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.