AUTOfoco.com, the online platform for classifieds and automotive content in Argentina has analyzed the parking system in the City of Buenos Aires. Since, this task, became an odyssey. The reason for this difficulty is, above all, that the price of private parking has been increasing exponentially in recent years, even doubling.
While it is true that there are various factors that have influenced this increase (and which we will discuss later), drivers who must park in certain areas of the city such as downtown or Recoleta bear the worst of it.
As we mentioned, the rental price varies significantly depending on the area of the Buenos Aires city where we want to park. Thus we can find prices between 25 and 50 pesos per hour and between 2.000 and 2.800 pesos per month for parking in the most expensive areas such as downtown Buenos Aires, Las Cañitas or Recoleta.
If we are looking to park in neighborhoods like Liniers or Constitución, the monthly rent can cost us about 800 pesos per month. This has made many users have decided to do without the service because they cannot assume its cost.
The problem is that leaving the vehicle on public roads is often not an option, either due to lack of space or due to insecurity. On the other hand, the fine for bad parking has recently increased from 770 to 965 pesos.
The issue of high private parking prices in Buenos Aires is just one of the reasons why Buenos Aires is considered by several international consulting firms as the most expensive capital in Latin America above cities like Mexico DF and even more expensive than some European cities such as Madrid and Barcelona.
According to an international report, private parking prices in Buenos Aires exceed those of other Latin American cities. While in the Buenos Aires city the monthly rent reaches 218 dollars in other cities like Rio de Janeiro the cost is 211 dollars, Lima is 190 dollars, or Santiago de Chile, 160 dollars.
WHY DO THE PRICES RISE SO HIGH?
According to an international study, the hourly price of garages increased 170% between 2010 and 2014 in Buenos Aires. An increase that has continued to be repeated during 2015 and 2016.
For the Chamber of Garages and Parking (CAGESRA), the increase in prices is largely due to increased costs such as water, wages (27%) or the value of insurance (+ 20%).
Eduardo Sánchez, president of CAGESRA, points out that in recent times many parking businesses have been forced to close due to not being able to assume cost increases such as water.
According to Sánchez, between 1998 and 2014, 1,250 garages have been closed and few new ones have been opened. This complicates the situation if we take into account that, according to the Association of Automotive Dealers of the Argentine Republic (ACARA), the number of vehicles in circulation in Argentina in the last ten years has grown by 75%.
COSTS TOO HIGH
The water service is the one that is creating the most problems for the private parking sector, as Sánchez denounces. The problem has to do with the categorization of “non-residential” that this type of establishment receives.
In addition, the calculation of the invoice is not issued through meters, but taking into account the location and the square meters of the establishment. All this means that the water bills of the garages have skyrocketed to the point of paying higher bills than a car wash, which puts the viability of some of these businesses at risk.
As a general rule, a parking lot consumes little water, except for the presence of one or two bathrooms, explains Sánchez. As an example of the new costs, there are establishments that have gone from paying about 2,000 pesos to paying 7,500 on the water bill.
To correct the problem, the sector has been requesting that the assigned category be changed to have a residential rate as well as having a meter to know the real consumption of the establishments.
A PROFITABLE INVESTMENT?
For some years now, for investors or people looking to open a new business, a parking lot was not at all a crazy idea if we take into account that in the last ten years the number of available parking lots has decreased by 33%, while the park automotive has grown by 75%, (according to Ages and Acara, respectively).
Therefore, the demand for parking, especially in busy areas of Buenos Aires such as the downtown area and, increasingly, Belgrano, Barrio Norte and Palermo, means that this has been a good business.
According to experts, the annual net profit in this type of business ranges from 4% to 8%. However, and given the current situation, the costs are reducing the benefits to the point of ceasing to be profitable, they point out from the Chamber of Garages. A situation that, if left unchanged, could end with the closure of many small garages in the Buenos Aires city.