Chicago Privatizes Parking Meters

Of course, Chicago is just privatizing the revenue from meters, not the actual parking spaces. Plus, the city will regulate rate increases, but it’s a step in the right direction. (right?)

For today’s politicians, this is a great way to get windfalls of money today for revenues of future generations in order to mask their fiscal irresponsibility. I think we’ll see more of this during the current mess as other municipalities catch on.

Ideally, cities should auction off the spaces (including the land), with no regulations on rates or use of the land. Let market mechanisms determine the highest-and-best use of the spaces and land.

Chicago Tribune: Most city parking meters to cost $1 an hour [Hat Tip: reader, Dan M]

City Hall officials said that after the first five years of the 75-year parking meter lease, rate hikes will be subject to approval by alderman and are expected to be at the rate of inflation.

The $1.1 billion to city coffers will come from Chicago Parking Meter LLC, which is made up of two Morgan Stanley infrastructure funds.

The Daley administration said $400 million will go into a long-term reserve, $325 million will be spent in city budgets through 2012 and $100 million is earmarked for programs helping low-income people. An additional $324 million is headed toward a fund city officials said “may be used to help bridge the period until the nation’s economy begins to grow again.”

and a video:

  • http://urbanmilwaukee.com/ Dave Reid

    I’m not sure this is such a great idea. It seems to me the better practice would be for the city to market price the parking and use that funding to do street improvements in the districts the revenue was generated from.

  • http://urbanmilwaukee.com/ Dave Reid

    I’m not sure this is such a great idea. It seems to me the better practice would be for the city to market price the parking and use that funding to do street improvements in the districts the revenue was generated from.

  • http://urbanmilwaukee.com/ Dave Reid

    I’m not sure this is such a great idea. It seems to me the better practice would be for the city to market price the parking and use that funding to do street improvements in the districts the revenue was generated from.

  • http://urbanmilwaukee.com/ Dave Reid

    I’m not sure this is such a great idea. It seems to me the better practice would be for the city to market price the parking and use that funding to do street improvements in the districts the revenue was generated from.

  • http://urbanmilwaukee.com Dave Reid

    I’m not sure this is such a great idea. It seems to me the better practice would be for the city to market price the parking and use that funding to do street improvements in the districts the revenue was generated from.

  • http://mathieuhelie.wordpress.com/ mhelie

    I disagree that the city should sell the land for parking spaces. It would make as little sense as selling the land for street lighting. The city is a marketplace, and there are some structures that must belong to the place instead of the market.

    I think the better question to ask is, must the place as a whole be owned by governments, or can it itself be part of a market operating at a different scale (a market of markets), like the stock exchange market?

    I’ve written it up in this article: http://mathieuhelie.wordpress.com/2008/11/30/producing-land-with-nested-markets/

  • http://mathieuhelie.wordpress.com mhelie

    I disagree that the city should sell the land for parking spaces. It would make as little sense as selling the land for street lighting. The city is a marketplace, and there are some structures that must belong to the place instead of the market.

    I think the better question to ask is, must the place as a whole be owned by governments, or can it itself be part of a market operating at a different scale (a market of markets), like the stock exchange market?

    I’ve written it up in this article: http://mathieuhelie.wordpress.com/2008/11/30/producing-land-with-nested-markets/

  • http://marketurbanism.com MarketUrbanism

    I’d say that is a reasonable solution, as long as it is through some local entity, and doesn’t get jumbled up into a bunch of bureaucracy and pilfering. There would have to be some well thought out checks and balances.

  • http://marketurbanism.com Market Urbanism

    I’d say that is a reasonable solution, as long as it is through some local entity, and doesn’t get jumbled up into a bunch of bureaucracy and pilfering. There would have to be some well thought out checks and balances.

  • http://marketurbanism.com MarketUrbanism

    I disagree that the city should sell the land for parking spaces. It would make as little sense as selling the land for street lighting. The city is a marketplace, and there are some structures that must belong to the place instead of the market.

    I see what you mean, but without a market, how does the place decide whether parking is, in fact, the best use for each piece of land? (maybe a market within a market like you suggest?)

    I consider individual ownership (or ability to be owned individually or collectively by choice) of each space as the best way for an efficient bottom-up solution to emerge.

  • http://marketurbanism.com MarketUrbanism

    I disagree that the city should sell the land for parking spaces. It would make as little sense as selling the land for street lighting. The city is a marketplace, and there are some structures that must belong to the place instead of the market.

    I see what you mean, but without a market, how does the place decide whether parking is, in fact, the best use for each piece of land? (maybe a market within a market like you suggest?)

    I consider individual ownership (or ability to be owned individually or collectively by choice) of each space as the best way for an efficient bottom-up solution to emerge.

  • http://marketurbanism.com Market Urbanism

    I disagree that the city should sell the land for parking spaces. It would make as little sense as selling the land for street lighting. The city is a marketplace, and there are some structures that must belong to the place instead of the market.

    I see what you mean, but without a market, how does the place decide whether parking is, in fact, the best use for each piece of land? (maybe a market within a market like you suggest?)

    I consider individual ownership (or ability to be owned individually or collectively by choice) of each space as the best way for an efficient bottom-up solution to emerge.

  • Benjamin Hemric

    I think government should protect the marketplace (e.g., keep the playing field level) and avoid allowing itself to become too involved in the marketplace as an active player (which is what seems to me to be happening here to some degree). So my tentative feeling is that this is not a step in the right direction (especially given that this is such a long — 75-year! — lease).

    While Jane Jacobs’ remarkable book, “Systems of Survival,” may not really speak to this issue directly, it does seem to me to shed some indirect light on it nevertheless. In the book, she talks about how government and commerce have developed separate ethical systems and how ethical problems are generated when the ethical system appropriate to government (the Guardian Syndrome) is inappropriately mixed-up with the ethical system appropriate to commerce (the Commercial Syndrome) -– problems that can easily arise when government gets too involved in the marketplace (e.g., urban renewal, etc.). However, the general lesson to be learned, so it seems to me, is that government should stick to being government and be very careful to leave commerce to the private sector.

  • Benjamin Hemric

    I think government should protect the marketplace (e.g., keep the playing field level) and avoid allowing itself to become too involved in the marketplace as an active player (which is what seems to me to be happening here to some degree). So my tentative feeling is that this is not a step in the right direction (especially given that this is such a long — 75-year! — lease).

    While Jane Jacobs’ remarkable book, “Systems of Survival,” may not really speak to this issue directly, it does seem to me to shed some indirect light on it nevertheless. In the book, she talks about how government and commerce have developed separate ethical systems and how ethical problems are generated when the ethical system appropriate to government (the Guardian Syndrome) is inappropriately mixed-up with the ethical system appropriate to commerce (the Commercial Syndrome) -– problems that can easily arise when government gets too involved in the marketplace (e.g., urban renewal, etc.). However, the general lesson to be learned, so it seems to me, is that government should stick to being government and be very careful to leave commerce to the private sector.

  • Benjamin Hemric

    I think government should protect the marketplace (e.g., keep the playing field level) and avoid allowing itself to become too involved in the marketplace as an active player (which is what seems to me to be happening here to some degree). So my tentative feeling is that this is not a step in the right direction (especially given that this is such a long — 75-year! — lease).

    While Jane Jacobs’ remarkable book, “Systems of Survival,” may not really speak to this issue directly, it does seem to me to shed some indirect light on it nevertheless. In the book, she talks about how government and commerce have developed separate ethical systems and how ethical problems are generated when the ethical system appropriate to government (the Guardian Syndrome) is inappropriately mixed-up with the ethical system appropriate to commerce (the Commercial Syndrome) -– problems that can easily arise when government gets too involved in the marketplace (e.g., urban renewal, etc.). However, the general lesson to be learned, so it seems to me, is that government should stick to being government and be very careful to leave commerce to the private sector.

  • http://mathieuhelie.wordpress.com/ mhelie

    The place is competing with other places in the market for marketplaces.

    How does a lifestyle center decide how much space to allocate to on-street parking? It does so in competition with other shopping places.

  • http://mathieuhelie.wordpress.com mhelie

    The place is competing with other places in the market for marketplaces.

    How does a lifestyle center decide how much space to allocate to on-street parking? It does so in competition with other shopping places.

  • http://marketurbanism.com MarketUrbanism

    Good point.

    An association, BID, or could be formed to accomplish that if roads and parking were privatized. Places would likely consolidate to compete with other places like shopping centers do. This would enable the entities to internalize externalities as shopping centers do.

  • http://marketurbanism.com MarketUrbanism

    Good point.

    An association, BID, or could be formed to accomplish that if roads and parking were privatized. Places would likely consolidate to compete with other places like shopping centers do. This would enable the entities to internalize externalities as shopping centers do.

  • http://marketurbanism.com MarketUrbanism

    Good point.

    An association, BID, or could be formed to accomplish that if roads and parking were privatized. Places would likely consolidate to compete with other places like shopping centers do. This would enable the entities to internalize externalities as shopping centers do.

  • http://marketurbanism.com Market Urbanism

    Good point.

    An association, BID, or could be formed to accomplish that if roads and parking were privatized. Places would likely consolidate to compete with other places like shopping centers do. This would enable the entities to internalize externalities as shopping centers do.

  • http://mathieuhelie.wordpress.com/ mhelie

    You don’t need to create such an association, or BID, or some such. The city as a whole already is a marketplace.

  • http://mathieuhelie.wordpress.com mhelie

    You don’t need to create such an association, or BID, or some such. The city as a whole already is a marketplace.

  • http://marketurbanism.com MarketUrbanism

    Yes. However, I see most cities as too large an entity to properly account for the value added or lost by its micro-level decisions. This is why I think Dave Reid’s suggestion would be reasonable, if done at a more local level.

    Otherwise, local knowledge is not properly dispersed in a way that would benefit each local place.

  • http://marketurbanism.com Market Urbanism

    Yes. However, I see most cities as too large an entity to properly account for the value added or lost by its micro-level decisions. This is why I think Dave Reid’s suggestion would be reasonable, if done at a more local level.

    Otherwise, local knowledge is not properly dispersed in a way that would benefit each local place.