The New Parking Meters and The Chicago Economy

February 17, 2010

About Chicago

Old, but Loved, Parking Meters

Old, but Loved, Parking Meters

While the national economy has been on everyone’s mind for a very long time now, recently I have been wondering about the health of the local Chicago economy. Specifically, I have been contemplating the trickle-down effect the new parking meter system has on local businesses.

Last year Mayor Daley made the controversial decision to privatize the parking meters in the city. In a matter of 48-hours he rammed his decision through City Hall and sold the rights to Morgan Stanley Communications and Chicago Parking Meteres LLC. With the new system, Morgan Stanley is allowed to keep all revenue generated from the meter machines, while the city keeps the revenue generated from tickets issued to vehicles with expired tickets.

What Impact Do the Meters Have on the Economy?

Here is where the larger state of the City’s economy comes in to question. While driving around Chicago yesterday I decided it would be nice to have a hot latte from Starbucks. I pulled up outside, and luckily, I found a spot right in front of the store. I then realized the parking meter pay kiosk was halfway down the block. I sat in my car for a second and thought, “if this were the old days, I could throw a quarter in a meter run in and I would have my wonderful hot latte in my hands.” The walk to the meter in the cold weather led me to pull away without my hot latte.

I then began wondering how Starbucks would feel knowing they missed out on a sale due to the fact that the parking meter station was too far away from their establishment. And, I wondered how many sales they miss on a daily basis due to this setup. To take it further, I started asking friends and colleagues if they make shopping decisions based on the meter situation. I found a resounding “yes.” One person stated that she will go out of her way to avoid the Walgreen’s with no parking lot and find a store that has free parking. I also repeatedly heard people say they avoid carry-out restaurants without a drive-through or a loading zone. I used to park at a meter right outside my office. I was happy to run out and feed my meter every couple of hours. It only cost me $1.00 for one hour of parking. Now, because the pay kiosk is almost half way down the block, I will drive around to find free parking within the neighborhood. Again, the parking revenue is lost.

The Small Loses May Add Up

If you add up a simple latte from Starbucks and multiply that by the number of people that avoid the meter, that number could be astounding. Small businesses must be thrilled. I would like to see a “before and after” analysis of the revenue to the City, including all costs. I would also like to ask small business owners their feelings, but I am confident I can predict their response!

We?d like to that Swanksalot for kindly sharing today?s photo via the Creative Common?s License.
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About Katie Anderson

Katie Anderson is a respected and successful broker at Sudler Sotheby's Realty as well as a certified appraiser. She specializes in representing clients who purchase and sell condominiums, town homes, single-family homes and income property in the Chicago land area. In her small amount time in the real estate game (she became an agent in 2003) she has assisted in excess of 400 deals and over $200 million in sales and continues to use her skills as a certified appraiser. Katie resides in Chicago's Bucktown neighborhood with her loving husband and 4-year-old-daughter, where she spends much of her spare time with her family and friends. You can contact her at katie@thechicago77.com or at andersonbraack.com

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5 Responses to “The New Parking Meters and The Chicago Economy”

  1. Thomas Westgard Says:

    You apparently belong to a social class that can afford to pay the higher costs, but I think you’re making some unfounded assumptions about the ability of everyone to do the same. Some people could barely afford to keep their cars at the earlier prices, and this colossal rate hike will cause some to jettison their cars entirely (some by not being able to pay the fees at the impound). Still others who could pay the increased amounts will choose other means of travel, like walking, biking, or the CTA.

    It’s not so clear to me that higher costs for driving are bad for the City of Chicago or the majority of its businesses. One tends to drive to big corporate stores that, on average, pay less in taxes and receive more in subsidies than small local stores. For example, if you have a car you’re far more likely to drive to a Dominick’s or a Target, often one located in the suburbs. But if you don’t have a car, you’re more likely to walk to a small, local grocery. That means the city gets more in taxes and overall pays less in subsidy costs (like the cost of maintaining that street you drove on to get to the suburban mall).

    What would make the story a bit more interesting and substantial would be an analysis of how much more this will cost, and a breakdown of how that will impact people who own cars today.

    Reply

  2. Steven Says:

    Higher costs of driving are most certainly bad for Chicago. People with cars tend to have more income and spend more than those that cannot afford them. Raise costs for the biggest spenders who happen to have the most mobility and they will go elsewhere. Thanks to the higher costs of parking (including on Sundays) and the higher Cook County sales tax, I no longer spend money in Chicago. I have not eaten weekend brunch in the city since last summer; I drive to Evanston. Almost all my shopping is done online now with Amazon and grocery shopping I do at Meijer in Indiana (no sales tax on food and gas that costs 50 cents less per gallon). The savings in gas alone pays for the trip, which with the mileage my car gets is less than round-trip fare on CTA. Just drive down any commercial street like Clark Street and you’ll see that the 1-2-3 punch of the recession, increased parking rates and increased sales tax has knocked a lot of businesses out of business. Empty storefronts and empty parking spaces. Drive a little further to Lincolnwood Towne Center, just over the city limits, and you’ll think it’s Saturday before Christmas.

    BTW the reason I don’t use parking meters any more hasn’t so much to do with the cost (though $1.25 an hour for Rogers Park is insane), but with the two hour time limit. I can’t do brunch or an afternoon of browsing in under two hours and I am certainly not a time watcher. The limit should be four hours.

    And please no one suggest CTA. I lived without a car in Chicago for 20 years. It never was very pleasant but now it is no longer possible. I got this car just last year and will never take public transit in this city again.

    Reply

  3. Bob S Says:

    Wow, how lazy are you? You decided not to buy your $3.00 latte at Starbucks because you had to walk half a block? I guess this meter deal has really put the hurt on over weight yuppies. What was the City thinking!

    Reply

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