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How Much Money Do Parking Lots Make?

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Re: How Much Money Do Parking Lots Make?

#11

Post by stefan_ »

addajones wrote: post #4
onlyrealcuzzo wrote: post #2

At least in California, especially in Los Angeles, it's really important to factor in that parking lots -- even on land worth $10M+ -- often pay property taxes as little as $100-$1000 a year (thanks to Prop 13). You buy a parking lot, sit on it as the value of land increases (paying effectively 0% in taxes), then you eventually sell, paying only a capital gains tax (much lower than income). I only bring up California…

Thanks for this knowledge. Where can I find more info regarding Prop 13 and the parking lot property taxes? Thank you!

There is nothing much to know except that Prop 13 also applies to commercial property, not just the American homeowner with a mortgage and truck. I'm not quite sure why, but asking the people who voted in the 70s to give themselves a massive tax cut is probably not going to yield anything useful (ask your parents some time!).

Re: How Much Money Do Parking Lots Make?

#12

Post by icsllaf »

I'll never understand how articles like this always talk about Uber and never about public transportation.

https://en.wikipedia.org/wiki/AirTrain_JFK#Ridership

>The AirTrain's ridership has risen each year since then. In 2017, there were 7,655,901 passengers who paid to travel between JFK Airport and either Howard Beach or Jamaica. This represents a 292% increase over 2004, the first full year of operation, when 2,623,791 riders paid.

>An additional 12.6 million people are estimated to have ridden the AirTrain for free in 2017.

When such an answer already exists, there is no reason to even ruminate on self driving cars.

Re: How Much Money Do Parking Lots Make?

#13

Post by rtkwe »

onlyrealcuzzo wrote: post #2

At least in California, especially in Los Angeles, it's really important to factor in that parking lots -- even on land worth $10M+ -- often pay property taxes as little as $100-$1000 a year (thanks to Prop 13). You buy a parking lot, sit on it as the value of land increases (paying effectively 0% in taxes), then you eventually sell, paying only a capital gains tax (much lower than income). I only bring up California…

For parking lots it's a catch-22 of the car centric city design, they're required for businesses to function but you can't charge them the true value of the land because making enough money to cover those property taxes would make parking prohibitively expensive. The real solution is proper public transit of course but that's hard and expensive so we get bandaids instead.

Re: How Much Money Do Parking Lots Make?

#15

Post by andys627 »

I like this billboard from the good old days https://upload.wikimedia.org/wikipedia/commons/thumb/a/aa/Ev....

It says: "Everybody works but the vacant lot. I paid $3,600 for this lot and will hold till I get $6000. The profit is unearned increment made possible by the presence of this community and enterprise of its people. I take the profit without earning it."

These lots produce negative externalities to society and should be taxed accordingly.

Re: How Much Money Do Parking Lots Make?

#16

Post by andys627 »

oarabbus_ wrote: post #6

Self-driving cars will render these obsolete

I don't think they will. The first argument in the article is that people buy these lots to hold and resell later at a higher price when the neighborhood improves. Parking income just pays a little while they wait.

Re: How Much Money Do Parking Lots Make?

#17

Post by dpflan »

I found this article while doing cursory research on the economics of parking lots and booting. My assumption is that when booting companies could charge booted cars to remove the boot on the spot (i.e., on-site credit card reader), then booting became a more serious side-business for businesses that have parking lots (add in CV-monitored parking lot technology - automated delinquent detection).

I have more research to do; if you any insights/knowledge, my curiosity compels me to ask that you share. ;^)

Re: How Much Money Do Parking Lots Make?

#18

Post by ladberg »

addajones wrote: post #4
onlyrealcuzzo wrote: post #2

At least in California, especially in Los Angeles, it's really important to factor in that parking lots -- even on land worth $10M+ -- often pay property taxes as little as $100-$1000 a year (thanks to Prop 13). You buy a parking lot, sit on it as the value of land increases (paying effectively 0% in taxes), then you eventually sell, paying only a capital gains tax (much lower than income). I only bring up California…

Thanks for this knowledge. Where can I find more info regarding Prop 13 and the parking lot property taxes? Thank you!

https://en.wikipedia.org/wiki/1978_California_Proposition_13

I feel like the intuition behind prop 13 is similar to rent control but for land owners. Basically it freezes the price owners have to pay in taxes, so if the price of land goes up dramatically, people who have owned the land for longer pay far less in taxes.

For example, person A bought a house in SF 25 years ago for 300k. Person B buys an identical house today for 1.5M, therefore paying 5x as much in taxes every year even though both houses are worth the same value. This stifles development because any time land changes hands, the taxes dramatically increase. Even though you could make more money turning a parking lot into housing, people often don't because the taxes would increase to a point where it wouldn't be worth it.

The simplified end result for prop 13 (and rent control) is that young people are basically subsidizing old people through their taxes (and rents), keeping prices artificially high. It is incredibly hard to repeal these laws because most of the voters are unfairly benefiting from them or don't comprehend that rent control hurts them.

Re: How Much Money Do Parking Lots Make?

#19

Post by choeger »

icsllaf wrote: post #12

I'll never understand how articles like this always talk about Uber and never about public transportation. https://en.wikipedia.org/wiki/AirTrain_JFK#Ridership >The AirTrain's ridership has risen each year since then. In 2017, there were 7,655,901 passengers who paid to travel between JFK Airport and either Howard Beach or Jamaica. This represents a 292% increase over 2004, the first full year of operation, when 2,62…

Self driving cars are a form of individual travel. An airport train is prescheduled and prerouted. The former beats the latter under specific circumstances only (or we would not have these two categories of transportation).

I would argue that traveling from and to a large airport is about as disadvantageous as it gets for individual travel: Your schedule is determined by someone else. Your route is already fixed. The only benefit of individual that I can think of in that case is the possibility to travel to/from somewhat remote locations directly from/to the airport.

Re: How Much Money Do Parking Lots Make?

#20

Post by TaylorGood »

I know a family that own a parking lot at LAX, as well as a parking lot across from Staples Center in LA. Safe to say it is their crown jewels of assets.

The irony is that the father didn't want these, but they were thrown into a financing deal that he was on the other side of.

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