Cities want to cash in on their parking spots

A car passes a parking garage in New York City.

Kai Ryssdal: Paying to park your car on a public street is one of those things that you just kind of have to do. It's not like parking meters are going away, and they do keep people from hogging the best spots all day. As an added bonus, parking can be a pretty good money-maker when cities are short of cash. And there are a whole lot of cities in exactly that situation right now. Cities that are trying to make ends meet by leasing out parking to the private sector.

From the public radio "Transportation Nation" project at WNYC, Andrea Bernstein has more.

Andrea Bernstein: In New York City recently, Mayor Michael Bloomberg wanted to raise parking rates a quarter an hour. The response, in a city that's facing thousands of layoffs -- outrage. Mayor Bloomberg backed down. But in Indianapolis, the city went a lot further than to try and plug a budget hole by raising parking rates. It leased out its entire parking system -- for 50 years.

Indianapolis Deputy Mayor Michael Huber explains why.

Michael Huber: To try to find a way to enhance revenues so we could generate more revenues for infrastructure improvements in lieu of general fund tax revenues.

That's government speak for "we needed the money." Right about now, every municipal government does. Chicago did a couple years ago, and leased off parking management to a private company for more than a billion dollars. But the company, Morgan Stanley, immediately raised parking rates around the city, to almost universal criticism.

One of those critics is Rachel Weinberger, professor of transportation planning at the University of Pennsylvania.

Rachel Weinberger: When a private entity purchases a garage, they do it because they think there's a financial positive for them in the long run. They think it's a bargain, so they're buying something at a fire sale.

Weinberger says it's a better idea for the city to just collect more money. She says in Boston, hourly rates were recently raised a quarter after 25 years.

Weinberger: To increase your meter rates one penny per year is just complete mismanagement of an important asset.

In Indianapolis, rates hadn't been raised for even longer. I asked Deputy Mayor Huber: Why did Indy need a private company in order to hike rates?

Huber: There are a lot of theories. There's always a question of political will. No mayor or leader wants to be out in front talking about rate increases or tax increases.

Besides, Huber says, Indianapolis made sure that new technology went in before the rate hike, so that as of this spring what people would notice is that they could pay with a credit card. Not the fact that they had to pay more. He says most people in Indianapolis don't even know a private company manages the meters.

Huber: Honestly, I think that there just wasn't a lot of attention paid to our parking system because people didn't necessarily see it as an asset.

In Los Angeles and Pittsburgh, plans to lease out parking were resoundingly rejected by the city councils. But Huber says it worked in Indy because there was a level of trust. He says the former Indianapolis Mayor, Stephen Goldsmith, did a lot of privatizing the 1990's -- and things didn't work out so badly. Goldsmith is now deputy mayor of New York, which has opened the door a tiny crack to privatizing parking. But Goldsmith's boss, Mayor Bloomberg, is "eh" on the idea.

Michael Bloomberg: What we're not going to do is sell our birthright, take some money to balance the budget today and leave our kids with a greater liability.

Meantime, the budget staff in New York City hall is still trying to figure out how to prevent even more layoffs and service cuts.

In New York, I'm Andrea Bernstein for Marketplace.

Log in to post4 Comments

It is insane for government to privatize its assets. This is the Republican dream; to make money for their rich cronies. But, it is a disaster for the rest of us.

Private companies charge more for their services than governments simply because they want to make a profit, which is not necessarily the role of government. Plus, private companies lately, like to pay their top people outrageous sums of money.

Short-term gain for long-term loss? No thank you!

Why is there outrage??? What gives today's minion city leaders the right to sell a future generation's parking revenue for a one-time shot in the arm today. That is criminally stupid, but most importantly, today's leaders should have NO MORAL RIGHT to take away the income stream from future generations.

Why is there outrage? Studies continually suggest that municipalities drastically underprice parking relative to the cost of the real estate or the rates charged by private garages. Cities like Redwood City, CA have done a great job moving to variable, demand-based pricing. If you don't like the prices, bike or walk. This is the behavior that cities should be encouraging as they cost far less in the long-term with respect to maintaining infrastructure, keeping people healthy, and keeping property values (and tax revenue) higher due to more livable spaces.

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