Parking payola
November 6, 2023 4:25 AM Subscribe
There was a 2012 MetaFlap about privatizing car parking in NYC and Chicago. Turns out that it has been a great deal [ExecSumm] - [Fuller Story from Jalopnik] for investors Morgan-Stanley and the Sheik of Abu Dhabi. Hanlon's Razor applies?
Your favorite math-heads have been banging the figures together, each in their own inimitable style:
Tim Harford Cautionary Tales [39m]
Matt Parker Stand-up Math [21m]
Rollie Williams Climate Town [31m]
Your favorite math-heads have been banging the figures together, each in their own inimitable style:
Tim Harford Cautionary Tales [39m]
Matt Parker Stand-up Math [21m]
Rollie Williams Climate Town [31m]
Just last week...
The [Supreme Court of the US] rejected the drivers' appeal of an April ruling from the 7th U.S. Circuit Court of Appeals that upheld Chicago's long term contract with Chicago Parking Meters LLC. The drivers have argued the contract and its restrictions on the city gave Chicago Parking Meters an unlawful monopoly in violation of U.S. antitrust law...posted by JoeZydeco at 5:31 AM on November 6, 2023 [4 favorites]
The [US District Court] said the deal "might have been foolish" or "short-sighted" but "that is not enough to state a claim for a violation of the antitrust laws."
OP, did you really intend for the first link to go to a specific comment (with zero likes) in that 2012 Mefi posting, or just to that posting? If the latter, you could ask the mods to fix (it's trivial) by reporting my comment here and asking them to ...
posted by intermod at 5:53 AM on November 6, 2023 [1 favorite]
posted by intermod at 5:53 AM on November 6, 2023 [1 favorite]
I am always suspicious when governments cut deals with private investors. When you have civil servants (like me) with little to no finance experience and no financial stake in the negotiations sitting across the desk from finance experts who do have a personal stake, the civil servants are at extreme risk of being suckered.
posted by vorpal bunny at 6:06 AM on November 6, 2023 [20 favorites]
posted by vorpal bunny at 6:06 AM on November 6, 2023 [20 favorites]
I’ve known this as a bad deal since news first broke, and by now it’s a textbook example of bad governance. What I haven’t heard is any serious plan for how the city gets out of it other than that long shot case which the Supreme Court just passed on – is there any kind of effort Chicago mefites are aware of to break it? Any signs of of corruption which could be used to invalidate the contract, something like a tax on revenue derived from metered parking, etc.?
posted by adamsc at 6:08 AM on November 6, 2023 [2 favorites]
posted by adamsc at 6:08 AM on November 6, 2023 [2 favorites]
I am always suspicious when governments cut deals with private investors.
Especially when it involves privatizing a public space for the purposes of extracting rent.
posted by mhoye at 6:43 AM on November 6, 2023 [25 favorites]
Especially when it involves privatizing a public space for the purposes of extracting rent.
posted by mhoye at 6:43 AM on November 6, 2023 [25 favorites]
What I haven’t heard is any serious plan for how the city gets out of it
The city could institute a congestion charge and use it to fund public transit, while simultaneously making some streets pedestrian-only zones, thus driving down the value of the parking meters. (There is a Ground Transportation Tax since 2020, but it's aimed at ride-hailing services, not commuters or other drivers who might be likely to use metered parking.)
The problem is that it was such a ludicrously lopsided deal that it's hard to imagine a plan that would induce the capitalists to sell back the rights without making parking so difficult or expensive that it became a significantly regressive tax or drain on the economy in the meantime.
posted by jedicus at 7:09 AM on November 6, 2023 [5 favorites]
The city could institute a congestion charge and use it to fund public transit, while simultaneously making some streets pedestrian-only zones, thus driving down the value of the parking meters. (There is a Ground Transportation Tax since 2020, but it's aimed at ride-hailing services, not commuters or other drivers who might be likely to use metered parking.)
The problem is that it was such a ludicrously lopsided deal that it's hard to imagine a plan that would induce the capitalists to sell back the rights without making parking so difficult or expensive that it became a significantly regressive tax or drain on the economy in the meantime.
posted by jedicus at 7:09 AM on November 6, 2023 [5 favorites]
the civil servants are at extreme risk of being suckered
The information and resource asymmetry means this is often the case. But I'm still not comfortable jumping to a Hanlon's Razor conclusion. I think deals like this are almost always baked with collusion. It can even look legit, like when a gambling interest just funds candidates and re-enters ballot questions until it gets the answer it wants. From a legal standpoint, maybe no laws are broken, but from a consequentialist view, private interest undermined public opinion and public good. It happens all.the.time.
Short version: there's plenty of malice if you know where to look
posted by Reasonably Everything Happens at 7:09 AM on November 6, 2023 [9 favorites]
The information and resource asymmetry means this is often the case. But I'm still not comfortable jumping to a Hanlon's Razor conclusion. I think deals like this are almost always baked with collusion. It can even look legit, like when a gambling interest just funds candidates and re-enters ballot questions until it gets the answer it wants. From a legal standpoint, maybe no laws are broken, but from a consequentialist view, private interest undermined public opinion and public good. It happens all.the.time.
Short version: there's plenty of malice if you know where to look
posted by Reasonably Everything Happens at 7:09 AM on November 6, 2023 [9 favorites]
But I'm still not comfortable jumping to a Hanlon's Razor conclusion. I think deals like this are almost always baked with collusion.
I agree with this. It's not like no one pointed out the potential problems of the deal before it was struck; the city would've hate to plug its ears and screech LA LA LA to avoid knowing. I think there probably turned out to be more problems with the deal than the city was expecting (that the deal they struck might be impeding the implementation of pedestrian zones or parklets, because those were relatively unthinkable even in American cities at the start of the 21st century; that they might make electric vehicle charging more complicated, because no one drove electric back then) but there were plenty of foreseeable problems that they did not address (that prices would rise dramatically, that the city would bleed money every time they needed to block access to parking spaces to use the city streets for the city, that it was a long-term deal they would struggle to get out of).
posted by grandiloquiet at 7:22 AM on November 6, 2023 [1 favorite]
I agree with this. It's not like no one pointed out the potential problems of the deal before it was struck; the city would've hate to plug its ears and screech LA LA LA to avoid knowing. I think there probably turned out to be more problems with the deal than the city was expecting (that the deal they struck might be impeding the implementation of pedestrian zones or parklets, because those were relatively unthinkable even in American cities at the start of the 21st century; that they might make electric vehicle charging more complicated, because no one drove electric back then) but there were plenty of foreseeable problems that they did not address (that prices would rise dramatically, that the city would bleed money every time they needed to block access to parking spaces to use the city streets for the city, that it was a long-term deal they would struggle to get out of).
posted by grandiloquiet at 7:22 AM on November 6, 2023 [1 favorite]
The city could institute a congestion charge and use it to fund public transit, while simultaneously making some streets pedestrian-only zones, thus driving down the value of the parking meters.
Per the links, Chicago is apparently on the hook for loss of revenue due to temporary (parades) and permanent (bus stops, construction) closures of parking meters. I would have imagine that any efforts like this would have to be very carefully structured and subject to extensive litigation.
posted by zamboni at 7:23 AM on November 6, 2023 [3 favorites]
Per the links, Chicago is apparently on the hook for loss of revenue due to temporary (parades) and permanent (bus stops, construction) closures of parking meters. I would have imagine that any efforts like this would have to be very carefully structured and subject to extensive litigation.
posted by zamboni at 7:23 AM on November 6, 2023 [3 favorites]
When you have civil servants (like me) with little to no finance experience and no financial stake in the negotiations sitting across the desk from finance experts who do have a personal stake, the civil servants are at extreme risk of being suckered.This is such a widespread problem: most government IT projects fail the same way and a lot of infrastructure projects seem prone to it, too. I credit a lot of it back to Reagan-era magical thinking about private sector efficiency: once you make it impossible for the government to have people who are experts in a topic you’re just guaranteeing that the government will keep getting $50M into a $2M project to save $500k in payroll.
posted by adamsc at 7:28 AM on November 6, 2023 [24 favorites]
In addition to the fiscal stupidity of the deal, parking costs are an important lever in transportation policy. My hometown of Calgary has had a remarkably high level of public transit usage to the downtown, which is in part due to fast and frequent light rail service, but is secretly behind the scenes also due to obscure building code requirements that mean that offices are deliberately underprovisioned with parking and that at one time meant that downtown parking charges were the second highest in North America.
Not to mention the value of controlling curb space, bus stops, bus and bike lanes, etc.
posted by Superilla at 7:56 AM on November 6, 2023 [2 favorites]
Not to mention the value of controlling curb space, bus stops, bus and bike lanes, etc.
posted by Superilla at 7:56 AM on November 6, 2023 [2 favorites]
but is secretly behind the scenes also due to obscure building code requirements that mean that offices are deliberately underprovisioned with parking and that at one time meant that downtown parking charges were the second highest in North America.
In other words, removing subsidization of private vehicle ownership and placing the actual cost on the heads of owners serves to make the use of private vehicles less attractive while improving the viability of public transit.
posted by NoxAeternum at 8:14 AM on November 6, 2023 [10 favorites]
In other words, removing subsidization of private vehicle ownership and placing the actual cost on the heads of owners serves to make the use of private vehicles less attractive while improving the viability of public transit.
posted by NoxAeternum at 8:14 AM on November 6, 2023 [10 favorites]
Anything private but backed up by power of the government to fine and seize is a good deal.
posted by kschang at 8:29 AM on November 6, 2023 [1 favorite]
posted by kschang at 8:29 AM on November 6, 2023 [1 favorite]
I live in Chicago and have a degree in urban planning (and bike/use transit as transportation a lot) so I've been seething about this deal since it was inked. But I still learned some new things from these videos. Thanks for sharing!
What I don't remember is how long the deal was discussed before it was brought to city council to approve. Because the videos emphasize that city council had like 2 days to review the 100+ page final contract before the vote. How much was known before then? How many aldermen (or their staff) were part of the contract drafting, or had access to the consultants the city hired to help with the deal? And, as noted above, how many had the financial chops to understand the deal? Like, I learned from the videos that because of the declining value of the dollar as you get further out in time, the contract could have been for 37 years instead of 75 and been worth 95% of what we sold it for. Did any alders know this? Did Daley? Did the consulting firm tell anyone this? Like, I get that it's not exactly a secret if you understand the time value of money but also - not everyone does!
Increasing the price of street parking (and maybe the fancier meters) is probably a net good. There's no reason for downtown parking to be like 50c an hour and I'm glad I don't have to worry about having coins if I'm parking on the street. But the city could have borrowed money to get the fancy meters installed and raised the rates themselves, while retaining control over our own curb space. I know that wouldn't have plugged the budget deficit but I just hate that we turned a temporary problem into a multigenerational one.
I also think that the city hides behind the deal to excuse their lack of movement on improving transit and active transpo infrastructure. There are miles and miles of roads, including arterials, that don't have meters -- yet we still aren't willing to remove free (aka subsidized) street parking to put in bus lanes or bike lanes.
posted by misskaz at 8:38 AM on November 6, 2023 [6 favorites]
What I don't remember is how long the deal was discussed before it was brought to city council to approve. Because the videos emphasize that city council had like 2 days to review the 100+ page final contract before the vote. How much was known before then? How many aldermen (or their staff) were part of the contract drafting, or had access to the consultants the city hired to help with the deal? And, as noted above, how many had the financial chops to understand the deal? Like, I learned from the videos that because of the declining value of the dollar as you get further out in time, the contract could have been for 37 years instead of 75 and been worth 95% of what we sold it for. Did any alders know this? Did Daley? Did the consulting firm tell anyone this? Like, I get that it's not exactly a secret if you understand the time value of money but also - not everyone does!
Increasing the price of street parking (and maybe the fancier meters) is probably a net good. There's no reason for downtown parking to be like 50c an hour and I'm glad I don't have to worry about having coins if I'm parking on the street. But the city could have borrowed money to get the fancy meters installed and raised the rates themselves, while retaining control over our own curb space. I know that wouldn't have plugged the budget deficit but I just hate that we turned a temporary problem into a multigenerational one.
I also think that the city hides behind the deal to excuse their lack of movement on improving transit and active transpo infrastructure. There are miles and miles of roads, including arterials, that don't have meters -- yet we still aren't willing to remove free (aka subsidized) street parking to put in bus lanes or bike lanes.
posted by misskaz at 8:38 AM on November 6, 2023 [6 favorites]
See also: literally every deal like this that governments make. In the case of this highway voters "saved" a few bucks in the short run, which helped the then-current provincial government win another term (because at heart we're a populace of hayseed rubes who love nothing more than to be fleeced by conservative governments), but of course in the long term it wound up being a massive loss of revenue for the citizens of this province and a "value generating monster" for the private entities which own it.
posted by The Card Cheat at 8:54 AM on November 6, 2023 [2 favorites]
posted by The Card Cheat at 8:54 AM on November 6, 2023 [2 favorites]
> Hanlon's Razor applies?
"Never attribute to malice that which is adequately explained by stupidity."
1. It can be both.
2. Sounds like something a malicious person would come up with when stupidity can get you fired but premeditation can get you jailed.
posted by AlSweigart at 10:27 AM on November 6, 2023 [2 favorites]
"Never attribute to malice that which is adequately explained by stupidity."
1. It can be both.
2. Sounds like something a malicious person would come up with when stupidity can get you fired but premeditation can get you jailed.
posted by AlSweigart at 10:27 AM on November 6, 2023 [2 favorites]
I'll have to read this thread later, but I did read a chapter all about the Chicago debacle in Henry Grabar's eye-opening, recent book, "Paved Paradise: How Parking Explains the World". If you like this kind of thread, you'll love this book. I've stopped grumbling about feeding parking meters since reading it (still try to bike locally, and observe David Suzuki's general rule to never drive if you're going 8 blocks or less (and I saw this 80-something guy recently, and he's in the kind of shape I want to be in when I hit that age, so I'd say it's an excellent rule)).
I think he also discusses the Chicago giveaway at this War on Cars podcast episode.
posted by morspin at 10:46 AM on November 6, 2023 [1 favorite]
I think he also discusses the Chicago giveaway at this War on Cars podcast episode.
posted by morspin at 10:46 AM on November 6, 2023 [1 favorite]
Henry Grabar? He talks about his book, parking and e-cars in the Tim Harford link, starting at 19m.
posted by BobTheScientist at 11:05 AM on November 6, 2023 [1 favorite]
posted by BobTheScientist at 11:05 AM on November 6, 2023 [1 favorite]
I live in Chicago and sometimes I think, what if I just never used the meter and left it up to chance and probably got an average of 2 tickets/year by getting caught doing that, because as far as I understand, at least my city gets the ticket revenue and I'd prefer that scenario.
posted by jeweled accumulation at 11:54 AM on November 6, 2023 [3 favorites]
posted by jeweled accumulation at 11:54 AM on November 6, 2023 [3 favorites]
> Hanlon's Razor applies?
"Never attribute to malice that which is adequately explained by stupidity."
1. It can be both.
2. Sounds like something a malicious person would come up with when stupidity can get you fired but premeditation can get you jailed.
Henlein's Razor: Never attribute to malice that which is adequately explained by stupidity (but don't discount malice).
For some reason this alternate has been wiped from the Internet, but that's where I learned it!
posted by rhizome at 1:00 PM on November 6, 2023 [1 favorite]
"Never attribute to malice that which is adequately explained by stupidity."
1. It can be both.
2. Sounds like something a malicious person would come up with when stupidity can get you fired but premeditation can get you jailed.
Henlein's Razor: Never attribute to malice that which is adequately explained by stupidity (but don't discount malice).
For some reason this alternate has been wiped from the Internet, but that's where I learned it!
posted by rhizome at 1:00 PM on November 6, 2023 [1 favorite]
Seems like an excellent use case for eminent domain, for once: to seize land associated with parking space and reuse it for the public good.
posted by They sucked his brains out! at 2:11 PM on November 6, 2023
posted by They sucked his brains out! at 2:11 PM on November 6, 2023
Hanlon's razor only applies to people you have some reason to believe are acting in good faith. When it comes to interactions involving people who wield power and influence, it's exactly backwards.
posted by shponglespore at 5:55 PM on November 6, 2023 [1 favorite]
posted by shponglespore at 5:55 PM on November 6, 2023 [1 favorite]
Seems like an excellent use case for eminent domain, for once
Critically, the investment company leased the meters, and did not purchase any land. So imminent domain would not appear to apply. But I'm curious about municipalization. Couldn't the city make Chicago Parking Meters LLC a government entity? It would then make sense to end the lease, being that the lessee and lessor are the same?
posted by kaelynski at 9:39 PM on November 6, 2023
Critically, the investment company leased the meters, and did not purchase any land. So imminent domain would not appear to apply. But I'm curious about municipalization. Couldn't the city make Chicago Parking Meters LLC a government entity? It would then make sense to end the lease, being that the lessee and lessor are the same?
posted by kaelynski at 9:39 PM on November 6, 2023
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posted by rockindata at 5:29 AM on November 6, 2023 [1 favorite]