NYC to Privatize On Street Meters? Of course…
Word is that Mayor Bloomberg and his crew are looking to close a budget shortfall by privatizing the on street parking meters. You can read all about it here in the Wall Street Journal.
The NYC Department of Transportation has been exercising the vendors of high tech meters and sensors over the past year to come up with ‘new and exciting’ ways to park in the Big Apple. I wonder how leasing off the meters fit in with that project?
There are a lot of cities looking at this concept because there is a lot of money involved. See my blog above for a list. I have two problems with it. First I believe that they greatly under value the on street parking system. Merchant Banks and parking operators like Laz would not be so eager to plop down a billion bucks for these deals if there wasn’t gold in them thair streets.
Cities are notorious in their inability to run parking operations. They set the price for the lease much too low, because that is their public sector experience. They find themselves in a difficult position. If the value the on street systems at what they should be, it would be a tacit admission that over the years all the people involved in running the systems on the city’s side have done a poor job. Can’t have that.
Before my readers come unglued, I know there are well run parking operations out there. But you have to admit, taken on the aggregate, parking operations, particularly in large cities, don’t wrap themselves in honor.
The second issue I have with these programs is a tad more circumspect. Is it reasonable to lease out an asset like parking that may in the future have other uses (want to turn a street into a walking mall, how about changing the traffic flow, what if someone comes up with an idea to replace the streets around a certain block with buildings 75 years in the future.) One would be enjoined from taking those steps because of the deal cut with companies who run the parking. At best, the change would be very costly.
As quoted in the WSJ:
“I’m very partial toward privatization,” said Aaron Renn, a well-known urbanist and blogger who has studied the parking issue. He is a vigorous critic of deals like those struck in Chicago and Indianapolis.
Mr. Renn said parking meters aren’t a city asset, like a bridge, or a service, like garbage collection. Rather, he said, meters are primarily a tool for setting policy on the road, dictating where and for how long motorists leave their cars.
A contract with a private operator should preserve the city’s ability to say how the space along its curbs is used, such as making significant changes like the pedestrian plazas favored by the Bloomberg administration, Mr. Renn said.
He said any deal stretching beyond seven years could constrain future administrations from making similar shifts.
“What [meters] are is an urban-planning tool that the city uses to manage access to a precious real-estate asset,” he said. “For instance, the highest best use of that space may not be parking. What you don’t want to do is sign any deal that constrains your ability to change that policy in the future.”
NYC will lease its parking to the private sector for a few billion. The money will be gone in a heartbeat, and we will continue on, looking for other things to sell rather than places to reduce costs.