The economics of commuting and parking are gradually shifting.

What tenants want in an office building is changing, and the old model of the isolated suburban office park is going the way of the fax machine. That’s according to a new report from Newmark, Grubb, Knight and Frank [PDF], one of the largest commercial real estate firms in the world.

The old-school office park does “not offer the experience most of today’s tenants are seeking,” according to NGKF. As a result, the suburban office market is confronting “obsolescence” on a “massive scale.” More than 1,150 U.S. office properties — or 95 million square feet — may no longer pencil out, the authors estimate, though a number of those can be salvaged with some changes.

“Walkability and activated environments are at the top of many tenants’ list of must haves,” the report states. Office parks in isolated pockets without a mix of uses around them must have “in-building amenities” –including a conference center, a fitness center, and food service — to remain competitive, according to NGKF: “If tenants are not going to be able to walk to nearby retail or a nearby office property to get lunch, they had better be able to get it at their own building.”

Meanwhile the economics of city center parking is also shifting, but city politics are often holding back the changes.

The idea that building more parking capacity will only increase the number of cars in a neighborhood, or conversely, that removing parking spaces can reduce the number of cars often gets short shrift at neighborhood zoning meetings, but the evidence here suggests this is basically how things work.

When parking lots go away, parking conditions tighten, driving becomes more unpleasant, and some people respond to this by ditching their cars. Rather than enduring permanent traffic jam conditions, neighborhoods simply level down to a new equilibrium with fewer parking spaces, fewer cars, and higher “alternative” mode share as parking gets tighter…

Because [Philadelphia] City Council and the PPA set the prices for curb meters and residential permits so much lower than the rates for off-street parking, drivers have a strong incentive to seek out free or cheap curb parking first, before ultimately relenting and parking in a garage when things get desperate. The George Costanza parking strategy is a great example of a “smart for one, dumb for all” practice that makes sense in terms of individual incentives, but in the aggregate just adds up to a lot of unnecessary traffic congestion.

So Philadelphia, a first step would be to get rid of mandatory parking minimums in private development and just let the market decide. A second would be to let the market decide prices for on-street parking too. The politics of this can be difficult in residential neighborhoods, because that is where the voters are, whereas the office workers are a mix of voters and suburban commuters. But many of Philadelphia’s residential neighborhoods are pretty close to employment centers, making walking a very viable option. Most of the others are very well served by public transportation (that is, public transportation is pretty frequent and goes pretty much everywhere, which is not to say it is always fast or clean or the people running it all have a fantastic attitude). Protected bike lanes and secure bike parking might help people make those trips that are a bit long to walk, and also help people access public transit stops better. There is also the phenomenon of reverse commuting, where service industry jobs in the suburbs can pay better than those in the city, so city residents have an economic incentive to make the trip, but these commutes can be tough and are much easier by car. Boosting the minimum wage and promoting tourism in the city might help a little here, but the service industry is probably not the employment growth industry of the future, The long-term solution here is the thorny one that has alluded our country for decades – educate our children, provide them with the mental tools and marketable job skills they need to make an income, and help them build assets.