Parking Meter Hell
| Thu Dec. 4, 2008 3:07 PM PST
PARKING METER HELL....One of the favorite topics of the urbanist bloc in the liberal blogosphere is the bane of cheap parking. Their complaint is that by underpricing the scarce resource of parking, we encourage the overuse of cars and discourage drivers from switching to mass transit. This could be (partially) addressed by charging market rates for parking, but how do we get cities to do this?
Answer: do what Chicago is doing and turn over your parking meters to the rapacious private sector:
At most meters, where a single quarter now buys 60 minutes, the charge will spike to $1 per hour. And by 2013, it will cost $2 an hour to park at those same spaces.
The most expensive spots downtown will increase from $3 an hour to $6.50 the next five years under a lease deal Mayor Richard Daley announced Tuesday.
Despite the rate hikes, Daley hailed the parking meter plan as an innovative approach to surviving the city's deepening budget woes. A private company has agreed to give City Hall an upfront payment of almost $1.2 billion to run Chicago's parking meter system for the next 75 years.
75 years seems a wee bit excessive to me, and will almost certainly bite Daley in the ass when Morgan Stanley, which put together the winning consortium, packages up the parking meter revenue, securitizes it, rolls it into an asset-backed CPMO (collateralized parking meter obligation), puts the super-senior tranche into an off-balance-sheet vehicle, hedges the rest via a CDS-backed synthetic CDO, and then resells the whole thing within 12 months to a sovereign wealth fund in Dubai for $5 billion.
(I'm joking. I think. But not about the 75-year part, which really is ridiculous. Chicago should do a shorter term deal for less money and then let it out for new bids in a decade or so. They're almost certainly paying a hefty discount to account for the fact that Morgan Stanley has no real idea what this revenue stream will be worth 75 years from now.)
This all comes via Barbara Kiviat, and the urbanist folks should also check out this dude, who is seriously pissed off at Daley's evident hatred for Chicago drivers and provides chapter and verse of Daley's malefactions. He may be incensed, but the urbanists will find plenty to like.
Continues Below
Continued From Above
Comments
Submitted by Crissa (not verified) on Thu Dec. 4, 2008 3:17 PM PST.
I don't think it'll work.
Because there are [i]empty lots[/i] in the middle of every downtown, with parking prices at [i]twice what the official parking[/i] costs, and yet people park in those lots instead of official lots.
Whenever I'm in SF, I know parking for the day can run over $20; so I only go with a car if we have two or more people (so that train fare would be equal... Two we often run the train as well, but one alone is always the train).
But the private-parking on one side of the street will run $25 while public parking or zoning-required parking will be half that across the street.
I don't think parking fees have any impact upon drivers. They don't even price compare their parking - why would it impact their driving?
They even have their own song. True. It's "The Lincoln Park Pirates".
And boy are you lucky not to be able to hear me sing it, too...
Singing way, hey, tow them awayThe Lincoln Park Pirates are weWhether Edsel or Chevy, no car is too heavyWe always collect our feeee....
Submitted by Crissa (not verified) on Thu Dec. 4, 2008 3:19 PM PST.
I might note the same is true in Seattle, Portland, San Francisco, San Jose, Austin... Any large city I've driven in.
Well, aside from sprawls like outer LA and inner Phoenix, they just seem to have parking up the wazoo.
Everyone is focusing on the increased meter rates which are indeed high but the far bigger issue in my mind is the trading of decades of cash flow in order to address three or four years of budget problems. These deals (not just this one) are toxic for the future finances of Chicago and others who create them.
http://treylaura.blogspot.com/2008/12/these-privatization-programs-are-i...
There's an obvious solution here for commuters: ride the bus. My annual bus pass went up this year, but it's still only $250. That's still less than parking fees alone. You lose some flexibility, but you can read a book during the ride. And you don't have to deal with the stress of driving.
Sounds like a disgusting and regressive tax hike to me.
Let's get all the poor people on the bus and that will make the city that much nicer for us rich folk. Special toll roads on the freeways and easy parking to boot!
Regressive taxes to make the yuppies feel that much better about themselves, how sweet!
What trey said.
Also, there are cases where providing additional parking near train stations and whatnot can increase the use of mass transit. For example, here on Long Island there is often inadequate parking near the LIRR (commuter railroad) stations. Driving a few miles to the train station then taking the train the remaining distance to the city is better than driving all the way (and once in the city you can take the subway instead of your car).
Submitted by IdahoEv (not verified) on Thu Dec. 4, 2008 4:14 PM PST.
75 YEARS? 75 YEARS?
Nobody has any idea what those meters will be worth 20 years from now - for all we know that company could be getting $3bil/year out of their parking monopoly by then, and have another 55 years to look forward to.
Seriously, sell it in 5 year chunks or something. A new auction every 5 years.
Government, like business, is notorious for shortsighted planning, but this has to be the most ridiculous I've heard.
I can see it now. The city will want to remove parking on some street to open up a lane to relieve traffic, and this company will sue them for loss of revenue. Every road change will get stuck in court for years. Fun fun.
... also, if raising the rates is really what's needed (and it may well be for all I know), couldn't the city just do that itself? Wouldn't that address the budget shortfall without creating a three-quarter-century monopoly?
Everyone is focusing on the increased meter rates which are indeed high but the far bigger issue in my mind is the trading of decades of cash flow in order to address three or four years of budget problems.
I agree. Arnold did that with lottery money, right? Out here, Spy Cam Jan is hoping to do the same thing with lottery money. Fix up a one time budget deficit by selling decades of lottery income.
Submitted by Chris Brown (not verified) on Thu Dec. 4, 2008 4:44 PM PST.
Trey is correct.
What hasn't been noted, though, is that given the Davis-Bacon Act (and perhaps an IL Davis-Bacon Jr.) the city could raise the parking rates to a commensurate level while administering the program at less cost than can a contractor.
I can't wait to read that Mayor Daley has some improper interest in the contract. It is Chicago, after all.
providing additional parking near train stations and whatnot can increase the use of mass transit
Assuming you can get that additional parking built. Transit parking is not popular in some towns -- people from other towns come to park in it, it takes parking from local businesses, overflow (which is common) ends up in neighborhoods, etc.
Submitted by Ninerdave (not verified) on Thu Dec. 4, 2008 5:24 PM PST.
I have a problem with cities selling off assets for short term gain. While they'll get a big payday now, and be able to close their current budget hole, they've now given up a stream of revenue for 75 years. What happens when they fall short in the future?
Just seems so stupid and short sighted to me.
That big money for City Hall has meant higher costs for the public. Under private operators, it costs 50 percent more to drive on the Skyway and almost 40 percent more to leave your car for an hour at Millennium Park's garage.
Fascinating. Over the years conservatives have trumpeted that private enterprise can do things better and cheaper than government. But here we have a good counter-example: when private enterprise took something over the cost goes up significantly. It will be interesting to see if service continues at the same level, improves, or declines. My bet is decline.
The prime purpose of private enterprise is to generate a profit thus there is always a built-in additional cost to anything from private enterprise.
So the city of Chicago gets up front cash but loses control of streams of revenue. 75 years is a long time to spread the money from the payment over, longer than the current office-holders will live, so what incentive do they have to restrain their spending?
So many angles to discuss. So much irresponsibility.
nerd: Over the years conservatives have trumpeted that private enterprise can do things better and cheaper than government.
Private enterprise can do things better and cheaper than government, when there's competition. Wingnuts seem to forget that not all situations lend themselves to vigorous competition.
Like so many things, corrupted by decades of unsustainable fantasy promotion(Hey, it sells) and market omniscience delusions, it will take decades to resolve. The curse/blessing of our prosperity has lead us, individually and as a country, to defy common sense. Experts be damned, CS is generally right because it considers more than the data generated by focused studies.
About a hundred years ago the city of Philadelphia gave up its right to regulate natural-gas prices for 70 years, in return for a small annual payment from the gas companies.
It was such a scandal that the whole deal had to be revoked in just a few years.
When a government grants a monopoly that fleeces citizens, does it really matter whether what they're paying is called a tax or is called a fee? Those who opposed the Tea Act said it didn't.
They were right. That's what Philadelphians understood a hundred years ago, and Daley apparently does not.
Yeah, what John said. I don't have a car, or a TV, and I use only natural tampons and eat only vegan tofu and wear only cottons. I won't bring children into this world, and I refuse to oppress women so I only sleep with 18-19 year olds.
My guru says you guys are all assholes.
From someone who lived in Chicago for 10 years:
1) turning all parking meters over to some rapacious private firm that will charge outrageous prices for 75 years? sounds like the way Mayor Daley usually does business in Chicago. No shocker there--I love the city, but come on, everyone knows the reputation for corruption.
2) just one more reason not to have a car in Chicago--I never did the entire time I lived there and I was happy about it and got along on public transportation and walking fine--stayed in great shape too. Back then, it was simply the ever-present specter of having your car stolen and stripped, getting it totalled in some ridiculous accident with insane uninsured drivers, having it break down from the relentless toll of the winter weather, etc, etc. Parking was actually far down on the list of things that would keep one from owning a car . . . I suppose this move would put it higher, but Chicago is a great city cause you don't need a car there . . . I only started driving when I moved to OC CA and never really felt like I was better for it.
Besides rapacious parking fees, I'm sure you can expect abuses related to towing (you know, where your car disappears and when you track it down you have to take a cab to the wrong side of town and pay $200 cash to get it back). Chicago is already such a nightmare to drive in with a car, what with toll booths every mile of every highway. $40 in change disappears so fast there.
A few comments and a question:
1. this only affects street parking meters, which aren't used by commuters, since they have a 2 hour time limit. Car commuters use monthly-pay lots that are already privately owned.
2. Private parking lots will still be more expensive than meters, the cost to park your car in a lot downtown is about $30-40 now. Monthly commuters can get a discounted rate of about $20 per day. So this will have zero effect on people's decision to commute by car.
Question: couldn't the city just have issued bonds or gotten a loan secured by the parking meter revenue? This is the way businesses secure future income streams, couldn't the city have done the same, or is the credit market stopping that?
Submitted by Robert Waldmann (not verified) on Fri Dec. 5, 2008 8:05 AM PST.
Of course you're joking. Obviously, you keep the super senior tranche on balance sheet and put the lowest quality AAA tranche in the SPE.
By the way, I found out what a super senior tranche was when Felix Salmon answered your question.
In general I like a lot of what the MN state government does but it has made a few huge mistakes. Both of the mistakes I see were in granting contracts (or treaties) with a time span of forever.
Seventy five years is better than 'forever' but not that much better. Five or ten years is a much better time span. Otherwise in real life 'forever' just means a lawsuit in the future and then some court has to step in and I don't see how that is good for anyone.
How long before parking meters have a mag-stripe reader that bills a credit card? At a dollar an hour, who has that much change in a pay by plastic commercial environment?
Posted by: Patriot on 12/05/08 at 10:44 AM Respond
This technology is already in use in Miami, where parking is $1.50/hr or more (which now doesn't sound all that bad I guess).
The full cost of parking should be borne by the car's driver. However, providing a public monopoly to a private enterprise will ensure that automobile drivers will pay more than the full cost to park.
Another issue that the citizens of Chicago may want to consider is very little of that $1.2B will be made available to increase the living standards of their city.
First they came for the drivers and we were quiet and somewhat gleeful in their pain.
Then they sold off the CTA, the L ridership lost their lunch money, and those of us living downtown were smug.
Then they converted the sidewalks to tollwalks . . .
Anonymous,
However, providing a public monopoly to a private enterprise will ensure that you are stuck with Charter cable forever.
I agree with your point, I'm just adding another example.
I also support your decision of anonymity but would you consider a unique anonymous handle so we can differentiate the different anonymous people during a discussion?
Submitted by Eric Ferguson (not verified) on Fri Dec. 5, 2008 9:46 AM PST.
Susan has it right. The issue here isn't the cost of parking, it's the privatization of public resources. Didn't Chicago sell off one of its newer roads?
The Raleigh city council voted earlier this week to take control of parking away from a private company. The council was acting on recommendations from a task force that advised bringing parking enforcement back in house and put meters on all downtown street parking.
Good on Chicago but 75 years? That's a long time, and who says the company will still be in business in 75 years.
They put about 2,000 more parking meters in the city of Providence. One nice thing is instead of putting meters they put kiosks. Slide your credit card, you get a slip to put in your window and you're off.
However our public transit system is in a word, a joke. It's funded by the gasoline tax. And when people buy less gasoline revenues for transit collapse. And with the latest run up in diesel prices, RIPTA has been forced to curtail service even though demand for service is higher than it has ever been.
In Portland, OR the parking meters are already at $1.25 per hour. We pay using a credit card and put a paid sticker in a window. The upside is you can move to another parking spot with out paying more if you have time on your sticker. The downside, no free time when someone leaves time on the parking meter.
I do not go downtown unless I have no choice.
How long before parking meters have a mag-stripe reader that bills a credit card? At a dollar an hour, who has that much change in a pay by plastic commercial environment?
Posted by: Patriot on 12/05/08 at 10:44 AM Respond
-------
This technology is already in use in Miami, where parking is $1.50/hr or more (which now doesn't sound all that bad I guess).
Posted by: anon on 12/05/08 at 11:22 AM Respond
-----
In Portland, OR the parking meters are already at $1.25 per hour. We pay using a credit card and put a paid sticker in a window. The upside is you can move to another parking spot with out paying more if you have time on your sticker. The downside, no free time when someone leaves time on the parking meter.
I do not go downtown unless I have no choice.
Posted by: Larry on 12/05/08 at 6:34 PM Respond
-----********------
I live in Chicago, and we already have the 'pay at the box and put a sticker in your car window' thing here, you can use a credit card. They will probably have to replace all meters with these or get all of the new individual meters to swipe credit cards too...
Now this country (Australia)
doesn't have "Private" parking meters.They are all revenue earners for the city council.
Well not where I live, there aren't any meters. period.
I find it crazy that a service that is efficiently run at a profit is then thought of being a good item to sell so that the revenue is lost for ever to a private group. I wonder who does the bribing and who is the bribed in this transaction?
Private Enterprise is more efficient and competition is the decider.Capitalist and Private is better than the alternative.
Like Banks and Motor Vehicle Manufacturing? Subsidized Farming.Air lines collapsing.Oh Hum.
Privatizing the military is well on its way at what cost?
Integrity.
Submitted by s9 (not verified) on Sat Dec. 6, 2008 8:18 AM PST.
"Answer: do what Chicago is doing and turn over your parking meters to the rapacious private sector:
At most meters, where a single quarter now buys 60 minutes, the charge will spike to $1 per hour."
Or, you could do what San Francisco, the City That Knows How, does... we kept the meters municipalized, but a quarter only buys you ten minutes in most places. Rates vary around town.
Oh, and we have crazy innovation in payment systems, too. You can pay with your cell phone.
At first glance this sounds like a good deal for Chicago.Truth of the matter is this is a give-away to private business and a loser for the city.The money will be gone in five years with the most sunny outlook.When the money is gone so is the revenue from parking.Did anybody at city hall consider this?Why didn't the city raise parking rates themselves?Hopefully this will be a loser for the corporation running the meters.They will raise the rates so high it will encourage millions to ride the train or take a bus to work.
