The Parking Problem That Chicago Developers Want To Build Around
Chicago has made significant strides in advancing transit-oriented development with key stakeholders leveraging the city’s sprawling public transit infrastructure.
Developers are seeking to capitalize on the cost savings on buildings that come with less parking, as well as the relatively small percentage of car owners in Chicago compared to the rest of the country.
New city-sponsored programs have also made it easier for those developers to build throughout a variety of neighborhoods, panelists said at Bisnow’s Chicago Transit, Infrastructure and Aviation Summit held at the Radisson Blu Aqua Hotel on June 18.
“We're getting closer to recognizing just how expensive it is to provide parking, how expensive it is to provide the infrastructure, whether it's the gas lines or the electric lines or all of these other infrastructures that support a car-based economy,” High Speed Rail Alliance Executive Director Rick Harnish said.
To build a parking space in Chicago with union labor on a big project, a surface parking space is about $25K, while structured parking spaces are over $50K, said Jeff Head, vice president of community development for Habitat Affordable Group. To build parking underground, the cost per space is about $100K, which limits development and hinders density, he said.
Head said that when working on the Bronzeville transit-oriented development 43 Green, the company sketched out a design larger than people expected for the location, with less parking than is typically included.
“Those two things work together because parking is very expensive,” Head said. “If we let the parking drive the size of the development, it would have been much smaller and had much lower impact."
The city has made “meaningful gains” in its plan for equitable transit-oriented development that former Mayor Lori Lightfoot introduced alongside key city stakeholders in 2021, according to a May report from Elevated Chicago. The policy encourages more development near transit options on the historically disinvested South and West Sides, expanding affordable housing options across the city.
There are over 100 ETOD projects currently in the pipeline, according to Elevated Chicago. Developers can often receive both city funding and low-income housing tax credits for these projects.
“The Lightfoot administration said we're going to invest in the South and West Sides, and took a lot of heat for it, but that was the beginning,” P3 Markets principal Phil Beckham said. “That was the biggest policy change in the last 35, 40 years, to make that intentional investment.”
The Chicago metro area is also one of the bottom five in the country for car ownership, trailing only a pair of New York metros and one in New Jersey, according to Forbes. That provides a window for alternative modes of transportation to take center stage.
Divvy General Manager Sean Madison said on average, it now takes less than five minutes to walk to a Divvy station throughout the entire city, down from about 10 minutes just a few years ago. He said the company has worked to make bike infrastructure more convenient and that the city’s large projects could be well served to do the same.
“Future-proofing big infrastructure decisions in a post-kind-of-car-centric world, I think, is really valuable,” Madison said. “We need to be very thoughtful about how that looks 15 years from now.”
