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You think parking in Miami is bad? It’s actually a bargain

Parking! To Miami drivers, only the word “traffic” instills more dread. Parking in Miami can be vexing, frustrating, time-consuming and expensive. Strip malls and restaurants often just don’t have enough spaces. Valet parkers sometimes take so long to bring your car, you start to wonder if they got lost on their way back.

And the parking-lot traffic jams before and after a sold-out concert at Hard Rock Stadium can rival gridlock on State Road 836 at 5 p.m. on a Wednesday when the president is in town.

The consequences are real. A global study by INRIX Research released in July estimates Americans spend 17 hours per year circling city blocks or lots looking for a spot — at an annual cost of $345 in wasted time, fuel and emissions. Overpaying for parking costs each driver $97 per year — more than $20 billion in total.

Car-crazed Miami-Dade County may not be ground zero for these trends, but we’re definitely in the running. Miami is home to two luxury condo towers — one that allows residents to park their cars inside their home, and another one being built on the priciest acre of land ever sold in South Florida — both branded after cars (Porsche and Aston Martin). Designer parking garages have become tourist attractions — including the signature 1111 Lincoln Road that sold in July for $283 million.

According to the Miami Parking Authority, Miami has the highest utilization rate of the PayByPhone parking app of any city in North America. Still, demand for parking exceeds supply in some residential neighborhoods, where getting home after 8 p.m. may doom you to a parking space blocks away from your front door.

The scarcity of available land — combined with a lack of thorough and reliable public transportation — have resulted in substantive parking fees at restaurants, downtown offices and in some cases, apartment buildings. Some stores and restaurants have seen a drop in foot traffic because of the lack of parking availability or the high cost of valet.

$29 billion business

For Miami residents, today’s parking rates may seem stiff. But comparatively speaking, they’re still a bargain. In the 2017 Global Parking Index report compiled by Parkopedia, Miami ranked 19th in a list of the top 25 cities for weekday two-hour parking, clocking in at a cost of $9.77. New York topped the list as the most expensive in the world with $32.97. Other U.S. cities pricier than Miami included Boston ($20.80), Chicago ($18.66), Washington, D.C. ($14.28) and Philadelphia ($12.18).

When measured in terms of monthly parking price, the U.S. ranked fifth in a list of the top 25 countries, after Switzerland, Netherlands, Japan and Australia.

Parking generates $29 billion in annual revenue in the U.S., according to the National Parking Association. Large corporations have snapped up successful, formerly independent parking operators, consolidating them under national umbrellas while reaping the benefits of their established brand names and clients.

Meanwhile, the prevalence of smart phones has spawned a parking cottage industry in the last few years. Ride-sharing services such as Uber and Lyft have become go-to alternatives for people who don’t want to deal with the hassle and cost of parking. Technology has transformed parking, replacing traditional staples such as coin-fed curbside meters and booth attendants with an ecosystem of more than 200 competing apps, according to Parking Today magazine.

Why is parking in Miami so expensive — and such a hassle?

Despite the industry’s big profits, though, parking is not the revenue generator for city and county governments or real estate developers as frustrated residents might think. And Miami isn’t even in the top 20 list of most expensive parking markets in the U.S. According to a study by City Observatory in Portland, Oregon, the monthly rate of parking near City Hall in the Miami-Fort Lauderdale-West Palm Beach area averages $97.65 — dramatically lower than New York ($732), Boston ($457), Pittsburgh ($245) or even Cleveland ($115).

For the fiscal year ended Sept. 30, 2016, the Miami Parking Authority, which manages 37,970 off-street spaces in garages and lots and 11,210 on-street spaces, generated revenues of $34.2 million (including $6.6 million in parking tickets), for a profit of $7.4 million. Parking made up 5 percent of the city’s total revenue of $670 million — far less than many ticket-weary residents might imagine.

A big chunk of those revenues comes from the City of Miami Parking Surcharge, commonly known as a parking tax, which requires operators of all paid-parking garages and lots within city limits (excluding residential facilities, the airport and the seaport) to pay back 15 percent of their annual revenues. Parking lots operated by the city must also pay the fee.

“If you go to a restaurant and you pay a fee to park, that parking operator has to pay the surcharge,” said Franklin Laso, president of Complete Consulting Services Group (CCSG), a private firm that serves as an auditor to ensure all of the 500 parking operators within city limits comply with the fee.

In 2016, Laso said his firm collected $22.6 million in surcharges on gross revenue of about $150 million. By contrast, Los Angeles collected $107 million, San Francisco $95 million and Chicago $126 million, according to Laso.

Municipal fees

Miami Beach — particularly South Beach — is one of the areas in Miami-Dade County most synonymous with parking woes, including two-hour limits on street parking in busy corridors, strictly-zoned residential areas where visitor parking is prohibited, and $4-per-hour metered rates at surface lots from 9 a.m.-3 a.m. daily.

It is also the county’s second-biggest parking-revenue generator, generating $60.7 million in fiscal year 2016. Revenues included $3.2 million in citations and $544,216 in towing fines. (The city receives $30 from every tow initiated by the police or parking departments). Total profits: $4.1 million. Parking revenues constituted 10.5 percent of the city’s $576.4 million fiscal year 2016 revenue.

Miami Beach Parking Director Saul Frances said that while he understands the complaints about parking, he argues that the city offers plenty of alternatives, including city-owned garages and collaborations with developers to set aside a set number of spaces for public use within their privately-owned facilities. For example, the parking garage at Fifth Street and Alton Road that is part of the mixed-use development housing Publix and Best Buy stores includes 1,080 spaces for public use that are free for the first two hours.

“Miami Beach has entertainment districts right next to condos and residences,” he said. “There are many historic districts where you can’t demolish buildings to add parking. When there’s that scarcity of parking, you have to be able to manage it. Without any regulation, whether it’s a time limit or a rate, parking will get abused. We have 16,000 parking spaces citywide [comprised of 8,424 metered on and off-street spaces and 20 residential parking permit zones], but turnover is the key for us.”

The biggest municipality in the entire county — unincorporated Miami-Dade County — also has the smallest parking presence. In 2016, Metrorail stations generated $1.9 million from 9,018 spaces; the Department of Parks, Recreation and Open Spaces made $1.7 million from various locations, including Crandon Park and Matheson Hammock; the Seaport brought in $14.6 million from 6,910 spaces; and Miami International Airport earned $45.3 million from 8,388 spaces. Combined county parking revenues totaled $63.5 million — about 1 percent of the county’s total revenue of $5.7 billion.

Private vendors

City-regulated parking contributes only one piece to county-wide parking needs, which leaves the industry open to private businesses — and business is booming.

Standard Parking Plus, the largest parking company in the U.S. with a market capitalization of $843 million, trades on the NASDAQ under the symbol SP+. It reported $1.6 billion in revenue in 2016 — the same as in 2015 but a big jump up from $953 million in 2012. The company is comprised of several former standalone regional companies, including Central Parking, Standard Parking and USA Parking.

“If you're looking at what the parking industry has done over the last few years, you see tremendous change,” said Chester Escobar, regional manager for Florida and Puerto Rico for SP+ and the president of the Florida Parking and Transportation Association. “The old days of parking consisted of a lot of little shoebox operations with a booth where they charged you on your way in or out. Today, those small operators may not be able to follow where the industry has headed. You could say the industry is shrinking in terms of individual companies.”

Citizens Parking, the second-largest parking company in the U.S., is also comprised of several former independent operators, including Park One. It is the largest parking operator in South Florida, with clients including hotels (The Biltmore, Acqualina, JW Marriott Marquis), retail (Aventura Mall, Bal Harbour Shops, Dolphin Mall) and residential developments (Porsche Design Tower, Williams Island).

“Parking is a much more corporate business today than it was in the 1970s,” said Jerry Skillett, CEO of Citizens Parking, which was founded in 2014 and has 8,000 employees in 1,200 locations around the U.S. “Our whole investment approach was to buy the best-in-class regional companies around the U.S. and keep the brand-names intact, because there are a lot of client relationships that sit in these companies. Every company that we've purchased has been a family-owned business, which is very typical of this business.”

Skillett declined to disclose the private company’s 2016 revenues but said Miami is its third-biggest market, after New York City and Atlanta. Miami also is one of the biggest in the country for a specific kind of service: Valet parking.

“There are some cities where people don't want to valet, and there are places where you have no choice, like New York City,” he said. “But people in South Florida really value a high level of service. They like the cachet of having their car valeted. It's a very international, sophisticated city, and it’s becoming more and more luxurious.”

Todd Brosius, president of AmeriPark, the valet company that operates at Dadeland, says Miami is one of the company’s top-performing markets, along with New York City, San Francisco and Chicago. But while business in those cities is fueled primarily by density, Brosius says most people who opt to drop between $9-$12 at one of Dadeland’s three valet parking stations are driven by something else.

“It’s pretty easy to find a parking space at Dadeland or Sawgrass if you want to,” Brosius said. “In Miami, the main driver seems to be convenience.”

The ongoing trend toward luxury, particularly in the real estate and hospitality fields, prices out many locals who often can’t afford the high prices charged by hotel and restaurant valet services — as much as $45 — in the county’s denser areas such as Brickell or Miami Beach.

To counter those prices, the Nautilus Hotel on Miami Beach started offering discounted $12 valet parking rates and $10 Uber credits to Miami residents in order to help keep business at the hotel’s Cabana Club restaurant from waning during the off-season summer months.

“It's already so expensive to come to the beach,” said Jimmy Blakeslee, the Nautilus’ assistant general manager. “When a valet company is charging you $20 per car, the hotel has to charge even more in order to make a little money. This kind of discount is geared to attract locals.”

Tech effect

Technology has radically impacted parking in much the same way it has transformed practically every industry.

In Miami, ride-hailing services have become viable options for people who would rather spend the cost of valet parking — or the time they would waste searching for a spot — on an Uber or Lyft ride.

“South Florida has been one of our fastest-growing markets,” said Kasra Moshkani, general manager of Uber Florida. “We have over a million active riders and 10,000 driver-partners in the area now. Every parking space in a city is land being used for storing a car instead of something else. Imagine what the world could look like if you repurpose all the land taken up by parking lots.”

A Lyft spokesperson said the company does not disclose specific passenger or driver numbers but stated that the company has tripled its ridership in South Florida since the summer of 2016.

All those people opting to let someone else do the driving for them has a consequential impact on parking, eliminating the need for it altogether.

“Parking is just like any other industry: It is self-regulating by the consumer,” said Escobar of the Florida Parking and Transportation Association. “If I’m on a business trip and I have to spend four nights at a hotel and pay an extra $45 per night just to have my car parked there, I might just take an Uber from the airport to my hotel and then take an Uber X to my meeting. That will cost you a lot less.”

Another victim of technology: The coin-operated meter. Although you might still encounter one here and there in stray corners around Miami-Dade County, most on-street parking is now conducted via pay-by-plate terminals and apps. One of the biggest is PayByPhone, which is owned by Volkswagen Financial Services (a division of the automaker) and is used in cities around the U.S., Canada, the U.K., France, Australia and New Zealand.

Arthur Noriega, the CEO of the Miami Parking Authority, said 80 percent of parking transactions within the city are done via the PayByPhone app, and the company receives a fee from each one (22 cents for the first 100,000 transactions, 20 cents for the next 150,000 and 19 cents for anything above 250,000 per fiscal year).

But the parking app field has become so competitive over the last two years that some companies are now offering apps that don’t even take a cut of each transaction.

“We had a tech boom two or three years ago and all of these guys jumped into the business,” Noriega said. “Now that the apps have become so popular, the entire business model has changed. They have ways to monetize the app beyond the transaction fee, such as advertising. So the cost of the transaction fee is coming down and we are leveraging that with [PayByPhone]. We are negotiating for a lower fee.”

Technology has also allowed savvy creatives to realize seemingly-impossible ideas, such as the ability to reserve a prime parking space at a mall in advance. In July, Dadeland announced it was handing over 30 of the mall’s 7,000 parking spaces to the creators of MyPark, a made-in-Miami parking app that allows users to pay $3 through their smartphones to reserve a prime parking spot at the mall for two hours, and $3 an hour after that. MyPark splits the fee with the mall.

Luis Mayendia, CEO of MyPark, said the app, launched in 2015, has been successful at every location where it’s been implemented. The company just started its service at Mall of America in Bloomington, Minnesota, the largest mall in the U.S., and is planning to expand to Dubai before year’s end.

“This is one of the best amenities anyone can offer their guests,” Mayendia said. “The hurdle to get people to visit malls and stores is the frustration of the parking situation. When someone says, ‘Let's meet up at the mall on a Friday afternoon,’ the first thing you think about is parking. This app removes that from the equation and takes the hassle out of looking for a spot.”

At the condo

Parking needs also have an invisible effect on a growing city: City-imposed requirements to provide parking spaces for condo and rental apartment buildings can drive skyrocketing construction costs even higher. Depending on the municipality, new parking garages may also be required to sport liners and facades, to protect burgeoning neighborhoods from the blight of concrete and steel parking structures.

“Because of those requirements, the cost of providing parking in the urban core has gotten more and more expensive,” said Nitin Motwani, one of the principals of the $2 billion Miami WorldCenter, the 27-acre mixed-use project spanning 10 city blocks currently under construction in downtown Miami.

Still, Motwani said that Miami WorldCenter, when completed, will include two parking garages offering 1,000 spaces each, to be used by the condos, retail and hotel establishments in the project as well as nearby attractions such as the AmericanAirlines Arena or the Frost Science Museum.

Developers are getting creative with their approach to parking. Jerome Hollo, executive vice president of Florida East Coast Realty, said the upcoming Panorama Tower, a mammoth 85-story luxury rental tower nearing completion in Brickell, will offer tenants discounts in place of parking.

“If you don't take a parking space, you will get a $1,000 yearly credit to your rent,” Hollo said. “There’s a lot of uncertainty right now about parking. The hard cost of structured parking — parking in a garage — is $25,000 to 30,000 per stall. The problem is there's more than just that cost. There’s also operational costs and it also means you can build less office and retail. Everyone is trying to figure out what the right amount of parking is.”

Robert Suris, founder and principal of Estate Investments Group, says parking spaces are a must for the apartment rental complexes the company has built in West Miami, because they’re located too far away from Metrorail for tenants to be able to ditch their cars.

But although the buildings offer one parking space per bedroom up to two bedrooms, their garages take up a lot less space by using tandem parking, which squeezes two cars into every space, one in front of the other.

“That allows us to fit a lot of cars into a smaller garage, which keeps costs down and reduces the massing on the buildings by 25 to 30 percent,” said Suris. “It sounds inconvenient, but people would rather have a tandem spot than only one spot or no car at all. In a 300-unit building that requires 580 parking spaces, we are able to condense the area and fit more units into the project because you're not filling it with parking.”

Other developers, especially in the downtown corridor, are banking on the mass transit options that are soon to launch in the city, such as the Brightline inter-city train service that will connect the downtown areas of Miami, Fort Lauderdale and West Palm Beach. Miami-Dade Mayor Carlos Gimenez is trying to drum up support for a network of electric high-tech buses, or “trackless trains,” that are already in use in China.

Car-free life?

Greg West, president and chief development officer of the multifamily-building developer Zom, says the company has already made a radical decision with its latest building: No parking whatsoever. The company’s 43-story Met Square is the fourth and final tower of the $1 billion Met Miami mixed-use project in downtown. The new tower will house 393 rental apartments, an 18-screen movie theater and the first Real Madrid restaurant/sports bar in the U.S. It also will feature no parking whatsoever.

Instead, tenants will be allowed to park at the 1,200-space garage at the adjacent Met 3 building. An app-based valet service will also be offered.

“If I was building apartments like this in the suburbs, I would expect to have a demand of roughly one parking space per bedroom, which translates into one-and-a-half spaces per unit,” West said. “That's the kind of demand you have in a place that doesn't have pedestrian value. But if you build in a place where people don't need a car, that number starts to go down. With [Metropolitan Square] thus far, our absorption rate of parking has been .6 per bedroom, which translates into less than one space per unit. If you need a space, we’ll rent you a parking space à la carte. But we've already rented 23 percent of our apartments to people who have no car.”

David Arditi, founding principal of Aria Development Group, said his company will also be announcing a new project in downtown Miami by the end of 2016 that also won’t have any parking, because it will be located within 500 feet of a Metromover station.

“In a lot of major cities in the U.S., it's an extreme luxury to be able to park your car in your own building,” Arditi said. “Miami is one of the few remaining exceptions, but we may start to see that here. It’s a viable solution to park three to five blocks away from where you live. That's how people do it all over the world. But now, as the land becomes more scarce and people move into infill locations, parking is going to come at a big premium.”

Even city officials are starting to steer developers toward alternatives to traditional parking garages. On Wednesday, Miami's Planning and Zoning Board unanimously approved an amendment to the Miami 21 code that would allow developers to replace one parking space for six bicycle spaces on any property abutting the Underline, the proposed 10-mile linear park below Miami's Metrorail lines.

Parking in style

Urban planners are starting to think differently about parking, too. In January, the Downtown Development Authority conducted a month-long public space intervention called Biscayne Green that converted 101 parking spaces along the median of Biscayne Boulevard into a pedestrian-friendly promenade of parks, performance stages and plazas. The DDA is also using a $420,000 grant from the Florida Department of Transportation for a lane-reduction study of Biscayne Boulevard that would add on-street parallel parking.

Dacra Development CEO and co-founder Craig Robins, who has led the renewal of the Miami Design District, said he believes the cost of parking should be a “non-issue” in order to attract people to visit a neighborhood, so he’s kept the price at the City View Garage on Northeast 38th Street and First Avenue to $3 for four hours and $5 for valet parking. The prices will be the same at the seven-story Museum Garage under construction on Northeast 41st Street, due to open by year’s end. Combined, the two garages will offer 2,000 to 2,500 spaces.

The City View garage also features facades by artists such as Iwamoto Scott, John Baldessari and Leong Leong Architecture. The Museum Garage will feature even more designs and installations by four architects and one artist.

“I know how people felt about the scarcity and the cost of parking on South Beach in the 1990s, and we want to be the antithesis of that,” said Robins. “We had the opportunity to plan this neighborhood better. We have underground parking and these artistic garages. We want our customers to feel good about parking their cars here. We are not like the Miami Parking Authority, which has a lot of pressure to produce revenue.”

Robins declined to say how much each of the parking garages cost to build. “We acknowledge that we do less than cover our costs,” he said. “We probably have the most expensive parking spaces in Dade County.”

Florida East Coast Realty’s Hollo agrees that big, drab parking garages “are not good for urbanism, because they don’t lend themselves to pedestrians and the people who live there. In developing these buildings, you want to bring the architecture all the way down to the street level, and garages make that more difficult. But right now, they're a necessary evil. We have to provide them. Otherwise where are people going to put their cars?”

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