Skip to Content
Streetsblog New York City home
Streetsblog New York City home
Log In

Chicago Pays the Price for Parking Privatization

11:03 AM EDT on June 17, 2009

It appears Chicago politicians who privatized city parking meter operations traded short-term political gain for long-term fiscal pain.

faillong.jpgPhoto: Best Recession Ever

Chicago may have left as much as $974 million on the table under the terms of last year's agreement with Morgan Stanley. A June report from the city inspector general [PDF] blasted the deal for being rushed, secretive and vastly too expensive for taxpayers. The report's revelations incensed motorists already antagonized by a ragged roll-out of meter rate hikes.

All in all, it wasn't the money for nothing bargain the City Council seemed to think it was back in December when Morgan Stanley handed over a check for $1.157 billion. This manna from Wall Street plugged the city's gaping budget hole and allowed the council to avoid painful tax hikes and service cuts. It also enticed lawmakers in Los Angeles and Philadelphia, where officials were considering their own parking privatization deals.

In return for the upfront cash, Chicago leased its 36,000 parking meters for the next 75 years to the Morgan-led consortium, and granted it the authority to double and triple meter rates. By 2013 downtown meters are slated to double to $6 per hour; neighborhood meter rates are to double to $2 per hour.

The deal was pushed hard by Mayor Richard Daley. The core of his privatization argument was that Chicago lacked the political will to raise meter rates and that desperate fiscal times demanded unlocking the value of public parking. He noted that city meters were only generating about $20 million a year, and because of neighborhood resistance, meter prices hadn't gone up in 20 years. His conclusion was that Chicago had to outsource the political will to raise meter rates.

However, the inspector general's report concludes that, "If Chicago were to keep control of the parking-meter system and operate it under the same terms as the private company, the system would be worth approximately $2.13 billion (in present dollars)," or $974 million more than the city received. Ironically, another cost of Chicago parking privatization was that it
quashed a number of neighborhood-supported parking improvement
districts, in which higher meter fees were to be invested in local
pedestrian, bicycle and transit improvements.

While public-private partnerships can be appealing because they require motorists to pay more of the actual cost of driving, are these deals really the only way to overcome political resistance to higher motoring fees?

Stay in touch

Sign up for our free newsletter

More from Streetsblog New York City

Community Board Backs DOT Road Diet for Brooklyn’s Deadly Third Av.

“This is just a beginning of what we could do to fix our community,” said one board member. “This is not done, this is not where we finish off.”

February 23, 2024

Friday’s Headlines: More Lunch Consumption Edition

Streettilms goes to Paris. Plus more news.

February 23, 2024

Advocates Slam Albany Pols for Using Transit Fund to Encourage Driving

Gov. Hochul and state legislators in Albany are misspending millions of dollars on toll rebates for drivers while showing zero interest actual bus or rail ideas, transit advocates charged.

February 23, 2024

Serious Crash in Greenpoint Again Reveals Flaws in City Design, Enforcement Against Reckless Drivers

A woman was seriously injured — and is clinging to life — because a driver with a long record of recklessness slammed into her on a Greenpoint Street as she came home with milk.

February 22, 2024

POWER PLAY: City Moves to Put Thousands More E-Car Chargers on the Sidewalk

We should stop and think before giving over curbside space to car drivers, a mistake the city made in the 1950s.

February 22, 2024
See all posts