Growing organizations often assume that meeting increased parking demand means increasing supply. From there, they direct their parking planning resources into building more capacity — often without ever acknowledging that building more parking is one of the most expensive and least efficient ways to handle their changing parking needs.
A University of California, Los Angeles study published in February 2026 found that, on average, a single above-ground parking spot costs a whopping $52,000 to build. For underground parking structures, that figure soars to $73,000 per space — and these figures don’t even account for the land those parking facilities are built on.
Transportation demand management (TDM) offers alternative solutions that cost far less and do more to support your commuter base and your organizational sustainability goals. Viewed through a TDM lens, parking planning isn’t about building more. It’s about doing more with what you already have.
Four key concepts can help you get there:
- Understanding the factors that actually drive parking demand
- Reducing parking demand through targeted policies
- Designing flexible, responsive, and agile parking strategies
- Finding the right balance between parking supply and demand
All four concepts share a common philosophical foundation: The most cost-effective parking space is the one you never have to build.
Understanding the factors that actually drive parking demand
When faced with growing demand, organizational parking planning conversations often ask “How many more spaces do we need?” as a default question. Instead, you should ask:
- Why is demand increasing?
- Which influences determine how employees choose to commute?
- What alternative modes of transportation could commuters use?
In asking these questions, the key is to understand that parking demand follows from a long list of operational, geographic, and behavioral factors. These factors can change over time, as they very much have during the recent large-scale shift to hybrid work.
Some of the main factors that drive commuters’ modal choices include:
- Workplace on-site attendance policies
- Access to public transit
- Carpooling and ridesharing participation
- The availability of walking and cycling infrastructure
- Employee schedules and shift patterns
- Local traffic conditions
- Parking availability
Note that parking availability is only one of many different, dynamically interconnected factors. As such, it isn’t realistic to expect a simple (yet expensive) buildout of your parking capacity to solve your demand problem by itself.
You could even find that increasing your parking capacity fails to deliver the results you expected. Hybrid work schedules have dramatically altered legacy demand patterns, and simply adding parking isn’t likely to address the complexities of today’s commuter landscape.
A better place to start is by collecting and analyzing your organization’s commuter data. Look at:
- How your commuters get to work
- What days and times generate peak parking demand
- How your parking occupancy rates stack up at peak and off-peak times
- Whether your commuters are utilizing their parking permits efficiently
These insights will help you develop specific, responsive policies that speak to the realities of your commuter base.
Reducing parking demand through targeted policies
With data-backed insights into your organization’s commuter behaviors, you can start addressing the factors that actually impact parking demand instead of just accommodating it with more parking spots. This is where TDM becomes a valuable strategic item in your parking planning toolkit.
The goal of TDM isn’t to eliminate driving — that’s a commendable ideal, but it’s likely to cause friction with your commuters and create more problems than it would solve. Instead, focus on reducing unnecessary single-occupancy vehicle (SOV) trips before you pony up tens or hundreds of thousands of dollars to build more parking spots.
The foundations of effective TDM strategy are built on:
- Using social and financial incentives and rewards to shift SOV drivers to more sustainable alternatives
- Attaching a visible, daily cost to driving to nudge users toward more sustainable modes of transportation
- Improving commuter awareness of alternatives to driving
- Using parking cash-out programs to organically reduce parking demand
- Supporting employees with personalized trip planners and other resources that make them less dependent on their cars
- Using hybrid work or flexible scheduling policies to further reduce drive-alone rates
On its own, each of these policies might only yield modest results. However, when added together, these strategies can catalyze meaningful reductions in the number of SOV trips your commuters make. That will itself reduce pressure on your existing parking facilities and free up parking inventory without the need to build a single new spot.
Designing flexible, responsive, and agile parking strategies
Parking planning always has a shelf life. The size of your workforce, your on-site attendance policies, the availability of public transit, and your commuters’ transportation preferences can all change over time. When you commit resources to building parking, you’re essentially committing to a solution that might not work one, two, or five years down the road.
Instead of locking into more parking capacity, ask whether flexible parking policies could help you avoid the need to spend huge amounts of money building new facilities. Consider questions like:
- Is the problem we’re facing actually a capacity problem, or is it fundamentally a problem we could solve by managing demand differently?
- Which employees or employee groups firmly require on-site parking? How could we better accommodate those that don’t?
- How much excess parking capacity could we create by allocating spaces dynamically instead of using static permitting models?
- What proportion of our commuters are realistically open to shifting to alternative modes, and how could we incentivize them to make that change?
Considering the costs, building parking is essentially an irreversible decision. Yet, demand for parking is always changing, and it’s also something you can influence through insightful policy. To that end, you should think carefully before going ahead with a permanent solution to what might be a temporary problem.
This primer on parking policy’s role in TDM strategy explains in detail how to develop more flexible and agile parking policies and who those policies should serve.
Finding the right balance between parking supply and demand
Right-sizing your parking supply isn’t about ensuring every employee can park on-site every day. It’s about applying parking planning strategies to ensure commuters have access to the spots they genuinely need, when they genuinely need them, so you don’t invest huge sums of money in unnecessary parking capacity.
As a starting point, optimize the parking you already have. Use TDM initiatives, flexible daily-choice permitting, and dynamic parking allocation to reduce avoidable demand. Then measure the results.
Occupancy may consistently remain high even after introducing these changes. If that happens, and if it leaves commuters who need parking without reliable access to it, then you might be looking at a case that justifies building more parking.
If it doesn’t, then you’ve found a better balance — one that leaves your organization with more capital to invest in growth and productivity.
CommuteHub is purpose-built to support smarter parking planning strategies
Effective parking planning isn’t about accommodating more vehicles. It’s about reducing unnecessary demand so you can avoid the need to invest in costly new infrastructure while also advancing your organizational sustainability objectives.
CommuteHub helps organizations put that strategy into practice:
- Connect parking utilization, commuter behavior, and TDM data to guide planning decisions
- Automate commuter programs that reduce drive-alone rates and support alternative transportation
- Provide commuters with personalized trip-planning tools that reduce SOV reliance
- Monitor parking demand, mode split, and program performance through unified analytics
- Adapt parking policies as commuter behavior changes without expanding your parking footprint or committing to costly capital expenditures
Ready to modernize your parking planning strategy? Schedule a personalized CommuteHub demo today.
