, where there are already great Caltrain, Samtrans, and free shuttle options,” says Transform’s Executive Director Zack Deutsch-Gross. “Transform strongly opposes this retrograde measure that places more value on car storage that sits empty much of the time than badly-needed homes for families.”

The measure would prohibit Menlo Park from selling, leasing, donating, disposing of, or conveying city-owned downtown parking lots without approval by a majority of voters. This would delay and possibly derail the city’s plan to build affordable housing on the sites. 

“San Mateo’s problems of displacement, homelessness, and long commutes will get worse if voters approve this measure,” said Transform’s Housing and Parking Policy Manager Julia Gerasimenko. “Not only will it take us further from our housing goals, but it will undercut transit investments and hurt local businesses in the long run.” 

The measure would also require that if the city intends to make any physical alterations to the downtown parking lots that would permanently diminish the availability, access, or convenience of parking, then the city must submit to the voters a subsequent ballot measure seeking authority to make such alterations prior to implementation. The measure further disallows any actions “which would diminish the availability, access or convenience of public parking for Downtown customers, workers and visitors.”

Parking is never free. It takes up precious civic space that could be devoted to other uses, such as more affordable housing to alleviate the critical shortage of affordable units throughout California and particularly on the Peninsula. Almost one-third of downtown Menlo Park is already dedicated to off-street parking. Residents and business owners pay for this overabundance of parking spots through higher rents, higher retail prices, and missed opportunities to build affordable housing or green space.  

Transform’s report, Parking Revolution/Housing Solution, showed how excess parking capacity generates higher vehicle ownership, traffic, and pollution, and reduces incentives for more affordable transportation modes. The Menlo Park initiative is a regressive and short-sighted attempt to lock the city into outmoded and disproven land use priorities, keeping the downtown core from becoming the vibrant, people-centered space it has the potential to be.

In addition to the parking and transit costs, the measure could make Menlo Park miss its housing development target, which is required by state law. If successful, it could create a new playbook for blocking affordable homes across California. Transform is committed to opposing this measure, which endangers Menlo Park and the entire Bay Area’s housing and transportation needs.

###

Transform works to ensure that people of all incomes thrive in a world safe from climate chaos. We envision vibrant neighborhoods, transformed by excellent, sustainable mobility options and affordable housing, where those historically impacted by racist disinvestment now have power and voice.

Myths About Parking Are Holding San José Back: Here’s What We Can Do About It

If you’ve ever driven in San José and thought, “There’s never any parking,” you’re not alone. But here’s the thing: it’s not true.

San José actually has an estimated 1.9 million parking spaces, which comes out to nearly two per resident. In the heart of downtown, city-owned garages typically sit just 30–50% full, even on weekdays. The issue isn’t a lack of parking. It’s how we’ve prioritized it over housing, businesses, and safer streets.

At Transform, through our SPOT SJ initiative, we’re working with community members to make more efficient use of existing spaces, create more vibrant streets, and reduce the cost of housing, starting with parking myths that undermine our city.

4 parking myths

Let’s dive deeper into four of the most common misconceptions about parking.

We don’t have enough parking.

Despite what it feels like, we have more than enough. Downtown garages like Market Street & San Pedro Square and the Convention Center sit around 40% full on average. The problem lies with our expectations and a lack of signage rather than actual capacity.

Free parking is free. 

It’s not. The cost of the overabundance of parking spots is passed on through higher rents, more expensive retail prices, and missed opportunities to build affordable housing or green space at a time of co-occurring climate and affordable housing crises.

Businesses need front-door parking to survive.

We routinely walk the length of a football field in a mall or Costco lot without thinking twice. There’s a sense of relief to being able to see your destination from where you park, even if you are walking farther than when you park a block or two away from your destination in a dense downtown. The quality of the walk to your destination also impacts the parking experience. A safe, shaded, and pleasant street can turn a stroll into an enjoyable part of the trip. When cities improve sidewalks and make streets more inviting, people are more willing to walk a block or two from parking.

Curbside space must be reserved for parking. 

Curbside spaces can be adjusted to serve different needs, such as outdoor dining, loading, or pickup and drop-off areas, particularly when parking demand is lower, like during certain seasons or off-peak hours. Smart curb management pilots, like the one launched by the San José Department of Transportation in 2024 with 800 monitored curbside spaces throughout downtown, are meant to provide a more accurate report of how much downtown parking is actually used, which will lead to more creative and flexible curbside uses that still allow businesses to thrive. Walkable and bikeable streets often increase foot traffic and retail sales, as we covered in our recent blog.

A new vision for land use in downtown San José

San José’s Downtown Transportation Plan gets it right. It lays out a vision to reduce car dependence and prioritize affordable, climate-friendly transportation. Rethinking how we manage parking is a key part of making that vision real.

This isn’t about blaming people who drive. It’s about making better use of the public space we all share so that everyone, regardless of how they travel, can access opportunity, breathe cleaner air, and enjoy a more connected city. Join us at SPOT SJ to be part of this important conversation and movement.

Bike Lanes are Good for Business, Actually

Transform staff has continuously heard concerns from local businesses in San Jose about parking availability affecting their bottom lines. They worry that if patrons don’t have a space within direct eyesight of their store, they simply won’t shop there. This is a common but mistaken belief — multiple studies debunk this myth.

Space on our shared streets is finite, so space for bike lanes sometimes comes at the expense of street parking. Studies ‘ show that, after adding bike lanes, even at the expense of parking, shopping and economic activity in a neighborhood is more likely to increase than decrease. A 2023 study, Protected Lanes Mean Business, from PeopleForBikes and the Alliance for Biking and Walking, is worth delving into, especially in the context of downtown San Jose, where Transform is working on the SPOT SJ initiative with local merchants and building managers to reclaim public space for people — and shoppers.

Bike riders are shoppers 

To understand the impact of improved bike access on people’s shopping habits, we have to expand our perspective beyond the capacity of the shopper’s vehicle to carry away merchandise. A study in Portland, OR, found that shoppers who arrived by car spent around one-third more than those who arrived by bike, with an average of $13.70 versus $10.66 per individual visit. However, bike riders shopped more frequently and spent 24% more per month than people who shopped by car: $75.66 on average for bike shoppers, compared to $61.03 for car drivers. 

There are many reasons for this. The ease of parking and reparking a bicycle makes it easy for people on bikes to hop in and out of stores. Fast-moving streets make it harder for potential customers to discover local stores; streets with protected bikeways and plenty of bike parking provide a more enjoyable experience for all shoppers and encourage people to linger.

In fact, according to data in the Protected Bike Lanes Mean Business study, car parking generates $0.19 in retail revenue per hour per square foot while bike parking generates $0.69 per hour. Taking away a few car spots can provide space to park two dozen bicycles. Paired with a safe, connected bikeway network, encouraging bike shoppers is a great way to generate retail sales.

Follow the data

Real-world experiences confirm the correlation between protected bike lanes and thriving retail districts. In New York City, retail sales soared by 49% after the addition of a protected bikeway on 9th Avenue, while revenue increased just 3% in other parts of Manhattan during the same period. 

Many cities have created vibrant retail zones through traffic calming, pedestrianizing portions of streets, and improving bike and transit access. Urban centers flourish when we look beyond the car and design for the safety and comfort of all roadway users, not just people driving.

With SPOT SJ, we’re connecting people with apps that help them find available parking spots inside nearby garages that would otherwise sit empty. Better use of dedicated parking spaces can free up street space to build protected bikeways, parklets for outdoor dining, bus boarding islands, and other types of shared spaces. We know reclaiming and revitalizing our shared spaces is one of the best ways to attract visitors to downtown San Jose.

Old prejudices die hard

Widely accepted “truths” often linger long after they’ve been disproved. Induced demand is a good example of this: traffic engineers continue building new highway lanes to reduce congestion even though every metric and lived experience shows this is, at best, a temporary fix.

The “truth” that businesses need car parking spots in front of their doors, even in dense city centers, lingers, sometimes even despite shop owners’ experience to the contrary. For example, the 2023 study cited a survey showing that adding bike lanes on Valencia Street in San Francisco improved sales for 66% of the shops on the street and hurt sales for only 4%. Yet, a city plan to upgrade the bikeways to protected bike lanes faced numerous hurdles, including business owners’ objections.

More shop owners are coming to understand the value of customers who shop by bike. The study quotes the owners of Green Apple Books in San Francisco and Alamo Drafthouse in Austin, among others, who recognize that they can get more customers to their businesses through active transportation.

Coming out of May’s Bike Month, as we continue to celebrate the joy of going wherever by bike, we must all remember that bike lanes are good for business and street safety is a driver of prosperity, not its enemy.

Remembering Donald Shoup, A Longtime Friend to Transform

Donald Shoup, a UCLA professor and a leader in the movement for parking reform, died earlier this month. His work, including his 2005 book, The High Cost of Free Parking, had a big influence on Transform’s efforts to create sustainable communities with abundant, affordable housing. In turn, Shoup was a friend to Transform and an early supporter of our work around parking. 

When Transform launched our SPOT SJ initiative to make more efficient use of parking in San Jose, Shoup was one of the first to reach out and offer his support. He was a committed advocate who managed to stay on top of parking reform priorities nationally and was always available to lend his expertise.

Hear about Shoup’s research and vision in his own words here.

Saving the world, one parking spot at a time

Shoup’s work laid out clearly the negative effects of the abundant free parking found in many U.S. cities. Parking lots take up valuable real estate that could be used for housing, businesses, public amenities, or green space. 

Easy availability of free parking spots in particular induces driving, leading to congestion and pollution. An abundance of on-street parking also makes it difficult to build out networks of protected bike lanes and bus-only lanes, suppressing the number of people willing to opt for those more sustainable modes of travel. Parking structures that are islands surrounded by parked cars make neighborhoods less walkable and encourage driving. 

Shoup’s work started a revolution in how we think about and plan for parking. Since his book first came out, many California cities have reduced or done away with minimum parking requirements that made developers build excess parking capacity, making housing more expensive to build. State law has changed as well, reducing parking minimums for buildings near transit hubs.

Transform’s parking reform campaigns

Transform first connected with Donald Shoup when we released our 2002 report, Housing Shortage/Parking Surplus. He loved the cover of it and asked to use that photo of San Jose, and used it at many of his events.

In 2023, we published a report, Parking Revolution/Housing Solution, which shows how reducing parking minimums is key to solving California’s housing shortage. 

Our SPOT SJ project leverages new technologies to make better use of underutilized parking garages, freeing up street parking spots for civic space rather than car storage. A city full of parking spaces, most of which sit empty most of the time, is bad land use. Using apps to flex the use of existing parking throughout the day has the potential to revolutionize the way we build and think about public spaces.

Shoup was also a fan of Transform’s GreenTRIP tool, which shows ways that new developments can limit driving trips generated by the building.

We are grateful for Donald Shoup’s insightful writing and efforts to promote understanding of the negative effects of the parking glut on urban development. His legacy will live on in our work and the work of transportation and housing advocates around the world.

“Donald Shoup let his light shine and sparked countless thousands to his cause of transforming parking into anything else. He did this through ingenious edutainment, which is modeled by many effective disciples. He says he has to be funny before anyone will take parking seriously. Nothing could be truer. He clearly articulated how excess parking deeply exacerbates inequality and reliably gives us the asphalt-coated communities most of us actually don’t want. We will miss him deeply. He had always only the most wholehearted encouragement that you’d expect from the best professor and coach ever. We are so grateful to have his teachings recorded in many ways an

Ann Cheng, founder of Transform’s GreenTRIP program and Parking Reform Network board member.

San Jose Parking Survey Shows Business Support for Reform

In partnership with the San Jose Downtown Association (SJDA), Transform conducted a survey of local businesses on the topics of parking and transportation access. The results make it clear that San Jose business owners are excited about creative street uses and see the value in investing in them as a way to help support their businesses. 

The survey underscores the importance of the priorities of Transform’s work in San Jose. Our SPOT SJ project uses parking tech tools to make more efficient use of existing spaces, creating more vibrant streets, and then in term reducing the cost of housing, increasing transportation options, and reducing car traffic and GHG emissions.

Transform and SJDA collected responses from 52 local businesses, including restaurants, gyms, art galleries, real estate firms, and offices. We were able to glean concerns local business owners had about parking availability and collect input and ideas from owners about the benefits of creatively repurposing street space to entice customers to their businesses. 





Creative solutions to parking problems

While over half of respondents agreed that the amount of available on-street parking is an obstacle or problem to their business’s success, business owners also had many suggestions for how to tackle the issue. Over 80% of respondents were interested in more maps and data on parking availability downtown, highlighting the need for a resource like Parknav, which is an app that is intended to help guide users to available parking and show heat maps of available parking. In addition, 72% of respondents who indicated they were not aware that the city of San Jose has several managed parking garages expressed interest in promoting the ParkSJ resource.


Over half of the respondents agreed that parklets or outdoor eating areas, along with public plazas and additional plants and trees, would help their businesses succeed if they were able to use some space currently occupied by on-street parking. One business owner shared, “Our priority should be on making the walking and living experience world class. No one evangelizes the ease of parking, they evangelize the destination.”


It is clear business owners are key stakeholders in transitioning street parking to other uses that attract more people downtown. Transform and SJDA will continue to work with local business owners to help support their goals and, therefore, the vibrancy of downtown San Jose.

SJDA and Transform are collaborating on additional resources for local businesses to improve the transportation and street access experience for their customers, so stay tuned for future updates on how to implement parklets, landscaping, interactive signage, and community activation events to help San Jose and its local businesses thrive.

Reclaiming parking for printmaking

Park(ing) Day: Reclaiming Urban Space

Park(ing) Day, an annual event that asks us to rethink the ways we allocate street space, is September 20 through 22 this year. The day aligns perfectly with Transform’s SPOT SJ project, which uses innovative tools to better utilize parking spots, freeing up street parking for human-centered uses.

Parking, housing, and public space

The space we dedicate to car storage — parking — holds the key to solving some of California’s most pressing problems. As our 2023 Parking Revolution/Housing Solution report details, requirements to build parking spaces erode our ability to develop affordable housing. A parking spot can cost between $30,000 and $80,000 to build, significantly increasing the cost of an apartment or home. Plus, the easy availability of parking encourages more driving and thus drives the climate crisis.

In downtown San Jose, as in many other urban cores, many spots in parking garages sit empty for much of the day. Spots in residential buildings may be empty during the day when downtown visitors and shoppers could use them. Parking garages attached to office buildings may have extra space overnight, and so on. By sharing parking spaces among buildings, San Jose can provide enough parking for people who need to drive while freeing curb parking spaces for other uses. 

Our SPOT SJ project works with the City of San Jose and local building owners and developers, as well as parking finder apps, to allocate existing parking, reducing the need to build new parking spaces. In addition, this process can open street space for new bike lanes, transit-only lanes, transit stops, and other people-friendly uses that activate the streetscape and create a welcoming neighborhood people want to visit.

Parking spots reimagined

Park(ing) Day started in 2005 in San Francisco, when designers from REBAR took over a parking spot for a day. They fed the meter but, instead of parking a car in the spot, they set up chairs, creating a one-day, pop-up space. In the almost 20 years since the first Parking Day, the movement has spread around the world. It has gone from being an act of defiance to an exploration of the possibilities of urban space. Events are planned around the world for the 2024 observance.

Every day is Park(ing) Day

Park(ing) Day may have paved the way for curbside parklets, which exploded in popularity during the pandemic and have remained in many communities. The movement to reclaim street parking spots, which can take up a significant percentage of our shared civic space, continues to grow.

Transform’s SPOT SJ collaboration is a conduit for a creative reimagining of San Jose’s urban geography. Instead of car storage benefitting a small number of people, parking spaces can become urban oases, with much-needed seating and spaces for recreation or connection. Thinking beyond our parked-up environment opens new possibilities for car-free transportation and vibrant community spaces. We look forward to working with our partners to see a dynamic neighborhood reach its full potential.

The Latest from Transform

Stay informed on our work to create more equitable, just, and affordable housing and transportation in California.

Address:
1721 Broadway, Suite 201
Oakland, CA 94612

Get in Touch:
510.740.3150
[email protected]

© 2025 Transform. All rights reserved.