RISE report states: 'A first step forward for property operators is to map parking needs and actual use'

RISE came out last week with a hugely well-written report on mobility and parking issues for real estate: Cross-industry system design: Sustainable mobility for properties and neighborhoods. That report states: “A first step forward for property operators is to map parking space needs and their actual use as well as revenue to obtain an appropriate picture of value.”

The beginning and end of many journeys are precisely real estate, either housing or various types of business. This is the underlying practical reason why the report highlights the increasingly important link between Real Estate and Mobility. The report maps and proposes a process for cooperation between the two industries, and assesses the direction of mobility in real estate and what conditions need to change.

The report addresses exactly this “Borderland” within which Mobility46 operates with all its customers, and RISE has done an extensive job of putting into words the challenges that exist.

I have spoken warmly in favor and advocated cooperation between property owners, parking operators and municipalities in all the panels and workshops Mobility46 has participated in over the past few years. The reason for this is that I have witnessed in practice the difficulty that arises if different systems and different actors work in silos regarding parking, electric car charging and mobility. Everyone does “their” thing from “their” perspective. This creates inefficiencies and slows down the transition to a better use of the existing parking assets that already exist.

At Mobility46, the cross-industry system design described in the report has been called a common ecosystem that needs to be created. The end result is called “The Future Car Park”.

According to the report, when two systems, or actors, that have hitherto been completely independent of each other suddenly need to interact, it is common both with perceived barriers and real problems in the areas of Technology, Legislation, Business Models and Culture. I thought I'd give my experience around actual examples of this in the respective field:

1. Technology/Standards: Parking management has historically been very manually managed and the technical (if any at all) solutions that have existed have been very simple in nature (often Excel lists) and not infrequently completely lacking the ability to Communicate with other systems (APIs). A major change that is now taking place is the digitization of the property, including the garage. This means that, as a property owner and parking manager, you must be able to communicate crosswise between different digital locks, different makes of electric car chargers (it's called Open Charge Point Protocol - OCPP), enable mobility operators to effectively conduct their business, etc..
2. Legislation/Regulations: The report singled out parking as an “issue of destiny” in order to succeed in the required conversion. The Tenancy Act is good in many ways, but a disadvantage in this context is the so-called indirect tenancy protection that results from Rent Act. The tenancy protection, together with other similar protective provisions surrounding the rental object, creates large lock-in effects for parking. The landlord may seek dynamism in the parking facility in the form of moving to unreserved spaces or installing electric car chargers in locations close to the power center, but is discouraged from doing so because of fears of roughing up rental conditions with the risk of damages. Further, non-VAT registered BRFs are an example of the tax law's practical barriers to large-scale mobility roll-out. It is the case that an operator cannot directly act as a parking, charging or mobility operator for a BRF that is not registered for VAT, since the allocation of surface/space by BRF to them is typically regarded as activities subject to VAT (or part thereof) which requires VAT registration and collection of VAT by the BRF. Something that the majority of all BRFs are not prepared to do.
3. Business models: In the parking industry, the usual business model between parking operators and property owners for decades has been that the operator rents the entire garage at long lease agreements (Blockhyra). The operator has then been allowed to manage the garage the best they want with of course the sole purpose of maximizing their profit (any excess from parking revenue after the rent is paid becomes profit). Of course, this business model does not work in the future as there is often a conflict of interest in what the parking operator wants and what is the best development of the parking garage, the type of use and services other than car parking (e.g. shared mobility). The solution to this is that we see more and more property owners taking home the availability of their parking and incorporating it into the property's other sustainability goals. Another challenge in parking has been that due to the lack of technical expertise, parking managers have neglected to regulate rental parking as there have been many contracts with relatively low contract value per agreement. The consequence has been unadjusted rents on parking for many years and thus the predatory pricing of parking. Nowadays there are automated fixed enumeration of parking charges which is managed automatically by the Parking Management System.
4. Culture: industries are usually characterized by a peculiar culture that is more or less deeply rooted in the behaviors, thoughts and attitudes of the actors. For property owners, parking has for decades been something of a forced requirement through p-rates, which has also been unprofitable and seen as a risk in the business and balance sheet. Now this approach needs to be changed to ensure that parking, and its connected value-added services — electric car charging, mobility hubs, etc. — meet the transport needs of tenants and society's demands for climate change. In my world, it is obvious that the property owner has a natural and clear, role in this societal transformation!

The shift from a focus on vehicular mobility and old-fashioned parking management to sustainable, comprehensive mobility offerings at the property and neighborhood level, combined with a modern dynamic parking management system is just in its infancy!

When I read the report, it was two sentences that gave me shivers of pleasure. Both sentences summarize incredibly well the thesis that has made me and my team have spent the last ten years working with (the previously dreary, but now exciting) access parking. I will conclude by quoting these two passages from the report:

“It is even alleged that whoever can solve the issue of the parking, can also solve the one about mobility.” (Rode et al., 2019)

'A first step forward for property operators is to map parking space needs and their actual use as well as revenue to get an appropriate picture of value. If it is then decided to reduce the number of parking spaces (stocks) and build with lower parking rates, it is necessary to find a long-term business partner who can provide mobility and relieve the operator of changing mobility needs and market demands.”

Written by:

John Asp

CEO & Co-Founder Mobility46

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