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Parking Privatization

Lessons from Chicago: What Could Happen to Parking in L.A.


Thus far, the discussion on how to, and whether to move
forward with a plan to privatize the city’s metered street parking has focused
on what impact a similar plan has had in Chicago.  The final deal between the Windy City and Morgan
Stanley netted Chicago $1.16 billion up front, for turning over parking
revenue, enforcement, collection and maintenance for the next 75 years.

The biggest complaint that a privatization plan has is that
such a plan almost always costs residents money in the long-run as the companies
who sign the contract recoup their investment and then make millions or even
billions over the course of the contract. 
That’s a big price tag to plug a budget hole and outsource the political
will to raise parking costs. 

The Chicago Tribune estimates that if Chicago pols had shown
the guts to just raise parking fees at the same rates as Morgan Stanley, that
the city would have brought in $1.5 billion over the life of the contract, over
$300 million more than the initial payment the city received.

And, those rate hikes were pretty steep, all things
considered.  Assuming that Los Angeles
follows the same model as Chicago, the first thing Angelenos are going to have
to accept is that the cost of parking on the street is going to go up by a lot,
and go up quickly.  Following their
agreement with Morgan Stanley, the city outlined a series of rate hikes that
will soon give Chicago the priciest street parking in all of America. 

While the impact of increased street parking is generally
good news for reformers, increased rates have historically led to less driving,
the Chicago model put none of the upfront money towards transportation
projects.  In short, they raised the cost
of car driving, but did nothing to make other options more attractive.  Originally, Chicago tried to sell the
privatization scheme to residents by promising better bus and Bus Rapid Transit
service.  Somehow that part of the deal
got lost in the paperwork.

So how will that $1.16 billion be spent?  The website Progressive States explains:

The city plans to use $325 million from thedeal to balance the budget through 2012 and to set aside $400 millionfor the long-term.  $100 million will be spent on social programs, andthe rest will be used to stabilize the city's financial situation untilthe economy improves.

The cost of parking “in the loop” would go up to
twenty-eight quarters for two hours, or $7 in layman’s terms.  This has led more than one local paper to
worry that the meters won’t be able to function for long.  Also, the deal abolished “parking meter

As could be expected, there have been some glitches in the
implementation of the program.  Some
reformers are complaining that it’s been impossible to trace how the $1.16
billion the city has received and the city government has been less than

According to Arline Welty of the Active Transportation
Alliance, the privatized parking has also been an issue for cyclists.  Because most of the parking meters have been
replaced by what L.A. has called “meterless parking” there is suddenly a
shortage of bike parking city-wide.  To
make things worse,  Chicago actually decided where to place bike racks based
on the availability to meters.  The ATA
is now working with the city to try and fix the new bike parking shortage.

Much of the information in this story was based on “Chicago
Outsources Parking Reform to Morgan Stanley
” by John Kaehny which appeared on
Streetsblog on December 12, 2008.

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