Scottsdale, Arizona, officials were forced to address sticker shock among residents and businesses before breaking ground this month on an $18 million public parking garage where each space would cost nearly $100,000 to build.
Petitions circulated to block the structure in Scottsdale’s Old Town district, a luxury shopping and tourism hub.
Ultimately, the project moved forward after backers explained just how expensive it is to build parking — and as opponents acknowledged that the structure was needed to support Old Town’s restaurants, shops and events.
Developers across the U.S. are spending tens of thousands of dollars per space on parking, with costs now rivaling core building components such as facades, shells and mechanical systems. That’s reshaping how projects are designed and financed.
A report from the UCLA Center for Parking Policy found that required parking accounts for about 39% of construction costs for office and retail projects when built underground and about 31% when aboveground. For apartments, required parking can add roughly $50,000 to $100,000 per unit — and that cost can cause some projects to be delayed, or canceled altogether.
On average, building a single underground parking space now costs about $73,000, while aboveground parking averages roughly $52,000 per space, according to the study, which analyzed construction cost data in 17 U.S. cities. Those figures exclude land and soft costs such as financing, design and permitting.
Between 2012 and 2025, the cost of building parking climbed 50%, according to the report.
Portland, Oregon, tops the list of the most expensive markets for building parking on a per space basis, with underground parking averaging more than $110,000 per space. By contrast, Washington, D.C., and Phoenix are among the least expensive markets studied, though even in those cities, parking costs often exceed $40,000 per spot.
Even as rideshare apps, self-driving cars and flying taxis change how people commute and spend their free time, developers are still prioritizing parking when it comes to project design, with some sacrificing retail space or residential units to make parking pencil out.
‘Major design and budget driver’
Parking is evolving from a routine line item into a significant priority that can dictate whether a project moves forward, according to Jason Rupp, a partner at AO, an Orange, California-based architecture firm with a broad portfolio of commercial properties and experience designing more than 200 parking structures.
“Parking has always been part of development, but over the past two decades, it has evolved into a major design and budget driver,” Rupp told CoStar News.
The result is a new reality in which real estate decisions are increasingly shaped by what happens below or beside the building, not just within it, he said.
Parking construction costs have risen roughly 50% faster than inflation since 2012, driven by labor, materials and stricter building requirements, according to the UCLA report.
Those costs climb further as sustainability rules, environmental reviews and lengthy permitting processes add layers of expense. In some markets, natural conditions such as high water tables make underground parking especially costly, explaining why places like Portland, Oregon, and Miami rank among the most expensive cities in which to build parking, experts say.
By contrast, the smallest cost increases have occurred in Seattle. Although Seattle has some of the highest parking construction costs per space, its relatively low minimum requirement of just one space per 1,000 square feet keeps the cost increases smaller, according to the report.
In Las Vegas, required underground parking for a small office building can increase total construction costs by more than 70%, while in Miami, it can more than double total costs because of flood and resilience requirements, according to the report.
Structural requirements
Shopping centers face similar challenges, with required parking sometimes exceeding the footprint of the buildings themselves and increasing total project costs by as much as 70%, according to the study.
“In most cases, the majority of cost increases we’re seeing are tied to structural and regulatory requirements rather than discretionary upgrades,” said Dave Amundson, a project executive at Pasadena, California-based C.W. Driver Companies, which helps build commercial developments across Southern California.
In markets like Southern California, seismic standards, fire safety systems and engineering requirements can account for 60% to 80% of parking cost increases, he said.
Discretionary elements, such as electric vehicle charging systems, architectural screening and sustainability features, are becoming increasingly common as cities and developers plan for the future. These features generally represent the remaining 20% to 40% of project cost effects, depending on the scope, Amundson said.
Structured parking, especially underground, is now one of the largest cost components in many urban projects, rivaling facades, mechanical systems and even the building shell, according to the UCLA report.
Rising costs are influencing everything from housing affordability to retail feasibility and are prompting cities to rethink long-standing zoning rules.
Minimum amounts of parking
“Because parking can be expensive to provide, minimum parking requirements also dramatically increase the cost of building new homes or opening a new business,” wrote Ellen Schwartz, manager of the UCLA Center for Parking Policy, in the report.
Required parking makes entry-level housing more difficult to build, raising costs by up to 40% for a studio apartment, according to the report.
“These costs disproportionately affect the feasibility of smaller apartments and affordable housing,” Schwartz noted in the report.
Developers often respond by building fewer units or shifting toward larger apartments to spread parking costs more efficiently. Others are adapting innovative methods to meet parking needs on a tight site without expanding the building footprint.
Rather than building wider or deeper garages, some developers use mechanical car stackers that park two to four vehicles in the footprint of a single traditional space.
At Valencia Town Center in suburban Los Angeles County, Fairfield Residential installed an 82‑space automated stacked parking system at a 130‑unit condo building within the larger Villas at Valencia Town Center complex. The system allowed the project to meet parking requirements on a tight site.
If parking is not addressed early, it can force compromises in unit layouts and reduce overall development efficiency.
Integrating the garage
In some projects, developers basically design the garage first and then adapt the rest of the building around it, Rupp said.
Rather than standalone garages, parking is often wrapped by residential or retail space, integrated into mixed-use buildings or used to support amenities such as rooftop decks and plazas, Rupp said.
At Bonanni Development’s upscale 321-unit Cloud House multifamily complex in California’s Orange County, efficient parking layouts unlocked additional residential units and made room for rooftop amenities, including outdoor gathering areas and pools, atop a seven‑story parking structure.
The goal, Rupp said, is to treat parking as part of an integrated system rather than an afterthought.
The rising cost of parking is prompting cities to rethink development rules.
At least 12 of the 17 cities studied by UCLA have fully or partially eliminated minimum parking requirements in recent years.
Housing-starved cities including San Francisco, Minneapolis, Austin, Denver and New York have adopted sweeping reforms, while others such as Seattle, Chicago and Washington, D.C., have targeted downtown or transit-rich areas.
Los Angeles and Boston are among those considering additional changes. In June 2025, Los Angeles took its first formal steps toward potentially eliminating off‑street parking requirements for new development.
In many cases, policymakers have cited high construction costs and housing affordability as significant drivers of reform.