Australia's influential Grattan Institute is pushing state governments to abolish mandatory car parking requirements for new developments, arguing they add tens of thousands to housing costs with outdated planning rules that assume everyone drives.
The new report shows parking mandates add $70,000 to a two-bedroom apartment in Sydney, $113,000 in Brisbane, and $137,000 in Perth. Underground parking construction costs between $55,000 and $178,000 per space, depending on location.
This is about outdated 1960s planning rules that assume everyone drives. Axe the car park mandates and let developers build denser, cheaper housing near public transport.
The research found that approximately 40 percent of studio and one-bedroom apartment households don't own vehicles, yet minimum parking rules force parking into these buildings anyway. Studies show as much as 40 percent of basement parking spaces sit vacant nightly.
The Grattan Institute proposes four key changes: remove parking requirements entirely, manage on-street parking with permits and pricing, enable unbundling so parking can be purchased separately from homes, and have the federal government incentivize states to adopt these reforms.
The case for reform is straightforward. In many suburbs, on-street parking spaces actually exceed registered vehicles, making mandatory off-street parking unnecessary for congestion management. The gap between construction costs and what buyers will pay means parking mandates make numerous housing projects financially unfeasible, reducing overall housing supply.
Melbourne abolished parking minimums in the CBD in 1993, and the result was more housing development, not parking chaos. Developers still built parking where buyers wanted it, but they weren't forced to overbuild spaces nobody needed.
Opponents worry that scrapping mandates will lead to streets clogged with parked cars and neighborhoods with insufficient parking. But that's what on-street parking management is for: residential permits, time limits, and user pricing in high-demand areas.
The beauty of removing mandates isn't that parking disappears—it's that developers can respond to actual demand rather than arbitrary rules. Near train stations and tram lines, where fewer residents own cars, build less parking. In outer suburbs where car ownership is universal, build more. Let the market work.
Australia's housing crisis is driven by insufficient supply, restrictive planning rules, and high construction costs. Parking mandates contribute to all three. Developers can't build enough housing because the economics don't work when they're forced to include $100,000+ parking spaces that buyers don't want.
Scrap the mandates. Build more housing. Let people choose whether they want parking. It's not complicated.
