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Car-Free Developments Gaining Traction in Historically Car-Dependent Cities

Even with the threat of climate change becoming more apparent, and an increasing focus in real estate investors' analyses, building a truly car-free development in booming Sun Belt cities isn't always a simple process.

In Tempe, Culdesac had to obtain a waiver on minimum parking requirements the city has for new development — commonplace in cities across the U.S. — which required a vote from city officials. The developer also had to work with the city to ensure emergency vehicles could access buildings onsite. Walking pathways through the project are wide and strong enough to carry a firetruck, Sunder said.

During Grubb's rezoning process for the site in Charlotte, it made commitments to try and offset any potential impact of not allowing resident parking in the development. Local neighbors expressed concerns that residents in the new development would own a car and park on nearby streets instead, but Grubb and others building car-free developments say they are putting provisions into leases that bar leaseholders from owning a car.

Applefield said, in general, there are mental hurdles to overcome by eliminating parking in new residential development. Local city officials in Charlotte ultimately voted in favor of the project but it took months of working with residents, city staff and elected officials to get the rezoning approved.

Since then, the developer has worked with the local biking community and an architecture firm that owns a bike shop in town to design and program the building. Each unit will have access to at least two public bicycle racks in the building and apartments will contain bike racks, too. A ground-floor cycle and maintenance center are also being built in the project.

"In Charlotte, a city of 900,000, would 100 people be willing to take a chance on living in this type of environment? I think the answer is yes," Applefield said.

And as more people relocate out of dense cities already used to car-free living, such as the Pacific Northwest and Northeast, to the Sun Belt, projects that don't have parking — which carries extra cost to a project that ultimately gets passed to the renter — could become more popular, he continued.

Culdesac has also inked partnerships with groups like Lyft Inc., Bird Rides Inc. and Valley Metro, the Phoenix-area transit system, to offer discounts and package deals to residents for ride-share, e-scooter and transit services.

Sunder said, at Culdesac Tempe, 60% of the founding residents are from outside of Arizona.

"They want to move here just for the development," she continued.

Financing is sometimes also cited as an obstacle to building car-free developments. But at Culdesac Tempe, the firm is using traditional debt and equity sources to fund the project. Grubb is leveraging its OZ fund dollars for equity at its west Charlotte car-free project and continues to work through the debt portion, Applefield said.

Reasons for developing car-free projects can range. At Culdesac Tempe, Sunder said the developer can reallocate space that's typically used for parking to adding spaces like parks, plazas, wide promenades and courtyards. More than 50% of the project is open space, she said.

Grubb Properties is committing to below-market-rate units at its project with its OZ equity funding and the elimination of parking. Half the units will lease at rates that are affordable for households earning 80% of the area median income.

Applefield said parking in a new project in Charlotte can cost $15,000 to $40,000 per space. Assuming it would cost $20,000 per space to build parking at its west Charlotte project, for 104 units, that's savings of more than $2 million.

Finding the right site and a government body's comfort level with no or reduced parking are key to getting car-free projects across the finish line and built, Applefield said.

"This is a really good model for creating those units with less cost," Applefield said. "We think it could be replicated in other locations where you do have that nexus with greenway, transit and close proximity to a business district."



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