Parking in a Post-Pandemic Economy

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.

Pandemic Changes Worth Considering

Some of the parking changes during the pandemic were made on the fly to adapt to a crisis and will be dropped as the recovery continues, but some might be here to stay. This includes several innovative ideas, such as the conversion of streets to outdoor dining to expand restaurant capacities. “Streeteries” have proved popular even in colder climates, and they helped create a neighborhood feel and safer streets for residents. The downside for retailers is the removal of parking spaces. San Francisco lost about 1,000 spaces for dining or parklets. Many cities are considering an assessment for the use of these spaces. Rachel Yoka, IPMI vice president, suggests “parking should be friendly, not free.”

Another innovation is a greater focus on curb management to facilitate curbside pickup, shared ride vehicles, and an explosion of bikes, scooters and other micromobility options.

Changing code requirements to adapt to new levels of parking demand, and a recognition of the growing role of automated vehicles, is another pandemic-related change that could have a long future. 

Finally, charging market prices for parking, such as the demand-responsive pricing programs implemented in San Francisco and Chicago, could also continue after the pandemic. The parking pricing in San Francisco is the most ambitious such program in the U.S., and it may become standard for other cities. Private-sector garage owners could be encouraged to follow, yielding additional revenue and creating a financial incentive for users to consider transportation alternatives. Improved collection technology can help facilitate these changes.

Key Indicators for Future Parking

The nature of the return to work. When most employers bring people back to the office, the nature of new work schedules will make a critical difference. Do all employees return on a five-day-a-week basis? It seems unlikely, as workers have gotten used to the convenience of more time at home. A staggered three- to four-day week seems more probable, but if employers decide that all hands must be present on the same day, there could be the same peak parking demand as seen before the pandemic.

The role of transit. Transit use continues to be down substantially in major cities, as people are not comfortable being in crowded public conveyances.

The appeal of the mall. Retail suffered during the pandemic as consumers stayed home, but online shopping stepped up, including BOPIS (buying online and picking up in store). According to the National Retail Federation, holiday sales rose 8.2% in 2020 and 14.1% in 2021. Surprisingly, in-store sales outpaced online sales. Because of that, retailers need to establish parking for a “normal” year, since the traditional parking ratios are based on a few days of concentrated shopping over the holiday season, a pattern that may relax with more options. On the other hand, malls looking to expand their entertainment and dining options will need to add parking, because those uses have higher parking ratios than retail.

Vehicle ownership and use. The much touted (and premature) promise of automated vehicles (AVs) could drastically change parking needs, especially if people are willing to give up their second or third cars for affordable AV car services.

There are many questions that remain to be answered, but this pandemic-fueled pause in the pace of normal life may open up new and better opportunities for transportation, which will drastically impact parking. 

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.