Wednesday, January 18, 2012

Privitized, Dynamically Priced Parking- a good deal for cash strapped cities?

Chicago Cashing In on Privatized Parking; Could LA be Next? (Steven Dornfeld, City Watch, Dec. 19, 2011)

Also discussed here: CPM-Chicago Parking Meters

A key example of the value of applying the pricing concept to parking rates is described in the article reviewed today about Chicago where the investment in the new technology needed for smart meters and dynamic rates was covered by leasing the parking system to the private sector. The result is increased revenue to the city, less congestion and vehicle emissions downtown as fewer vehicles have to search for a parking space and a public that is slow to accept it- the director of parking amusingly said "Thank God we don't have capital punishment" in Illinois”. This reminds us of the slow careful approach used in Stockholm to gain public acceptance of congestion pricing there.

Key Quotes:

“The initiative has enabled the city to extract large up-front payments from parking concessionaires, modernize its parking system and launch a form of "congestion pricing" aimed at reducing the parking crunch in downtown Chicago

“city launched the effort in 2006, soliciting proposals to modernize four downtown parking garages and awarding a 99-year lease for $563 million..Two years later, he said, the city did the same thing with 34,500 on-street parking meters and 18 metered lots with another 1,240 spaces. It ultimately awarded a 99-year lease for $1.56 billion”

“all of the city's "dumb" parking meters were replaced with more than 4,600 "smart," solar-powered pay boxes at a cost of more than $40 million. The pay boxes can handle the fees for up to 15 parking spaces and the rates can be changed via wireless technology”

“a rate schedule was established that will raise rates by 2013 to amounts ranging from $6.50 per hour in the Chicago loop to $2 per hour in more remote neighborhoods. Prior to 2009, the rates at most meters were 25 cents per hour”

“Chicago uses wireless technology to reduce rates at some parking meters during non-peak hours. However, thus far, city officials thus far have resisted the idea of employing a system of "dynamic pricing" to change rates depending on demand”
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