Parking in a Post-Pandemic Economy

By Robert Dunphy

This article was written for and originally published in Development magazine, a publication of NAIOP.

As workers return to offices and shoppers return to stores, new parking strategies may emerge.

The COVID-19 restrictions that began in March 2020 led to business closures and a sharp cutback in personal travel that caused demand for parking to plummet. Except for curbside pickup of retail purchases and carry-out meals, most travelers stayed home and avoided commercial and private parking lots and on-street spaces.

In April 2020, passenger travel on roads declined by 60%, while public transit usage fell by 81%, and air travel slumped by 96%, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics. It was not until the spring of 2021 that passenger car travel returned to 2019 levels on average, but with wide variations across the country.

A Range of Responses

The recovery of parking demand is tied to the return of employees to offices and shoppers to retail centers. According to data provided in a January video discussion by the International Parking and Mobility Institute (IPMI), municipal parking facilities supported by ParkMobile, a parking app, experienced a 92% decline in early 2020, and slowly recovered to 2019 levels by the summer of 2021. Most municipalities surveyed responded to demand declines by suspending parking enforcement and parking fees.

For example, Greenville, South Carolina, returned to a pre-pandemic level of parking transactions in 2021, but with a larger mix of daily vs. longer-term customers, according to the January IPMI discussion. This led to more customers paying with a parking app. Parking in Pasadena, California, peaked at about 85% of normal usage by the end of 2021, hinting that the parking demand — and revenue — may remain below pre-COVID levels.

In February, the Chicago Loop Alliance reported that downtown Chicago saw garage parking shrink to a mere 20% of normal usage in 2021. Garage rates were gradually lowered to match demand. By the end of 2021, parking in city garages rebounded to 37% of normal. That was slightly higher than office occupancies, once again reflecting the slow recovery of business. Parking meter revenues in 2020 were reported at 67% of 2019 levels, substantially higher than garage parking, reflecting higher levels of auto commuting than transit. (Street meters in Chicago are operated by a private contractor.) City transit ridership was at 49%, ahead of other cities.

San Francisco has operated a market-based pricing program for downtown parking since a pilot program in 2011. Rates are adjusted to assure that blocks do not fill up, which encourages wasteful “cruising” to find a space. Instead, price-sensitive drivers can settle for cheaper, lower-demand parking spaces farther away, or use another means of transportation. The demand-responsive parking program was expanded to all meters in the city in 2018.

When the pandemic hit, San Francisco experienced similar shutdowns as elsewhere. By April 2020, parking in city-owned garages, with 14,500 spaces, was down 93% in utilization and 94% in revenue from pre-pandemic levels, according to data from the San Francisco Municipal Transportation Agency. In response, rates were lowered to 50 cents an hour and enforcement ceased, resulting in revenue declines of 90% or more. This made it hard to measure utilization, since most people probably weren’t paying the meters.

In July 2020, rates returned to pre-pandemic levels minus 50 cents an hour across the city, an approximately 20% discount off pre-pandemic rates, and enforcement was reinstated. Revenue jumped to 50% of pre-pandemic levels. Since July 2020, utilization and revenue have tracked with COVID-19 surges and business reopenings, peaking briefly at 100% of pre-pandemic revenue before the omicron surge, and now at about 85%-90% of pre-pandemic revenue. On-street parking for the 26,000 metered spaces followed a similar pattern. Transit revenue on city buses, streetcars and cable cars, in contrast, declined by 92% in 2020, and by December 2021 it had only recovered to 35% of normal.

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Robert Dunphy is a transportation consultant, an Emeritus Fellow of the Transportation Research Board, and an adjunct professor in Georgetown University’s Real Estate Program in the School of Continuing Studies.

This article was written for and originally published in Development magazine, a publication of NAIOP. Republished with permission.