The Logic of Parking Rate Hikes

  • Cyrus Haghighi owns a food and gift shop in Chicago's Andersonville neighborhood, which has become a retail hot-spot in recent years. Haghighi worries suburbanites will avoid his shop once Chicago hikes its parking prices. (Photo by Shawn Allee)

Nobody likes to pay more than
they need to for parking, but a lot
of cities are bumping up the price
lately. Chicago’s going with one
of the biggest hikes. In most
neighborhoods prices are doubling,
and they’ll jump again and again
for years to come. Shawn Allee wondered what might happen to
businesses when parking gets pricier:

Transcript

Nobody likes to pay more than
they need to for parking, but a lot
of cities are bumping up the price
lately. Chicago’s going with one
of the biggest hikes. In most
neighborhoods prices are doubling,
and they’ll jump again and again
for years to come. Shawn Allee wondered what might happen to
businesses when parking gets pricier:

I’m in a neighborhood miles from Chicago’s glitzy downtown, but there’re still
plenty of shops, restaurants and furniture stores to attract shoppers up here.

One problem the neighborhood has is parking.

Until recently, it only cost 25 cents per hour to park here. As you can guess, the very
cheap price for parking has meant very few parking spots available for people who
are driving through.

Now, the neighborhood’s going through a change. It’s bumping up to 75 cents per
hour, and in a few years it will cost 2 dollars per hour.

So, I’m here to see what businesses think will happen to their bottom line once this
price increase for parking comes through.

I’m gonna start at this grocery store.

It’s called Pars Grocery – the sign here says it serves up Mediterranean food, teas,
and gifts.

The owner’s Cyrus Haghighi.

Haghighi: “So of course nobody would come and it would be too expensive for them
to spend too much money for the parking, and I don’t know why they’re doing this
– it makes everybody worried.

Well, that’s one owner who thinks the parking price increase is going to scare
shoppers away.

But I went around the neighborhood to get some other opinions, and I’m now at
another store – the Andersonville Galleria.

I have a clerk here.

His name is Rafe Pipin

Rafe what do you think of the parking price increase?

Pipin: “With the parking meter rates being a quarter an hour now, what happens a
lot of times is that store employees or managers take up the parking on the street
and stay there all day, whereas this may might provoke them to look for parking
further away. So they wouldn’t have to feed higher meter rates all day and open up
space for people visiting the neighborhood to do some shopping.”

Okay. We have two opinions.

One, higher prices will scare people away.

And, another that higher prices might free up space for more paying customers.

Who’s got it right?

Well, I put this to a kind of parking guru.

His name’s Donald Shoup, and he teaches at UCLA.

I’ve told Dr. Shoup about how tight parking is in this neighborhood and where prices are
headed.

“The higher prices that drive away some people will attract other people who are
willing to pay for the curb parking if they can easily find a space. Well, who do you
think will spend more in a store or leave a bigger tip in a restaurant? Somebody
who will come only park free or someone who’s willing to pay the market price for
parking if they can easily find a vacant space?”

Dr. Shoup says cities often make parking too cheap.

He says this discourages public transit.

Plus, it wastes gas because meters fill up fast, and shoppers keep driving around to find
the few empty ones.

Shoup says politicians just don’t want to increase fees.

In Chicago’s case, the city privatized parking meters, so the city made one tough decision
that will last 75 years.

Shoup says there’s a better way – set aside some of the parking money and spend it in
neighborhoods that generate it. Donald Shoup says some people still won’t like parking price increases.

But he says there’s plenty of fuss at first, but then people eventually chuck over the
additional money and forget the increase ever happened.

For The Environment Report, I’m Shawn Allee.

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