Officials are calling the parking spaces the "Fayetteville Zone."
There are nearly 200 pay stations installed downtown. Raleigh Mayor Charles Meeker says making everyone pay $1 per hour will drive people who work downtown into off-street garages and in turn benefit businesses.
"The goal is to have spaces available on the street for people who are coming downtown to shop or eat in restaurants," Meeker said. "That's the purpose of the metered parking."
Some shoppers and merchants don't like the idea.
"I think it's a bad decision, especially now the way the economy is for shops like this," one business owner told ABC11 Eyewitness News.
The City of Raleigh says 63 percent more parking tickets are likely.
Before today, so many people parked for free on the street and avoided paying to park in garages, causing the city to lose million in parking deck fees.
The new system also ends free parking for the handicapped. Merchants have complained that scammers are abusing the free parking privilege.
Mayor Meeker hopes the changes help downtown business, but only time will tell.