Despite drivers’ consistent inability to find parking when they need it, there is an excess of unused parking spaces in big cities. Finding a spot is more difficult than ever, with governments cutting back on street spaces in order to encourage other forms of transportation.
These reductions mean drivers need new locations to keep their cars. Long-term parking rentals are a potential solution for parking scarcity as well as an opportunity for property owners to gain new sources of income.
However, the many space types available, combined with drivers’ diverse parking needs, make it difficult to connect people with spots.
Technology can bridge the gap between people who have parking inventory and those who need it. To understand how this can work, Digital Journal connected with Jeremy Zuker, CEO for North America at Spacer Technologies, a company helping property owners unlock new revenue by renting their unused parking spaces.
Digital Journal: Can people really earn thousands of dollars a year by just renting out parking spaces?
Jeremy Zuker: Definitely. If a host rents out a single space for $250 a month, already they’d earn thousands of dollars. We also have “super hosts” who own a couple of small properties — a restaurant, an office— with five spaces each, for example. If they rent those for even $100 a month, they’ll also be making thousands a year. And real estate partners with 20, 50, 100 spaces of empty parking at their buildings can use our platform to earn tens of thousands.
DJ: How do people determine what to charge?
Zuker: We work with hosts to come up with a price that is fair to the market. For spaces in residential or retail buildings where tenants pay for parking, we would charge the consumer the same rate so that it’s fair. Ultimately the host is free to charge whatever they want but we provide guidance on what we think is optimal.
DJ: Can’t people just use Facebook Marketplace or Craigslist to get the same result?
Zuker: It comes down to specialization of the audience and demand. If you’re renting out your space on a monthly basis, you don’t want people asking if they can rent it for one hour or one day. The way our platform is built, users can view all of the relevant information down to what works for them, including height restrictions, location, and the type of parking.
We also handle payments and deposits, making it easier for parkers and hosts and introducing a higher level of trust.
DJ: Does the app work for businesses with big parking lots as well?
Zuker: One hundred percent. We work with many real estate companies and parking operators that have large parking lots or even multiple buildings with lots.
DJ: What are the most common business types that use the app?
Zuker: It could be a tech company, law firm, or financial institution that needs parking for their employees. We also work with a lot of construction groups. When there’s a big project, it’s important for workers to have dedicated spaces near the work site.
Another group is rental car agencies. Traditional rental agencies have their own lots but sometimes need overflow. If we rent them spaces somewhere close by, their staff can bring the cars as needed. Car-sharing companies also need parking for their fleets.
DJ: What is the Spacer Index and what exactly does it track?
Jeremy Zuker: The Spacer Index has its origins in us trying to help users find space that was previously unavailable. So, we put together a methodology for various types of properties and calculated the number of underutilized parking spaces in a particular city.
We started with San Francisco, where there’s about 95,000 empty spaces that could be rented during business hours or full-time. When you put a monthly price on those spots — we were conservative and estimated just over $250 a month — that’s $250 million in annual rent that’s not being collected.
DJ: What cities have the highest potential for parking rentals, according to the Spacer Index?
Zuker: So far, we’ve done analyses for Seattle, San Francisco, and Washington, D.C., but we’re also seeing high demand in Los Angeles, Chicago, Miami, Dallas — it’s clear to us there’s underutilized space in all the major cities.
DJ: On average, how many empty non-street parking spaces are there in big cities?
Zuker: It varies, but to give an example, the Spacer Index includes spaces in hotels, religious institutions, multifamily buildings, single-family homes, and class B and class C commercial buildings. In Seattle, this totals about 75,000 vacant spots. In San Francisco, it’s roughly 95,000.
DJ: I’ve read that in some cities people are selling parking spaces for $50,000 to $100,000. is that true?
Zuker: There was one in San Francisco, and Hong Kong had a parking space that sold for $1 million. It’s a result of high demand and at the same time supply being taken away. As overall prices have gone up in the economy, a lot of people may be looking for opportunities to earn with what they already have. Renting out your unused parking space is a really easy way to do that.
