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Parking Garages Are Bouncing Back From The Pandemic, But The Old Way Of Doing Business May Need To Change

Restaurants, bars and hotels were among the businesses crushed by the coronavirus pandemic, but others are emerging from the crisis with renewed strength as consumers continue to be wary of crowds.

Logistics firms now serve millions of homebound Americans. And many downtown parking garages have done relatively well as commuters shun public transportation.

“I have been surprised by how strong the parking markets have been,” said Joseph Schwieterman, director of the Chaddick Institute for Metropolitan Development at DePaul University.


Many office workers remain at home, so garages aren’t necessarily rolling in dough like logistics and distribution firms. Overall, though, the facilities are doing better than expected considering how few downtown workers have returned to their offices.

According to the Chicago Loop Alliance, an anonymous survey of downtown parking garages shows occupancy rates have hovered at or near 60% ever since the advocacy group started tracking the data in early May. Data from Kastle Systems, a security company that tracks access-card swipes around the U.S., shows only 27.9% of Chicago workers were back in the office as of June 30. By last week, Chicago had ticked up to 30.4%.

The strength of downtown parking garages should be a concern for transit advocates, Schwieterman added. Although most experts consider public transportation safe as long as proper caution is observed, if downtown visitors and workers continue worrying about being confined aboard buses and trains due to Covid-19, those worries could lead to empty seats on public transit as more offices open up this fall, causing avoidable congestion and pollution.

“Lifestyles have changed in ways that make hopping in the car especially appealing,” Schwieterman said.  

The recovery of parking garages isn’t just driven by commuters deciding to skip the trains and buses. It’s everybody who wants to pay downtown a visit.

“Many consumers of entertainment or restaurants downtown are loathe to use transit,” Schwieterman added.  

That’s backed up by hard data.

Wen Sang, CEO of Smarking, a San Francisco-based firm that collects transaction data from more than 2,000 parking locations nationwide, said the recovery for parking garages is largely driven by transient parkers rather than the daily commuters who typically purchase monthly permits.

In Downtown Chicago, where Smarking tracks about 50 parking properties, in July and August the number of daily commuters was down 34% and 31%, respectively, when compared to the same months in 2019. But transient parking was fully back over the same period, even edging ahead of the pace seen two years ago.  

“The general trend is that transient parking has recovered a lot faster,” Sang said. “People are out and about, going out to dinner at restaurants and doing what they want to do.”

Although it's early days for workers returning to their offices, what he’s seen so far makes Schwieterman hopeful public transit systems will recapture much of its customer base.

“My prediction a few months ago was companies would allow people to come in for a few hours, perhaps attend some meetings, and then return to their home office,” he said.

Washington-Wabash Station in Chicago's Loop

That ad hoc approach would most likely cause many workers to drive into the downtown, occupy parking spaces briefly, then drive back home. But so far, most companies that have adopted hybrid working arrangements want employees in the office for several complete days and that will mean rush-hour commutes in the morning and evening. Sitting in traffic jams hasn’t gotten more attractive during the pandemic, so transit systems such as the Chicago Transit Authority and Metra should eventually fill up again, Schwieterman said.

CTA officials say its average weekday ridership is now up to more than 700,000, roughly half of pre-pandemic levels. Metra officials say their trains are carrying 75,000 commuters per day, roughly 25% of ridership in July 2019.

Fully returning to 2019 ridership levels is probably not in the cards, however, Schwieterman added. Work-from-home strategies, even if it’s only for several days per week, will unavoidably cut travel.

Moody’s Investors Service predicted in March 2021 that public transit use would decline by about 20% in several metro areas, including New York City, even after the pandemic subsides. Chicago could see a similar decline.

“That seems to be reasonable, if a little pessimistic,” Schwieterman said.

What’s even harder to predict is whether public transit systems will fully recapture commuters and visitors that do return, luring them back out of their cars and parking garages, he added. Other worries about the pandemic, including that downtown residents would flee the dense urban core, have not materialized. That could mean many want to return to their normal lives.

“Many of these fears have proven to be unfounded,” Schwieterman said. “We’ve been pleasantly surprised by the strength of the downtown [residential] market. So I do think that once normalcy returns, public transit will return to people's daily lives.”

However long it takes for public transit to recover, the reordering of office life may also spark change from parking garages. If many office workers only come in several days a week, the traditional monthly parking permit will no longer work, according to Sang.

“Before the pandemic, business was good, and no one was under pressure to do anything different,” he said. “But our view is that the industry needs to develop flexible parking options and make customers’ lives easier.”

Landlords and garages mostly use outdated technology, Sang added, and that forces commuters or tenants to either pay for full monthly permits or just use transient parking. He advises these groups they’ll need to ditch the paperwork and access cards in favor of digital systems that, much like Uber or Lyft, users can bring up on their phones and offer a variety of payment options based on how often they use garages.  

“If I’m not coming to the office every day, why am I paying $300 or $400 per month?” he said.