Urban sprawl was driven by convenient modes of transportation and cheaper property values and previous generations have settled themselves nicely in the suburbs. However, the younger generations have a different lifestyle in mind.

The idea of urban walkability is sending a wave of new people that are flooding the city streets. Downtown San Diego is one of the benefactors from the fresh urban trend as residents reinhabit the city.

As the urbanization movement takes hold, one important factor for cities, governments, developers, and real estate investors to consider is the role of vehicles and parking in terms of a commercial real estate property.

The Millennial generation and Generation Z are starting to have a tremendous influence on the commercial real estate industry and their changing transportation behaviors are expected to have a huge impact in terms of parking infrastructure in San Diego and other urban areas in Southern California.

With the shift towards more urban lifestyles, Millenials will begin choosing careers in which their office spaces allow for walkability from their residences.

For commercial real estate brokers, investors and developers, San Diego can create quite a headache with their complex parking code, which is currently a piecemeal of various rules and policies that show no consistency towards an overall objective.

It’s helpful to have real estate professionals or a real esate investing company by your side to navigate through the matrix of parking issues and regulations and property management logistics.

Let’s examine how the landscape of parking in San Diego could potentially develop over the next couple decades and how that can affect the downtown real estate market in terms of commercial property.



Several factors are causing a paradigm shift in the way our cities think and approach parking issues, but the one leading the shift in the commercial real estate market is the emergence of our younger generations in the workforce.

The Millennials and Generation Z are starting to enter the workforce or are already established in their careers. Their overall behaviours and lifestyle preferences are counter-intuitive to the status quo of the past few decades.

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With a focus on technology, their transportation methods are moving away from owning or leasing passenger vehicles and towards rideshare services, automated cars, public transportation or simply hoofing it from their office buildings to their residences.

Parking is not something the newer generations will heavily participate in and the commercial real estate market in San Diego should consider that.

Instead, the younger population is looking for cities where walkability is high and they can perform most of their daily errands by foot.

This is starting to ring true in San Diego County as parking is often difficult to navigate in smaller neighborhoods like Hillcrest, North Park or Pacific Beach.

Commercial real estate professionals are working to increase the walkability of neighborhoods downtown to take advantage of this trend.

If you look at a neighborhood like Pacific Beach or North Park, there’s plenty of retail space in terms of real estate in addition to residential real estate. This helps establish that walkable lifestyle.


Cities struggle to maintain a healthy balance of population to parking spaces.

San Diego is no different; parking minimums rarely see reduction, even in areas near transit, on the basis that all residents will drive in the future.

Constricting parking rules are despised by many developers and real estate investors because reports have found they have adverse consequences: higher rates of traffic, increased development costs, and in the end, higher rates for tenants.

While they may be unintended, these effects can hinder the real estate market, neighborhood growth and economic development for the city.

One example is with low-income housing, where parking can make up 10% or more of the total building’s development costs.

To recoup that cost, the property management needs to charge for parking or include the cost in rent rates.

Either way, it’s an issue for affordable housing because the cost for tenants is considerably higher, forcing the development to relocate to less expensive areas where amenities and public transit are less accessible.


Use Case: San Francisco

One city embracing the parking challenge is San Diego’s northern neighbor: San Francisco. The Bay Area city is experimenting with an innovative solution to manage on-street parking.

They developed SFpark, and system and application that accounts for the population of each block and the on-street parking spaces.

Depending on a combination of factors like time of day, the day of the week, or real-time demand, the app charges a varying rate to encourage a more optimized parking flow.

The objective is to increase parking availability and convenience, while reducing wait times and overall traffic levels.

When users open the SFpark app, they can review the current parking rates and traffic congestion for their desired area before deciding whether to walk, drive, use rideshare, or take public transit.

Younger generations will continue to fuel technological solutions like this to create a more efficient parking system that adapts to their lifestyle.

Solving the issues with parking demand will alleviate the burden on developers and real estate investors to incorporate complex parking solutions to meet the current regulations.


The concept of taking a taxi was flipped upside down when Uber and Lyft started taking over the streets.

Having a cheap, distributed network of black car ‘taxis’ at your fingertips disrupted the traditional methods of transportation, especially in urban areas.

Downtown San Diego has inevitably seen a decrease in the driving population as more people take advantage of inexpensive rideshare services to get around town.

This trend will only exacerbate by the advent of self-driving cars.

With rapid advancements in technology, driverless cars are already testing the streets and operational models are right around the corner.

In the next decade, we could see a dramatic reduction in the amount of drivers on the city streets… along with a lower demand for parking spaces, leaving more room for bigger properties.

Soon, brokers, developers and real estate investors won’t have to negotiate for unnecessary parking spaces when buying a property.

This newfound space can alternatively be used in a more economic fashion, generating higher rent margins for landlords and property managers.

Rent rates won’t have to compensate for the parking costs, and can create more tenant budget and open the door to a host of new opportunities for San Diego real estate and other areas within Southern California.

Developers and investors should consider the effects when thinking about a rezoning project to renovate the existing infrastructure.

Policies and zoning codes might have hidden restrictions, and repurposing the existing space or parking structure could be a more profitable solution.


  • Parking may not affect investors in the short-term, but within the next few years urbanization can affect long-term property investors.
  • Urban commercial properties are experiencing a need for adaptable loading zones as rideshares continue to increase in popularity
  • Investors should think about driverless car technology – as that will affect how parking is handled immensely.

With all of these changes, developers and investors will need to be dynamic in their approach to the changing urban real estate landscape.