Chapel Street to shut 350 car parks in parking shake-up

Chapel Street is set for a parking shake-up with council voting to shut more than 350 car spots in the heart of the precinct while extending one-hour free parking near Prahran Market.

Stonnington councillors voted to close the roof of the Elizabeth Street Car Park next to Prahran Market, which has 257 spots, and the roof of the King Street Car Park near Prahran Town Hall, which has 99 spots.

The remaining 373 spaces within the Elizabeth Street Car Park will be reserved for retail customers only, with one-hour free parking available across the day, no minimum spend for validated parking and operating hours reduced to between 5am and 9pm.

The roofs will be shut over the next eight weeks, while there are no plans to change existing free parking along Chapel Street.

Councillors endorsed the changes on Monday night citing the municipality’s rising tax bill due to the extension of the state government’s congestion levy which applies to parking spots, which would cost the council $4.1 million a year under existing arrangements.

The council claims there will be “no material impact” on parking availability as internal figures show the two impacted parking complexes are on average just over one-third full, while the $64 million Prahran Square Car Park could cope with extra cars during peak periods as it is on average 48 per cent full.

Prahran Market trader and Stonnington resident Wendy Ali-Akil is relieved one-hour free parking will be extended throughout the day for market customers but is also disappointed hundreds of car parks will be lost in the Chapel Street precinct.

“To be taking away any car spaces in the Prahran area just seems like a very short-sighted result for residents, traders and visitors to the area,” the founder of Stir The Pot food store said.

Ali-Akil is concerned existing parking rates deter shoppers from visiting Prahran Market, with parking currently costing $4.20 for visits of up to 30 minutes, $10.50 for one to two hours and $18 for three to four hours.

She hopes more will be done to entice back locals who load up their cars with groceries at other markets, including nearby South Melbourne Market, which offers two hours free parking on weekdays and entries before 10am on weekends.

“If the Elizabeth Street Car Park is only at one-third capacity, there’s a reason for that. It’s the prices – and I don’t agree with the state government levy, I think it’s a cash grab – but the prices are keeping people away from the car park, keeping people away from the area,” she said.

She hoped council would consider offering discounted parking to traders and their staff, particularly as many workers arrive in the dark before the market’s doors open at 7am. Currently, workers can apply for reduced monthly permits which work out about $100 a week in parking costs.

The congestion levy is a fee charged by the State Revenue Office to all public and private off-street parking in designated inner-city areas and is designed to encourage more public transport use, with the fee expanding into parts of Stonnington as of January 2026.

The council has received advice the Elizabeth Street Car Park will be eligible for a 50 per cent levy discount under the changes, which includes extra security.

Stonnington Mayor Melina Sehr said the council voted to shut the car spots across the two complexes as they were underutilised.

“Why would we pay a tax on them on a daily basis when they’re not being used? That’s just throwing ratepayer money away,” Sehr said.

“There’s nothing to be alarmed about, there’s no changes to parking arrangements apart from closing off car parks that no one’s using.”

Both roofs will be empty until at least after Christmas, with the council initially considering renting out the spaces but instead deciding to monitor demand and consider opening up the car parks during the festive period if needed.

Associate Professor Alexa Delbosc from Monash University’s Institute of Transport Studies said Stonnington was in a “uniquely difficult situation to cope” with the congestion levy as it is one of the few inner-city councils that does not have paid spots on major roads like Chapel Street, but does charge people to use off-street car parks.

“Even without the congestion charge you still had to pay more to park in the multi-storey car parks. Why would you do that if you could just drive around and around and around looking for a free parking space?” she said.

“Best practice in parking demand in busy places is for the on-street parking to be more expensive than the off-street parking.”

Delbosc doubted the council would ever consider charging for on-street parking as it could impact businesses, although the arrangement is in operation in many other inner-city spots.

“For some reason, on Chapel Street, on Toorak Road, it’s free. It’s very hard to start charging for something you used to give away for free but other councils have done it.”

Delbosc said she would not be surprised if the congestion levy continues to expand across Melbourne as the population grows and density increases through designated activity centres near public transport where development is encouraged.

Parking remains one of the most controversial issues in Stonnington and other councils, with the introduction of paid on-street parking for residents and digital permits sparking major backlash.

In 2015, the battle over paid parking metres in Yarraville erupted into a violent brawl, with a 61-year-old man charged after two councillors were assaulted.

A Victorian government spokesperson said council car parking decisions are a matter for local government not the state, and the congestion levy has applied to inner-Melbourne car parks for almost two decades.

“Labor backs our high street traders, that’s why we introduced a 50 per cent parking concession for retail precincts just this year,” they said.

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