America Has Too Much Parking
Urban planners say scrapping parking-spot minimums can reduce construction costs, hold down rents, relieve congestion, revitalize cities, and mitigate the national housing shortage.
Here are today’s highlights:
More people want to work less, and some businesses are taking advantage of that.
Mortgage rates fell for the third straight week.
Opinion: Banning TikTok may not be the best solution.
A print shop owner in L.A. had his business wrecked by a SWAT team.
Rebecca Möller founded Symbihom, which turns California garages into apartments that homeowners can rent out to tenants: “I started my company in 2020 after I came across a BBC article about how Berlin and London are trying to solve their housing crisis through transforming garages into living units. I saw an opportunity to build a replicable, scalable model. So I designed a product that's modular — that can go inside a garage — and San Jose pre-approved it. I got my first investors in May of 2021, and then I built my first model. The walls are proprietary modular panels, constructed off-site by a prefab factory, and already have electrical and plumbing inside. They clip in place on a concrete floor, and then they are strapped up above. I use power and water from the house itself.”
“All of the elements that go inside the unit except for the walls are then taken to a warehouse, where they get aggregated into a pod. Then they are trucked to the site of the garage, along with the wall panels, and installed inside the garage. All in all, after permitting, it doesn't take longer than four weeks to put the whole thing together.”
“My units have sold for $150,000 to $220,000. So far, I've built four units — with five more in the pipeline — throughout San Jose, San Mateo, and Mountain View.” READ MORE
America has too much parking: “Countless residential parking spots go unused, and many downtown garages sit half empty. Ride-sharing and the rise of remote work during the pandemic have aggravated the trend. The average American drove 4 percent fewer miles in 2022 than in 2019, according to government statistics. Recognizing this, cities are shrinking the number of spaces, freeing up the land for other uses, with far-reaching consequences. Garages and parking lots are being demolished. New buildings now come with fewer spots. Major retailers are leasing unused spaces for new development. And local governments are scrapping decades-old minimum-parking rules for new buildings.”
“Urban planners and economists say this helps to reduce construction costs, hold down rents, relieve congestion, revitalize cities and mitigate the national housing shortage by making better use of some of the country’s most valuable land.”
“Three years ago, the Charlotte, N.C., city council granted a rezoning request to Grubb Properties, a local developer, to build a 104-unit apartment close to downtown with no resident parking at all.”
“That enabled it to build about 25 percent more units than would have been possible had the building included parking, said Clay Grubb, the company’s chief executive. Fitting in more units means rents will be about $250 lower than they otherwise would have been, he said.”
“Mr. Grubb contrasted the Charlotte development with a 405-unit apartment project in Aurora, Colo., where city rules require him to build 485 spaces even though he estimates residents will only need 390. ‘That is a complete waste of money,’ he said.” READ MORE
THE 21 HATS PODCAST: DASHBOARD
Winter Is (Still) Coming: This week, Mel Gravely, CEO of Triversity Construction in Cincinnati, explains why he sees a recession looming—even though 2023 has been good so far, and he still has a solid backlog of work. He also talks about how he’s addressing the construction industry’s long-term labor issues, how Triversity lands new business, and what he’s doing to prepare for that recession.
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More people are choosing to work less: “In February 2023, 21.9 million Americans were working part time voluntarily, up from 20.7 million the prior year. Meanwhile, some participants in a four-day workweek experiment in the U.K. say there is no amount of money that could make them go back. Lawmakers stateside have taken notice, proposing legislation that would cut the standard workweek here to 32 hours. It’s hard not to look around and wonder: Would my life be better if I worked less?”
“Employing mostly part-time workers has helped Sam McKenna’s sales-consulting business be nimble and save money. ‘We don’t have people who we’re paying 40 hours who only need 20 hours to get their jobs done,’ the Washington, D.C.-area resident says. “We don’t pay overly competitive salaries. We don’t have health benefits.’”
“And yet, job candidates flood the team with inquiries each month, Ms. McKenna says, even when the company doesn’t have openings. Before the pandemic, it was mostly stay-at-home moms, as well as military and expat spouses who would express interest. These days, Ms. McKenna says she hears from high-powered executives at major consulting and financial-services companies who crave meaningful work, but want a slower pace.”
“Ms. McKenna initially envisioned herself working part-time, too. She left her job at LinkedIn to launch the business in late 2019 with a goal of making half the money she had previously, in half the time she used to spend working.”
“‘I wanted balance,’ she says. But as clients kept coming, she swiftly ramped up to 60 hours a week. Keeping up with demand took, well, more work. ‘You can only do so much part-time.’” READ MORE
Against all odds, an old-school, family-owned department store continues to grow: “Private label, fleece-lined hoodies were flying out of Boscov’s, and CEO Jim Boscov wanted to know why. It turned out that the October 2020 surge in demand had little to do with the personal service and unpretentious vibe that have helped make Boscov’s the largest family-owned department store company in America. It came from young people posting TikTok videos of themselves dancing and modeling inexpensive plaid outerwear from Boscov’s. ‘Our hoodies were going viral,’ said Boscov, 73, the CEO and public face of the privately held company.”
“While Boscov’s has continued to open stores while other traditional retailers are closing, its image remains a throwback to the days when department stores were dominant, and malls were all the rage.”
“The decor in some of its older stores is heavy on mirrors, bright lights, and neon signage evocative of a disco or a casino. Some people likely perceive Boscov’s shoppers as the mothers or grandmothers of those fleece-lined hoodie enthusiasts.”
“Boscov’s is a full-service department store, he said. ‘And we have something you don’t find everywhere: We have salespeople on the sales floor.’” READ MORE
Mortgage rates fell for the third straight week: “The 30-year fixed mortgage rate averaged 6.32 percent for the week ending March 30 — down from 6.42 percent last week. A year ago, mortgage rates averaged 4.67 percent. Mortgage rates factor into home sales and the refinance market and still high rates are impacting housing-related activity. ‘Economic uncertainty continues to bring mortgage rates down,’ said Sam Khater, Freddie Mac’s chief economist. ‘Over the last several weeks, declining rates have brought borrowers back to the market but, as the spring home-buying season gets underway, low inventory remains a key challenge for prospective buyers.’” READ MORE
Even as deposits move to bigger banks, small businesses have little to worry about: “Experts say most small businesses face little risk in a bank failure. The Federal Deposit Insurance Corporation insures deposits of up to $250,000, and most small businesses probably keep far less money than that in the bank. The JPMorgan Chase Institute surveyed 600,000 of its small-business account holders and found that they held a median cash balance of just $12,100. Two things can change that risk assessment: having employees or being funded by venture capital.”
“Payroll costs are one of the biggest expenses for most companies. Gusto, a payroll and benefits provider for more than 300,000 small businesses, said nearly half its clients with 50 to 99 employees had monthly payrolls above $250,000. That figure jumps to 95 percent for firms with more than 250 employees.”
“But only 20 percent of the country’s roughly 33 million small businesses have employees, according to the Small Business Administration, which means few have significant payroll costs that can push their deposits above $250,000.”
“And just 5 percent of companies are sitting on war chests from investors. ‘Silicon Valley Bank wasn’t banking small businesses on Main Street, U.S.A.,’ said Aaron Klein, senior fellow in economic studies at the Brookings Institution. ‘They were banking tech start-ups primarily with venture capital backing.’” READ MORE
OPINION: There’s a better way to deal with TikTok: “Lawmakers’ focus on TikTok’s Chinese ownership misses the real problem with how the internet operates, a problem that goes beyond this one app. That problem, as the journalist Julia Angwin argued recently, is the staggering amount of data that ad-supported apps — wherever they’re based — collect on us; the creepy and opaque ways they use that data to manipulate us, and the weakness of laws protecting our private information from being sold to or pilfered by anyone, including governments. Banning TikTok in response to these industry-wide practices would be a bit like saying that because cars without seatbelts are unsafe, we should ban Japanese and German cars that don’t have seatbelts, because only American products should be allowed to harm us. Wouldn’t requiring seatbelts in all cars, regardless of ownership, be wiser?”
“Who do you suppose benefits if TikTok disappeared from app stores tomorrow? It probably won’t be some groundbreaking new app created by striving entrepreneurs in a Silicon Valley garage.”
“In the absence of substantive rules to restrict the collection of data, profiling of users and targeting of ads by all internet companies, the alternative to TikTok’s opaque algorithm will be Facebook’s opaque algorithm, or Google’s, or Twitter’s.” READ MORE
When a SWAT raid wrecks your business: “On Aug. 3 just after lunch, the 55-year-old [print shop owner, Carlos Pena] was working on an order when he heard what sounded like a helicopter and someone on a megaphone. Pena opened the back door, looked toward the street and saw U.S. Marshals Service agents yelling and gesturing his way. Before he could shut the door, a man hit him on the shoulder with a metal object, kicked him out, then holed up inside. YouTube footage shows marshals with heavy artillery and bulletproof vests taking positions around NoHo Printing and on nearby rooftops. They then stand down when Los Angeles Police Department SWAT vehicles roll into the parking lot behind the shop. Popping sounds soon give way to plumes of tear gas.”
“‘It was like a movie,’ said Pena, shaking his head, his voice world-weary. ‘Out of 10 million businesses, that stupid dude chose mine.’”
“Two days later, marshals let Pena return to NoHo Printing. Client projects were strewn across the floor. Holes were smashed into doors, walls and even the ceiling, which the fugitive climbed into by placing a ladder on a copier. He had somehow escaped.”
“A few years earlier, Pena had switched to a cheaper insurer, who said events like this weren’t covered under his policy. The L.A. city attorney’s office denied his claim in August with no explanation. The U.S. Marshals Service initially rejected his claim, saying he hadn’t asked for a specific amount. When he replied with a detailed invoice for about $60,000, the agency denied him again.”
“‘My claim is going to be denied,’ Pena said. His piercing blue eyes had a thousand-yard stare. ‘If that happens, I’m going to have to sell my house. My business is finally going to be dead.’” READ MORE
21 HATS PODCAST
I Just Cut My Pay: Paul Downs tells Shawn Busse and Jay Goltz that his year has not gotten off to a great start. This was supposed to be the year that Paul unleashed a bold, new marketing campaign that would put his business on an entirely new trajectory—and perhaps it still will be. But for the moment, his revenue has fallen considerably short of his expectations, which has presented him with an unwelcome choice: Should he hold-off on the marketing campaign? Or should he cut his own salary?
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Thanks for reading, everyone. — Loren