Parking Costs Erode Yields as Stall Prices Climb Above $70K
Structured parking is now competing with building shells for the top line on pro formas, with new research putting the average construction cost of a single underground stall at $73,000 and an aboveground stall at $52,000 across 17 major U.S. markets, excluding land and soft costs. Published in February 2026 by the UCLA Institute of Transportation Studies' Center for Parking Policy, the report is a stark reminder that "free parking" has quietly become one of the most expensive line items in contemporary development.
Structured parking crosses into primary-cost territory
Using Rider Levett Bucknall's 2025 third-quarter cost data, the UCLA analysis converts per-square-foot estimates for parking structures into per-space figures based on a typical 330-square-foot stall, inclusive of aisles. On that basis, underground parking averages $73,000 per space across the 17 cities, ranging from $40,000 in Washington, D.C., to $111,000 in Portland. Aboveground structures average $52,000 per space, ranging from $29,000 in Phoenix and Washington, D.C., to $99,000 in Portland.
These are hard construction numbers only; they do not capture land acquisition or soft costs such as design fees, permitting, financing or legal expenses, which push all-in stall costs higher still. In cities where site constraints force structured parking rather than surface lots, those per-space figures now routinely place parking among the dominant drivers of total project cost.
Cost growth outpaces inflation by a wide margin
The report updates UCLA's earlier use of 2012 RLB data and shows that structured parking costs have not just risen — they have decisively outpaced general inflation. Adjusted to September 2025 dollars, the 2012 estimates put the average underground stall at $47,600 and the aboveground stall at $33,600 across 12 U.S. cities. By 2025, the comparable averages are $73,000 and $52,000, representing real increases of 53% and 55%, respectively.
Restricting the comparison to the same 12 cities yields essentially the same results: 50% real cost growth for underground parking and 51% for aboveground parking. The report points to rising labor and materials costs, along with tighter regulatory requirements such as seismic standards, design expectations and electric-vehicle infrastructure, as likely contributors to this outsize escalation.
How much of the building is parking now?
For office and retail projects, UCLA combines city parking minimums with RLB's building and parking cost benchmarks to estimate what share of total construction is effectively tied up in required stalls.
Across seven cities with straightforward office requirements, required parking represents, on average, 39% of total construction costs when provided underground and 31% when provided aboveground. In Las Vegas, required office parking accounts for about 42% of the total cost of underground parking and 31% of the total cost of aboveground parking.
Miami — with high parking costs and relatively high minimums — sees the largest modeled impact. Required office parking in the city more than doubles the total construction costs if built underground and raises them to 79% if structured above ground.
The picture is similar for shopping centers, where minimums tend to be higher. Across seven cities, required parking for retail space averages the same 39% of total construction costs when underground and 31% when aboveground. On average, meeting those minimums boost total shopping center construction costs by 70% when parking is underground and 49% when it is aboveground, relative to building the retail alone.
In Nashville, the combination of a five spaces-per 1,000-square-foot standard and construction costs pushes the modeled increase to 138% for underground parking and 98% for aboveground.
Parking's weight on residential pro formas
While residential requirements are typically set per unit rather than per square foot, the math is no kinder to multifamily deals. Using representative unit sizes (450 square feet for studios, 750 for one-bedrooms, 1,100 for two-bedrooms and 1,350 for three-bedrooms, each grossed up by 15% for common areas), UCLA estimates the absolute and proportional hit from minimum parking on new apartments.
Across seven cities, required parking adds about $67,000 per studio, $76,000 per one-bedroom, $88,000 per two-bedroom and $98,000 per three-bedroom when stalls are underground. With aboveground parking, the corresponding increments are $45,000, $51,000, $60,000 and $67,000, respectively.
As a share of total construction cost, those increments are highest on the smallest units. Required underground parking averages 27% of total construction cost for a studio, 20% for a one-bedroom, 17% for a two-bedroom, and 15% for a three-bedroom. Even aboveground, required parking still accounts for roughly 20% of a studio's construction cost and 15% of a one-bedroom's, with the share falling to 12% and 11% for two- and three-bedrooms, respectively.
In percentage terms, underground parking requirements raise construction costs for studios by an average of 39%, 26% for one bedrooms and 20% for two bedrooms, relative to the building alone; aboveground requirements translate into increases of 26%, 17% and 14%.
For commercial real estate investors and developers, the UCLA findings do not break new conceptual ground so much as they quantify what many pro formas already show: structured parking has become a capital-intensive use in its own right, one that can rival or exceed core building costs in tight urban markets.
By putting clear, city-specific numbers to that burden — in $40,000 to $111,000 increments, one space at a time — the report underscores how central stall economics have become to project feasibility across office, retail and multifamily assets.
Source: GlobeSt/ALM