The Windy City has won the parking lottery — It now has the highest on street rates in North America with $6.50 an hour in its fabled ‘loop’ area. It is followed by San Francisco ($5.50/hr) New York ($5/hr), Los Angeles ($5/hr), and Seattle ($4/hr) based on research by The Expired Meter.
Just five short years ago, Chicago’s rate was 25 cents an hour. So what happened?
Well, Chicago Parking Meters, LLC happened. The city leased its parking meters to a private firm and as part of the lease, the firm was authorized to raise rates. This is the last mandated raise, however it will increase in the future based on inflation.
This experience tells us something. Raising parking rates is politically unpopular. The aldermen in Chicago were unable to raise the rates, at least if they wanted to keep their jobs. So they sidestepped the situation and basically sold the meters to a private firm for a billion dollars. The onus now falls on CPM LLC and the local government gets away Scott free.
I have been suspicious of these deals. If government gets money, they spend it. In Chicago’s case, the billion was gone after the first year, mostly to pay off previous incurred debts. Now the money that flows in from the streets of that Toddling town goes into the pockets of the bankers who came up with the billion in the first place.
You won’t find any criticism of CPM LLC here. They are business people who cut a good deal. They are also working hard to give Chicago a better parking system, and probably will. However we could learn from other Public Private Partnerships like the one in Indianapolis. There the money is coming in drips and drabs, (they did get a healthy up front payment) and it is earmarked for infrastructure improvements. As the money comes in, streets get repaired, sidewalks are fixed, street lamps replaced. In Chicago, not so much.
Which brings us back to hiking rates from 25 cents an hour to $6.50 in five years. Had the city over the years raised rates a bit at a time. say 25 cents a year over 20 years, they would have been close to their current number, but like the frog in the boiling water, the citizens wouldn’t have felt the pain and would have adjusted to the increase. But then, even 25 cents may have been too much for the aldermen in the ‘hog butcher to the world’ to bear.
JVH
2 Responses
Just so you have the facts straight…
…the $.25 meters from 5 years ago are now $2; the $1 meters from 5 years ago are now $4; and the $3 meters from 5 years ago are now $6.50.
…it took the City almost 3 years to run through most of the money (there’s still a little remaining), not 1 year.
…the money has been used to pay current debts (budget shortfall).
From a purely financial perspective, the City actually made a good deal for itself (with no transparency). The initial implementation was terrible, but the system works well now. But, they’ve spent most of the money which is truly unfortunate.
Heh — So the prices doubled in five years, the city spent the money on budget shortfalls in three years, and they only have what, 75 more years to go. Yep — the city made a great deal…JVH