Construction, ride-sharing doom Chicago parking lots

Parking lots are disappearing in Chicago:

Big increases in condominium sale prices and apartment rents have pushed up the value of well-located land, Lev said. At the same time, revenue has decreased as much as 30 percent in some parking lots his firm owns. “Many downtown garages are not doing the kind of business they used to, which is indicative of ride-sharing and not as many people owning cars,” Lev said.

The lowly surface lot will play a role in reshaping Chicago’s skyline, with plans for two of the city’s tallest buildings in the works on parcels now used for parking…

U.S. parking needs will be cut in half during the next three decades, the Newport Beach, Calif.-based real estate research firm projects. Widespread adoption of ride-hailing and self-driving cars will eliminate the need for swaths of parking spaces — enough that the square footage of the unneeded spaces will be more than the cumulative size of every currently existing apartment, office, shopping mall, retail strip center and warehouse property in the U.S., according to the Green Street report.

Dwindling car ownership could have a major impact on land use and urban planning in the coming decades. It’s already affecting the way new towers are designed. Towers built over parking lots often include spaces within the new structure.

Americans may like driving and owning cars but a decrease in the number of vehicles could influence many areas of American life. Parking lots may just be one domino in a chain of cultural phenomena that will slowly fall if driving patterns change significantly.

Or, perhaps this change in parking could be seen as a necessary correction to having too much parking supply in the past. Some have argued American parking has been too cheap for too long as it encourages driving. This reminds me of two past phenomena. First, communities had battles over free parking and parking meters as customers came to expect plentiful free parking at shopping malls. Second, you can find plenty of images of Chicago in the mid-twentieth century where parking is prominently displayed even as the city was booming. For example, Grant Park was an important area for parking (and still is – it is just better hidden underground).

Additionally, holding on to urban parking lots could be a lucrative investment strategy. In the short run, an owner and/or operator could collect parking fees. In the long run, they could wait until the price of land increased dramatically and then convert a humble parking lot or structure into an expensive development. These urban surface parking lots are rarely meant to be there forever.

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