Private parking contracting giving ‘privatization’ a bad name

In the past Market Urbanism has been lukewarm on parking “privatization” (Adam on Chicago and me on LA), but I’m becoming more and more convinced that it’s a bad idea. To start off with, these “privatizations” are actually private contracting schemes – the “owners” are barely even allowed to set their own prices, nevermind decide to use their land for, *gasp* something other than parking. The possible benefit from the market urbanism perspective is that they seem to be accompanied by the raising of parking prices, but the potential pitfalls are actually quite large. Yonah Freemark explains, in a commentary on NJ Transit’s plan to “privatize” its parking lots:

Moreover, the privatization of parking management prevents the agency from engaging in what is perhaps the most promising use of that resource: Redeveloping it into transit-oriented developments. In places like the San Francisco Bay Area, former transit parking lots have been successfully morphed into neighborhoods where people live in close proximity to public transportation and therefore use it frequently. Will the privatization deal make such projects impossible?

My only quibble with Yonah (and just about everybody) is that the market’s contribution to urbanism is maligned and neglected enough as it is – do we really have to associate yet another sprawl-inducing policy intervention with “privatization”? But beyond that, he’s got a point – rather than taking on entrenched suburban interests, we’re just adding another layer of government dependents, this time of the monied corporate variety (bidders include KKR, Morgan Stanley, Carlyle, and JP Morgan). The land on which transit parking lots sit is uniquely positioned to be converted into dense development, and the only thing worse than sitting on the land would be for the agencies to sign away their rights to change that within the foreseeable future.

The good news, however, is in the link he supplies: the number of transit agencies choosing to develop their parking lots appears to be higher than the number of those who are entrenching them with private contractors. The TODs that go up are considerably more managed and insider-dominated than I would like – few upzonings take place without a specific person in mind. But then again, even around the turn of the century, when private urban mass transit and development was at its pinnacle, corruption and favoritism dogged the deals.

  • Rhywun

    I’m reminded of the recent bus “privatization” scheme Mayor Bloomberg floated here in NYC on a couple unprofitable routes the MTA had cut. It was of course nothing of the sort, and its inevitable, sudden failure made the whole plot seem almost calculated to give the word “privatization” a bad name – at least to those of us of a cynical nature.

  • ant6n

    In which contexts does privatization have a good name? I tend to think of it as governments flogging the family silver.

  • Stephen

    Yeah, that’s a good point – you could argue that in fact it’s actually got a worse association than “deregulation,” where at least most economists can point to telecom, trucking, and airlines as examples of positive deregulation. With “privatization” the only unequivocally good one that’s coming to mind is Deutsche Post.

  • Adam

    British Telecom, Commonwealth Bank of Australia, Air Canada …

  • Rob Anderson

    “Other cities with older rail lines build before the transit-oriented development age, from Baltimore to Buffalo, should be looking to replicate San Francisco’s success in converting formerly useless land into vibrant neighborhoods. But getting the specifics right first could make all the difference.”

    None of the BART parking lot projects are in San Francisco itself. They are all in the East Bay. San Francisco has never had parking lots for BART commuters. Many people in the East Bay drive to BART parking lots for the same reasons people always drive to train stations: they don’t live close enough to the stations to walk to them.

  • Alon Levy

    The privatization of JNR was successful.

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  • Mark

    Managing parking is not the same as managing an airline or even a school– it’s pretty dead easy: get some good technology and set the price so there’s always a little availability. The whole privatizing parking is just a back door way of avoiding the politics of raising parking rates. It’s easier to hand it over to a private company with a contract and then the cash in hand rationalizes it all. People will complain about higher rates, but then it will be too late.

    If a city were really managing it’s parking well and they wanted some up front cash, all they’d need to do is bond the revenue stream. Why give up all the goodies to a private company?

    The easy way to deal with the politics is to earmark cash from parking to things people love– like street trees, clean sidewalks, better lighting, better transit etc and then really tout it as such.

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  • ant6n

    Successful in the sense that these companies make profit now.

    From that point of view privatizing CN was successful too – they are profitable now. But these profits don’t go back to who originally paid for all the assets — the taxpayers. Also, the taxpayers have lost control over the right of ways — so now we have to pay extra for passenger rail, towards some rail monopoly. And the original selling prize was probably too low, anyway. So, yeah, fogging the family silver.

    And with parking, it’s even more obvious — instead of just simply raising the parking rates and getting more money into the city coffers, they are being pissed away at like 1/10 the value (Chicago). Selling this land would even be worse; if the city ever wanted to get rid of the parking and add some transit, they couldn’t, or would have to buy back the land for big money.

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