The Effect of Minimum Parking Requirements on Hosing Price (Case Study: Selected Districts of Tehran, Iran)

The housing issue has been one of the most important concerns of humanity in the past century. Housing prices have continuously increased exponentially due to various reasons, making homeownership increasingly difficult over time. This study examines the impact of restrictive regulations on housing prices. Specifically, it investigates the relationship between the minimum parking requirement and housing prices while proposing policy alternatives to replace this regulation. The methods employed in this research include descriptive statistics for variable analysis and inferential statistics, specifically stepwise ordinary least squares regression, to determine the relationships between variables. The data is divided into two categories: survey data collected from 384 questionnaires distributed among real estate market participants in Tehran and transaction data comprising 62,419 residential property sales from December 2021 to December 2022. The findings indicate that the minimum parking requirement has led to a 2% to 8% increase in housing prices. The distributed questionnaire assessed market participants' opinions on alternative policies to reform the minimum parking requirement, and ultimately, the most effective replacement policies were selected.

Urban centers worldwide are experiencing rapid population growth and intensified demand for housing, leading to complex challenges in housing affordability and urban planning. In Tehran, as in many megacities, skyrocketing housing prices have become a critical issue. Among the multiple factors influencing housing costs, municipal regulations particularly those enforcing minimum parking requirements have garnered significant attention. Minimum parking policies are generally implemented with the intent to manage traffic flow, ensure road safety, and encourage orderly urban development. However, these policies also have the unintended consequence of increasing construction costs, thereby exerting upward pressure on housing prices.

In recent decades, a growing body of literature has examined the relationship between parking policies and housing market dynamics. International studies have noted that stringent parking regulations can raise development costs by as much as 10–30% and may lead to a reduction in the supply of affordable housing by disincentivizing the construction of smaller units. In Tehran, the adoption of similar policies has sparked debate among urban planners, real estate developers, and policymakers regarding their impact on market equilibrium. This research aims to fill an important gap by empirically assessing the direct and indirect effects of minimum parking requirements on housing prices in selected areas of Tehran.

The core objective of this study is twofold. First, it investigates how the presence and characteristics of parking mandated by municipal codes affect the pricing of residential properties. Second, it explores alternative policy frameworks, such as imposing maximum parking limits or offering public parking facilities, which may alleviate the negative externalities associated with the current parking policy. The study therefore not only contributes to the academic literature on urban economics and real estate market analysis but also offers actionable insights for policymakers seeking to balance regulatory objectives with the imperative of maintaining housing affordability.