Keep Them Doggies Movin'

by Gary Farber

My apologies for having posted so little since becoming an official ObWier; I'm now leaving for Oakland, CA, in less than two weeks, and am working on moving, and minimizing my usual irrational panic. 

Perversely, I have done some link dump posts at my home blog, Amygdala, in recent weeks, so feel free to check those out before they're too aged, if you desperately need more reading.

I've certainly been frustrated to not join in on the income inequality discussions when there is such wrongness being perpetrated on the internet, and even ObWi, but I'm sure it will still be there when I get back, and meanwhile the rest of you do such a great job in comments, as do the other front page bloggers, it's not as if I'm necessary, anyway.  (But it's a topic I'm passionate on, nonetheless, so later on that, dudettes and dudes.)

Meanwhile, to briefly follow up on a past post of Dr. Science's, SF³ has withdrawn the invitation to Elizabeth Moon to attend WisCon 35 as guest of honor.  That followed SF³, the parent body of WisCon, having passed these two resolutions on October 3rd.  This is a precedent for sf conventions, for better or worse.

In another very quick hit, Why Does Abu Dhabi Own All of Chicago's Parking Meters? Yes, let's discuss privatization, virtues and faults, uses and limitations.  Let's start by reading some of Matt Taibbi's Griftopia: Bubble Machines, Vampire Squids, and the Long Con That is Breaking America, as excerpted at the link.

A taste:

[...] My buddy was a young guy who'd come up working on the derivatives desk of one of the more dastardly American investment banks. After a few years of that he decided to take a step up morally and flee to the Middle East to go to work advising a bunch of sheiks on how to spend their oil billions.

Aside from the hot weather, it wasn't such a bad gig. But on one of his trips home, we met in a restaurant and he mentioned that the work had gotten a little, well, weird.

"I was in a meeting where a bunch of American investment bankers were trying to sell us the Pennsylvania Turnpike," he said. "They even had a slide show. They were showing these Arabs what a nice highway we had for sale, what the toll booths looked like . . ."

I dropped my fork. "The Pennsylvania Turnpike is for sale?"

He nodded. "Yeah," he said. "We didn't do the deal, though. But, you know, there are some other deals that have gotten done. Or didn't you know about this?"

As it turns out, the Pennsylvania Turnpike deal almost went through, only to be killed by the state legislature, but there were others just like it that did go through, most notably the sale of all the parking meters in Chicago to a consortium that included the Abu Dhabi Investment Authority, from the United Arab Emirates.

There were others: A toll highway in Indiana. The Chicago Skyway. A stretch of highway in Florida. Parking meters in Nashville, Pittsburgh, Los Angeles, and other cities. A port in Virginia. And a whole bevy of Californian public infrastructure projects, all either already leased or set to be leased for fifty or seventy-five years or more in exchange for one-off lump sum payments of a few billion bucks at best, usually just to help patch a hole or two in a single budget year.

America is quite literally for sale, at rock-bottom prices, and the buyers increasingly are the very people who scored big in the oil bubble. Thanks to Goldman Sachs and Morgan Stanley and the other investment banks that artificially jacked up the price of gasoline over the course of the last decade, Americans delivered a lot of their excess cash into the coffers of sovereign wealth funds like the Qatar Investment Authority, the Libyan Investment Authority, Saudi Arabia's SAMA Foreign Holdings, and the UAE's Abu Dhabi Investment Authority.

[...]

Around this time, state and municipal executives began putting their infrastructure assets up to lease — essentially for sale, since the proposed leases in some cases were seventy-five years or longer. And in virtually every case that I've been able to find, the local legislature was never informed who the true owners of these leases were. Probably the best example of this is the notorious Chicago parking meter deal, a deal that would have been a hideous betrayal even without the foreign ownership angle. It was a blitzkrieg rip-off that would provide the blueprint for increasingly broke-ass America to carry lots of these prized toasters to the proverbial pawnshop. 

[...]

Mayor Daley, who had already signed similar lease deals for the Chicago Skyway and a series of city-owned parking garages, had been working on this deal for more than a year. He approached a series of investment banks and companies and invited them to submit bids on seventy-five years' worth of revenue on the city's 36,000 parking meters. Morgan Stanley was one of those companies.

Scales added that after this bait and switch, the original 6 percent Abu Dhabi "entity" reduced its stake by roughly half after Tannadice got involved. According to my math, that still makes Abu Dhabi– based investors at least 30 percent owners of Chicago's parking meters. God knows who the other real owners are.

Now comes the really fun part — how crappy the deal was for other reasons.

To start with something simple, it changed some basic traditions of local Chicago politics. Aldermen who used to have the power to close streets for fairs and festivals or change meter schedules now cannot — or if they do, they have to compensate Chicago Parking Meters LLC for its loss of revenue.

So, for example, when the new ownership told Alderman Scott Waguespack that it wanted to change the meter schedule from 9 a.m. to 6 p.m. Monday through Saturday to 8 a.m. to 9 p.m. seven days a week, the alderman balked and said he'd rather keep the old schedule, at least for 270 of his meters. Chicago Parking Meters then informed him that if he wanted to do that, he would have to pay the company $608,000 over three years.

The bigger problem was that Chicago sold out way too cheap. Daley and Co. got roughly $1.2 billion for seventy-five years' worth of revenue from 36,000 parking meters. But by hook or crook various aldermen began to find out that Daley had vastly undervalued the meter revenue.

When Waguespack did the math on that $608,000 he was going to be charged, he discovered that the company valued the meters at about 39¢ an hour, which for 36,000 meters works out to $66 million a year, or about $5 billion over the life of the contract.

"When it comes to finding a figure for the citizens of Chicago, they say the meters are worth $1.16 billion," Waguespack said shortly after the deal. "But when it comes to finding a figure to cover Morgan Stanley, they say they're worth, what, $5 billion? Who are they looking out for, the residents or Morgan Stanley?"  [....]

Privatization: because it's always better than Big Government.

No? 

Look, if there are any niggling problems, they can be resolved in 75 years. 

ADDENDUM, 10/23/10, 12:18 a.m.: Latest link-dump post until I leave.

Comments

[Turbulence]

Sigh. Before commenting on the Chicago deal, I'd suggest that people read Felix Salmon's perspective. In short, (1) the 75 year term is really way too long, (2) all the analysis claiming the city could have gotten much more money is mostly bunk, (3) many of the city's critics don't seem to understand political constraints at all and so are living in a fantasy land.

To expand on (3), in an ideal world, the city government could raise rates to some optimal rate and make lots more money. But the city has not done that so far; in fact most cities don't. The reason is that there are massive political costs to raising parking fees. People, especially powerful people, tend to bitch and moan to city governments when the cost of parking goes up, often far out of proportion to the actual costs.

For some cities, the only politically feasible way to raise parking costs is to transfer control of parking to an external force that's not subject to the bitching and moaning of powerful people.

In general, parking rates need to rise. Low parking rates are an environmental disaster and are unjust: they serve to transfer wealth from poor people to rich people. Cities should charge market rates for parking; if you don't like privatization deals, I'm open to alternative suggestions. But our current plan of having cities all over the country price parking way below market rates forever seems to be an unending failure.

(I live in a city where I pay $8 per year for a parking permit for my car. My office is a short distance away and the parking garages there charge $200/month. That difference of $2392 per year could pay for a lot more city services.)

[Gary Farber]

Considering the topics you've opened, Turbulence, we might as well add congestion charge zones as an option.

[Countme?]

The last time I mentioned Matt Taibbi here, someone told me his reporting from the Tea Party he covered was crap.

So I'm wondering, if a gummint-hating, privatizing-loving, immigrant/Muslim hating Tea Party type parks his Medicare-supplied scooter in a Chicago parking spot and forgets to put coins in the parking meter, who's he going to blame when he has to call Abu Dhabi to have the boot removed.

Let me guess.

The Muslim in the White House?

This, of course, is aside from Turbulence's reasonable points.

[Turbulence]

Oh we should definitely add congestion charging; but that suffers from the same problems as market pricing for parking. Americans seem deeply committed to the idea that they should have the ability to drive everywhere and park everywhere without ever having to pay for it.

Also, I think there's a lot more going on with the WisCon situation than those docs necessarily suggest. Yes, they finally uninvited the bigot Moon, and that's good. But along the way, the con leaders alienated a lot of people. A very close friend of mine who resigned her position on one of the planning committees described the move as too little too late, coming as it did after many leaders verbally abused respected writers in the community who had advocated for uninviting Moon. I think we're still missing a lot of the story.

[Tony P.]

Imagine the fuss the Teabaggers would make if Chicago had sold its parking meters to the government of the USA.

--TP

[Gary Farber]

"But along the way, the con leaders alienated a lot of people."

Once Moon made that blog post considerably after she had been invited and announced, there was no way this was going to end without a lot of angry members of the sf community.

There's no decision available that could prevent that. It was just a matter of choosing your mix.

Have you ever been on an sf concom, by the way, participating in choosing GOH decisions? Just curious precisely what perspective you're approaching the issues from.

In any case, having been on a bunch of those, and having... oh, god, I don't have time to describe Iguanacon now, I can assure you that, in fact, no one knows everything going on in such situations, and that's always part of the problem.

[Gary Farber]

Moon has responded, by the way, technically. I don't have time to go do a set of links of all -- or any -- of the many discussions I've read, I'm afraid. Not to mention that many of the more interesting ones are on sf con-running mailing lists, anyway.

Turb: "A very close friend of mine who resigned her position on one of the planning committees"

N. K. Jemisin?

[russell]

Cities should charge market rates for parking; if you don't like privatization deals, I'm open to alternative suggestions.

Raise the rate, the city keeps the money and spends it on services.

That's my suggestion.

[liberal japonicus]

Just out of curiosity, how much is parking in various places? Here in Japan, it's roughly $1 to $3 dollars an hour in my smaller city, with it going to 4 or 5 bucks an hour in the downtown of the bigger city. Not sure what parking is in Tokyo or Osaka though.

[Gary Farber]

Russell, the Felix Salmon piece Turbulence pointed to did have a valid point in noting that it's difficult for cities to raise parking rates and make it stick when it's up to the City Council/Board of Aldermen to make the decision.

[Turbulence]

Once Moon made that blog post considerably after she had been invited and announced, there was no way this was going to end without a lot of angry members of the sf community.

There's no decision available that could prevent that. It was just a matter of choosing your mix.

I think you're probably right, but I also think that some mixes are better than others. I mean, given the choice between alienating bigots and alienating non-bigots, I choose to alienate bigots. And given the nature of WisCon, I think that choice is closely aligned with their institutional values. I mean, WisCon is a feminist con; there's an understanding in that community about dealing with privilege and sexism and racism and religious bigotry that is perhaps not so well reflected at other cons. To put it bluntly, I expected better from WisCon.

Have you ever been on an sf concom, by the way, participating in choosing GOH decisions? Just curious precisely what perspective you're approaching the issues from.

My spouse has been attending for years and was on several committees.

N. K. Jemisin?

No.

[russell]

Russell, the Felix Salmon piece Turbulence pointed to did have a valid point in noting that it's difficult for cities to raise parking rates

Then don't raise the rates and the city keeps the current revenue stream and spends it on city services.

Seriously, the US has 30% of global GDP and we're selling off infrastructure to pay the bills? It's insane.

And, as the article notes, when you sell off the meters to a private concern, to some greater or lesser degree you lose control over their operation anyway.

So Chicago may see their parking rates go up with or without the consent of the city council or aldermen.

[russell]

Also, I would like to push back on the "cities should charge market rates for parking" thing.

It depends on what you think parking is.

Cities don't charge "market rates" for water, roads, police, transportation, etc etc etc. They "charge" more or less enough to make those things available, period.

And I put "charge" in scare quotes because the cost is not allocated on a fee-for-service basis.

I'm open to the argument that cities shouldn't be in the business of subsidizing automobile use in downtown areas (or even that they should do things to *discourage* automobile use in downtown areas), and that therefore parking isn't like water, roads, etc.

But that's not the dynamic here.

Some things should be provided by the public sector not because they are unavailable due to some "market failure" in the private sector, but because it's important that they be available in a consistent and reliable way.

Sufficiently so that it's preferable to not rely on the whims of the market to provide them, even if the market is happy to do so at the moment.

Is parking, specifically, one of those things? That's a discussion folks could have.

But are there things that should be provided purely because they are essential, or simply very useful, regardless of what "the market" wants?

Yes, there are.

[Phil]

Cities don't charge "market rates" for water, roads, police, transportation, etc etc etc. They "charge" more or less enough to make those things available, period.

And I put "charge" in scare quotes because the cost is not allocated on a fee-for-service basis.

I don't know about you, but I have a water meter on my house. Just in the interest of pedantry.

[yods]

You may have a water meter, but I'm pretty sure you're not being charged market rate.

[russell]

I don't know about you, but I have a water meter on my house.

My bad, some things in my list carry a fee-for-service charge.

I stand behind my point about market rates and the desirability of public vs private provision of services.

[nous]

I noticed that small portions of the baggersphere have gone into a frenzy over the E. Moon saga and are now declaring the Left a sort of Maoist entity where ideological purity is all and difference is not to be tolerated.

Okay, it was Moe.

Amazing how worked up some people can get and how much they can read into a canceled invitation to a feminist SF Con that attracts less than 1k people. Whatever keeps the barking going, I guess.

[Turbulence]

And I put "charge" in scare quotes because the cost is not allocated on a fee-for-service basis.

It is for water. And it generally is for public transportation. I mean, I pay money for each bus/subway trip. I'd love to live in a city where buses and subways had no user fees, but I don't know of any in the US.

I think police and fire departments are a bit of a red herring in this discussion. These services are a lot more like insurance, and since they're often funded through property tax levies anyway, they are kind of paid for on a fee-for-service basis. That's how insurance works: the more valuable your property is, the more you spend on "insuring" it.

But that's not the dynamic here.

It is not?

Some things should be provided by the public sector not because they are unavailable due to some "market failure" in the private sector, but because it's important that they be available in a consistent and reliable way.

That's why we need market pricing for parking in major cities. In many such places, parking is often unavailable AND congestion is increased because drivers are circling around looking for free parking. The current system of free/absurdly-cheap parking leads to shortages and traffic congestion. Market pricing for parking means things like setting the price dynamically so as to ensure that occupancy will be, say, less than 90%. That means there's always a spot and people end up paying a fair price for it. Plus, everyone benefits from the reduced traffic congestion.

Sufficiently so that it's preferable to not rely on the whims of the market to provide them, even if the market is happy to do so at the moment.

When parking is free/absurdly-cheap, you often can't get a parking spot, no matter how important it is. I don't see why being denied access to something you consider important is less of a problem when the denial is due to ignorant policies.

I mean, I really don't understand how anyone could object to pricing parking spaces such that a few spaces will always be open. That's what market pricing means. In many areas, parking will be priced free or close to free. But in places where it really matters, parking will be expensive. What exactly is your objection to that?

Look, free/cheap parking imposes costs. One cost is that it makes having affordable housing more difficult since every damn apartment building is legally required to have tons of "free" parking even if every resident can walk 50 feet to a subway station.

[Uncle Kvetch]

Not being a SF fan I had no idea who Elizabeth Moon was until 10 minutes ago.

Having just read the blog entry that got her in trouble, I would dearly like to erase the last 10 minutes and return to the sweet bliss of ignorance.

[ral]

Hmmm... market pricing for parking. I don't know how that would work in practice and while I agree with many of Turbulence's points re. automobile congestion I have to point out that we tried the experiment of market pricing of electricity -- it was called "Enron."

[Uncle Kvetch, thanks for the warning. Now I know what to avoid.]

[Turbulence]

we tried the experiment of market pricing of electricity -- it was called "Enron."

That's not true though. We have market pricing for electricity right now all over the country. My electric bill charges me for electricity based on how scarce electricity is. When there is low demand, the price goes down. When demand is high, the price goes up.

If electricity was priced the way parking was, this is what it would look like. The government would mandate that developers had to provide "free" electricity to everyone. In some places, there'd be good electrical service, but in other places, you'd have intermittent service with random blackouts everyday. If you lived in a place with bad service, there'd be no way for you to get better service. If you lived in a place with good service, there'd be no incentive to ever conserve energy since, hey, it doesn't "cost" you anything. This would be an insane way to live.

Market pricing for parking is about setting prices based on demand. It doesn't require privatization. But it seems to me that our existing political institutions are ill-suited to pulling it off without privatization. I'd love to be proven wrong.

[Countme?]

Turbulence:

As some point, Sebastian will show up to correct the mis-impression that water is not subsidized.

I'm probably missing alot here, but here goes:

Yes, we don't pay the full price for parking.

But, we don't pay the full cost of public transportation either.

Is the affordable housing offered at full cost? If you get rid of the free or cheap parking in cities, I expect you would see a very quick gentrification of all urban housing as the upper middle class (sniffing
incentives all over the place) moved into the cities (not a bad thing always), but the poor would be displaced to the outskirts and not be able to afford the full-cost affordable housing, the full-cost parking, or the full-cost public transport.

Not that we should halt subsidization, necessarily (the Netherlands, for example, has low cost subsidized public transport that is a marvel of efficiency).

My larger theory is that Americans as a class of humans are incompetent when it comes to public goods. We're programmed from birth to game whatever system there is for our own ends.

And then whine about it. Nothing personal to the anti-subsidization crowd making their way to demonstrations for subsidized scooter whiners.

[Turbulence]

As some point, Sebastian will show up to correct the mis-impression that water is not subsidized.

Water has a bunch of historical complexities that I don't think are relevant to the issue. The bottom line with water though is that most people do pay for it with user fees where the more water they use, the more money they pay.

But, we don't pay the full cost of public transportation either.

As I understand it, public transportation is mostly paid for by user fees. That isn't remotely true for road construction/maintenance or parking in most places.

Is the affordable housing offered at full cost? If you get rid of the free or cheap parking in cities, I expect you would see a very quick gentrification of all urban housing as the upper middle class (sniffing
incentives all over the place) moved into the cities (not a bad thing always), but the poor would be displaced to the outskirts and not be able to afford the full-cost affordable housing, the full-cost parking, or the full-cost public transport.

Um...what? I'm really confused.

Poor people are much less likely to own a car than the rest of the population. They're more likely to use public transportation than the rest of the population. I don't see why charging market rates for parking would automatically gentrification.

And sure, parking mandates aren't the only thing that drives up the cost of housing. But they are a significant part of this whole constellation of regulations that we've enacted that effectively make cheap housing illegal to build.

[ral]

Sorry, Turb, but how do you propose to set the prices? Auctions? I can just imagine the futures market.

It seems to me in New York City parking is more or less market priced. You have to buy a space in your apartment building's garage (for $hundreds / month). Street parking is prohibited in many locations during busy times (in some places at all times). Getting a space on demand at a busy time in Manhattan usually means paying a parking lot.

I don't know about cause and effect though regarding public transit. My daughter lived in the Bronx for 3 years and did not own a car, commuting to Manhattan on the subway. She reported that the service was deteriorating -- often stations would be closed with no warning and long delays ensued (having to backtrack or take a bus).

I think the committment to public transportation has to be a conscious one, not indirect by making cars more expensive. And in particular, making parking difficult just raises peoples' ire.

Even in New York, where public transportation is very good (compared with the rest of the U.S.) it can be inconvenient. Getting *across* the Bronx is almost impossible. You have to go down into Manhattan and then back up on another line. It takes hours.

I'm afraid were stuck with cars for the foreseeable future.

[russell]

When parking is free/absurdly-cheap, you often can't get a parking spot, no matter how important it is.

OK, I see where you're coming from with this, and I think you are making a good point.

My point overall regarding the market pricing issue is that there are some things that are so basic and essential, so intrinsic to doing anything at all in the society that we actually live in, that there is a public interest in making sure they're broadly available, to everyone.

As such, we shouldn't rely on private markets to provide them, because private markets have their own logic and dynamics, which may or may not align with the broad public interest.

If pricing parking spaces at market rates is going to result in a more rational use of them, I have no real problem with that.

Whatever works. That is my motto.

Most of all, IMO it sucks that we're selling public infrastructure and assets to pay the damned bills.

[Turbulence]

Sorry, Turb, but how do you propose to set the prices? Auctions? I can just imagine the futures market.

You start with the current price and then monitor occupancy. If peak occupancy is above your target (say, 90%), then you increase prices. If it is below your target, you decrease prices. Then try again next week. In most places, parking rates will stabilize quickly. This isn't a hard problem to solve.

It seems to me in New York City parking is more or less market priced.

Yes and no. NYC is way ahead of the curve on a lot of these issues though.

the service was deteriorating -- often stations would be closed with no warning and long delays ensued (having to backtrack or take a bus).

My preferred policy would be to institute market pricing for parking (even in NYC, this could make a big difference) and funnel the revenue into public transportation. That effectively moves cash from richer people to poorer people, while at the same time making the richer people's lives much easier: less time stuck in traffic is a quality of life improvement.

I think the committment to public transportation has to be a conscious one, not indirect by making cars more expensive. And in particular, making parking difficult just raises peoples' ire.

Of course it does, but that doesn't conflict with market pricing for parking at all. I mean, public transportation is the best thing that ever happened to drivers. You think the roads are congested and there's no parking now? Imagine if an extra million people were driving cars in your city. Market pricing for parking would make drivers' lives much easier.

I'm afraid were stuck with cars for the foreseeable future

Yes, I have no illusions about living in a carless society. But, especially in cities, I think incentives matter. There are a lot of people in cities who are at the margins where incentives can make a difference. My wife and I have one car. We don't really need it. If the city started charging us $1800 per year rather than $8 per year for the privilege of parking it on the street, we'd probably sell it because we don't need it for commuting to work.

there is a public interest in making sure they're broadly available, to everyone.

I get that, but parking is only useful to people with cars, and cars are not something that is broadly available to everyone. It costs a lot of money to buy and maintain a car.

Most of all, IMO it sucks that we're selling public infrastructure and assets to pay the damned bills.

But that's not the only reason they're doing it; one other reason is that the government can't get away with sensible public policy because the freeloading public won't allow it.

[Countme?]

"public transportation is the best thing that ever happened to drivers."

No argument, here. But only because the public transportees aren't paying the full cost of their transport either.

Don't Federal, State, and local taxes subsidize at least part of public transport?

Not that there is anything wrong with that.

(Mild joke) Regarding incentives making a difference, yes, O.K., but then I have to give kudos to Christine O'Donnell for claiming that scientists have grafted fully formed human brains onto mice.

She was wrong only in these respects: scientists have succeeded in grafting fully formed hamster brains onto humans.

I mean, you could lose the car before incentives/disincentives kicked in.

Not that I would either, myself being mostly hamster and only minimally moved by principle.

I'll amend my previous criticism about whining Americans, of which I am one, by stating that Americans only do what is right (after asking: Who's to say what is right?) after they ask: "whaddaya ya gonna pay me to do what is right?" or "whaddaya gonna do to me if don't do what is right .. supposing your right?"

;)

Have a good weekend, everyone. It's a week or so before the election and I've got to decide whether to remove the question mark behind Countme to reflect either retiring from the world and minding my own business or blowing it up.

[Chicagojon]

Yeah Chicago government screw up post!

A bit of background here...Chicago's meters have been terrible for decades. The number of meters in the city is huge and the maintenance alone of following up on broken meters and replacing them was a huge burden on the system. When the sale was made Chicago was also massively in debt. So by selling the network they:
* Forced the buyers to commit to renovate and update the system. Now instead of coin meters at every spot there is a single pay station on the block that accepts credit cards
* Got a huge influx of cash to balance the deficit
* Made a bet for/against technology. 75 years is a LONG time. Will "cars" exist in the same format that they do now? Will metered spots be replaced by robot-controlled auto-parking highrise lots? etc.
* Got rid of their requirement to manage the meters - lowering the overall city cost.

Of course these "good" issues are balanced by the bad:
* The single pay box is terrible idea for accessibility & convenience reasons (having to travel a 1/2 block through snow in a Chicago winter) and for assuming that everyone can operate within a plastic economy
* They money's already gone
* While they may look like a genius in 30 years because of the obsolescence of meters, I cannot imagine making a 75-year commitment to something as an individual. For a local government to do it is incredibly irresponsible.
* The implementation was slower than expected, had tons of problems, and continues to draw a lot of complaints. The administration has not been able to stay away from these even though it's no longer their responsibility
* The contract defines acceptable levels of price increases I believe both in the short term and long term, but not surprisingly I've found that prices have seemingly gone up everywhere.

From a pricing side it's now typically:
* $1.25/hour at most places within the city. Previously some were $0.25/hour or $0.50/hour in less traveled areas but I haven't seen these any more.
* Downtown/prime spots in the old coin-fed meters were $3/hour (5 minutes for a quarter! - the largest coin they accepted). Now that they are card operated I suspect these will go up more readily. It's easier to get people to pay more when scanning a card then to have them have to carry pounds of change around.
* The end time used to be 6pm in most/nearly all places. It's now widely 9pm

Overall I can't blame Chicago entirely for this as Federal spending levels and excesses before the latest recession put the local government in a position where they had no choice but to raise capital immediately in any possible way. Local governments aren't allowed to run deficits during a recession unlike the Fed. Once they were in that situation it's not surprising that they decided to make huge transaction and didn't get a better market value. There wasn't much choice.

Outside of the meters, Chicago also made a large sale of the tollway between Illinois and Indiana (the Chicago Skyway). That was a 1.83 billion dollar deal and a 99-year lease that I'm 99.9% against. That deal saw the prices go up immediately (with no capital improvements made) and seemed to me to have many fewer advantages from a maintenance standpoint. That money is also mostly gone already.

[Gary Farber]

Thanks for the perspective, Chicagojon.

Countme?, I'd go with the not blowing up. I hope you can find a way to more peace.

[hairshirthedonist]

I don't understand the linkage between market pricing for parking and market pricing for mass transit. Why should one imply the other? As Turb alreay wrote, parking could subsidize transit, which sounds like a win-win for a crowded city.

I live outside Philadelphia, not near the transit line heading in from Jersey. I have a serious aversion to paying for parking and will drive around looking for a free spot whenever I think I might actually find one. Other times, when I am willing to pay, I can't find a spot. I'd much rather there were another transit line closer to where I live (which has been proposed, but paying for it is the problem right now) than to drive around looking and paying for parking.

[Countme?]

hstd:

I don't quite understand the linkage either, but it seems to me that implementing market pricing for one choice within a range of choices will be compromised by the lack of market pricing in the remaining choices.

The hamster in me won't know for sure which blind alley I'm scittering down, or so I'm told by the hamster masters in the incentive/disincentive crowd.

But, yes, subsidized public transport is a win-win for crowded cities.

It's just, you know, we're dealing with an American population that seems in the thrall politically of translating "subsidy"
as something akin to Pol Pot slaughtering millions, unless of course their subsidies are removed and that's akin to Pol Pot slaughtering billions.

I try to make sense of the world in the context of the insane world, not just in the context of a rational discussion at OBWI.

O.K., now, have a good weekend everyone.

[MobiusKlein]

I bid you welcome to my hometown, Oaktown.

It's a nice enough city - go see a movie in the Grand Lake Theater too!

[wj]

it sucks that we're selling public infrastructure and assets to pay the damned bills.

It's just like Social Security or Medicare. Politicians do what will win votes (including paying the bills today). If they can kick the true costs out of sight down the road (i.e. to a time beyond when they are in office), all the better.

[russell]

It's just like Social Security or Medicare.

No, dude, selling off highways, parking meters, and other public infrastructure is not "just like" Social Security or Medicare.

Unless what we're doing now is selling servicing rights for people's SS and Medicare benefits at a discount to private insurers.

You pay us a million now, you get Joe or Suzie's FICA money. If they die early and/or don't get expensively sick, you win. If not, you don't. In the meantime, we spend the million on debt service.

Yay!

It'd be kind of like the guy on TV with the nice haircut who offers to buy out your legal settlements if you yell "I NEED MY MONEY NOW!" loudly enough.

And I hesitate to even write this comment, because I'm afraid it's going to end up as part of some knucklehead's 10 Point Plan To Save Social Security.

[Catsy]

I offer this anecdote:

A few years ago, the company where I work moved from an office park with plenty of parking and little or no parking management, to a downtown office building with underground parking managed by AMPCO.

Since there wasn't anywhere close to enough parking in the new garage for all of our employees, and this was on track to cause a mass outbreak of justifiable rage (so in order to keep my job, I have to start paying $XXX a month in parking... right), they offered what were somewhat decent incentives: a choice between a subsidized bus pass and a small monthly cash incentive to not use parking at all, or paying for a few different tiers of weakly-subsidized parking.

For those of us who don't really have the option of busing it, the parking situation was crappy but tolerable--if you could overlook effectively losing that year's merit increase to your new parking fees. Earlier this year they decided to stop offering to pay employees not to park at work.

Predictably, parking garage usage skyrocketed pretty much overnight. What had been a daily parade of annoyance at jackholes with SUVs parking in the compact spots has turned into a nightmare. Rather than acknowledge how badly they've oversold the capacity of this lot, AMPCO has their attendants jamming as many valet-parked vehicles in as they can--to the point where during the daytime the bottom four or five levels have a line of cars double-parked by the valets in one of the traffic lanes, blocking people in and creating a driving hazard. I'm pretty damn sure this is illegal even though they'll move a car that's blocking you in, but I haven't the foggiest idea how to nail them against the wall for it and get them to stop.

The moral, aside from a damn good rant about something that's really pissing in my Cheerios: pricing and incentives have a dramatic effect on behavior and resource utilization, if targeted properly--and changing those incentives can have unintended consequences.

[liberal japonicus]

thanks, Chicagojon, for answering the call. Just two short things from me, recently, a drive in parking garage went up and they priced the spaces so that the ones on the top, where you had to drive round and round to get, were cheaper than the ones on the bottom, which I thought was a neat idea. The only problem is that you get a parade of people driving all the way to the top in hopes of catching someone leaving to get a cheaper parking space, even though the only difference is 10-20 yen.

Japan is pretty famous for automated parking garages (see here and here) but I guess the capital investment and the presence of cheaper street parking prevents this from being used.

[Tom M]

Gary, Pittsburgh did not sell the meters, neither did they lease them. The current plan, which the mayor opposes, is to sell the meters along with 5 garages to the local parking authority and that entity will sell bonds to pay for it.
Nowhere in the reporting is any indication of the amount of revenue currently generated.

[Priest]

Atlanta has had a similar experience this year, with the outgoing mayor having negotiated a deal with a private contractor. Not for 75 years though. The extra hitch here is that the private company was also empowered to write tickets.

Then they set up signage that was false or misleading - "Enforced 24 Hours", when that was not the agreement, and no mention of Sundays exempt. And the max time you could pay for was 1 hour. Basically attempting to generate revenue through tickets as much as through meters.

Massive complaints and resistance ensued, with a huge spike in court challenges, with the one, overworked Traffic judge tossing all the tickets, with the legal question of whether the private employees of Park Atlanta constituted "officers".

After a ticket moratorium and lots of neighborhood meetings it's been sort of straightened out so that there are a couple of different parking "zones" - designated entertainment zones have a 4 hour limit, others a 2 hour limit, and the meters and signage have been changed to reflect the actual enforcement times.

It will be interesting to see how much profit Park Atlanta makes compared to what the city was paid. The new rate is $2/hour, which is twice what it was before, although the city enforcement the last few years has been minimal (and there were swaths of town where the individual meters were being "harvested" by thieves).

[Gary Farber]

Tom M, thanks for the mention of Pittsburgh; as I've mentioned, I'm lacking for time at present, and I didn't go research anything close to all of Taibbi's mentions.

I do note the Pittsburgh plan deals with a quite poor current situation.

[...] Of the city's 8,800 meters, hundreds are broken, jammed or malfunctioning. [...] "I wouldn't believe it's that high. Tops is about 8 percent," says Onorato.

"That's hundreds and hundreds and hundreds of meters broken?" asks Delano.

"That's approximately, about what, 600, 650 meters," says Onorato.

Onorato says they try to repair the meters as quickly as possible, but we found areas like East Liberty where meters have been gone for more than a year.

That costs the city thousands of dollars.

So why can't the problem be fixed right now?

"We would need to hire additional meter repairmen. Right now we have a budget of eight repairmen. We're now down to four actual on staff today," says Onorato.

Onorato said he could hire more repairmen, but he won't do that until City Council votes on whether to privatize or long-term lease the parking meters -- a vote expected in just a few weeks.

Here are the claims made by the company that wants the contract.

One of Taibbi's key points, of course, was the bait-and-switch aspect in the Chicago deal, of Morgan Stanley reselling the ownership after the deal was made. Whether that sort of thing could or couldn't happen in the proposed Pittsburgh deal, I'm obviously not in a position to judge.

Here is a counter-argument:

[...] Lamb says his plan would keep public assets under city control, avoid a state takeover of the pension fund and hold down parking rates.

"The kind of deal that the mayor is talking about is the kind of the deal you enter into when you're desperate," Lamb told KDKA Political Editor Jon Delano. "We're not desperate."

Lamb says there is no reason for the city to turn all its parking garages and meters over to a private company, allowing them to raise parking rates dramatically.

"You're basically selling off a public asset that generates significant revenue for our city," he notes. "You're walking away from $2 billion dollars worth of future revenue for a one-time up-front payment that will go into the pension fund and likely diminish over time and we'll be back in this situation again in the near future."

Lamb's proposal would keep the city's public assets public and still meet the state requirement that the city put $210 million into the city's pension fund by year end.

"We want to do it in the least expensive way as possible to the end users, in this case those who would be paying increased parking rates."

First, Lamb proposes advancing $60 million out of the city's $130 million dollar reserves to the pension fund.

Second, the remaining $150 million for the pension fund would be raised through a franchise sale of garages and meters from the city to the Pittsburgh Public Parking Authority.

Lamb says this allows City Council to maintain some control over the assets and rates -- important to Council President Darlene Harris, who says her constituents oppose the mayor's plan.

The principles, at least, seem worth endorsing.

Small business also has concerns.

Tom M, here's what I read about the Mayor of Pittsburgh's proposed deal, which is a fifty-year lease to the LAZ Parking Ltd, the exact same company in question in Chicago, with the 75-year lease.

When the final bids were opened on Mayor Ravenstahl's proposal to lease the city's parking garages and neighborhood meters for 50 years, the mayor declared his surprise.

"The winning bid of $451 million, it certainly blew away my wildest expectations," he said.

But the winning bidder, LAZ Parking Ltd., was hardly a surprise to industry analysts who see LAZ as a fast-growing operator of parking garages across America.

"LAZ has been in business for the past 30 years," LAZ CEO Alan Lazowski told KDKA Money Editor Jon Delano.

"We started in Hartford, Conn., in 1981, and we're now nationwide company that operates in 21 states and over 100 cities and we're the fourth largest parking operator in the country."

One of its largest operations is in Chicago which has been controversial with critics and the city's inspector general accusing the mayor there of leasing assets worth much more than the money LAZ paid.

Could that be true here?

Pittsburgh City Council hopes to find out by conducting its own independent study of this project due Friday.

But even if Pittsburgh's city garages and parking meters are worth more than LAZ bid, some critics say the more immediate concern is that LAZ will be able, under Ravenstahl's plan, to raise parking rates in the city.

I don't know anything about what's going on in Pittsburgh beyond this, but if I lived there, I'd surely be asking questions and investigating.

[Countme?]

Gary:

Peace to you too and luck and health with the move to California.

Someday, Lewis Black will just have a stroke already and find a happier place.

[Harald Korneliussen]

Through my efforts to understand cryptic American folk songs, I have learned that the word you perhaps intended to use was "dogie" rather than doggie.

[Gary Farber]

Yes, the correct spelling for a motherless or neglected calf is a "dogie," but not so much">http://www.lyricsfreak.com/b/blues+brothers/theme+from+rawhide_20020777.html">much really as regards the way the lyric is always written down.

Of course, most of the lyric sites are simply transcriptions/guesses.

It's a fair point that I probably should have gone with the proper spelling of the word, since I didn't bother to establish the official lyric's spelling.

Here is the original.

A little before my time, and I was never into Westerns, but the song is memorable, particularly after especially after the Blues Brothers covered it, although they were actually in color at the time.