Pricing Parking in Chicago

Barbara Kiviat understands, I think, why Chicago sold off its parking meters on the cheap:

Chicago hadn't raised rates on some of its meters in 20 years--there's a lot of value to be had by the person who doesn't fear getting voted out of office. Chicagoans, used to paying 25 cents an hour downtown, will see the rate go up to $1 an hour next month, and to $2 an hour by 2013. That doesn't make for a happy populace, but still, isn't that something some brave Chicago politicians could have done all on their own, without giving up the rights to an asset that's apparently worth $1.2 billion?

The simple answer is "evidently not": if Chicago's parking meters are still charging just 25 cents an hour, then the political obstacles to raising that rate are clearly enormous.

Chicago's mayor, Richard Daley, is absolutey on the side of the angels when it comes to green initiatives, and nothing would be greener than managing to reduce the amount of auto traffic downtown. Unfortunately, that hasn't happened yet -- Chicagoans are more attached to their cars than ever. And so maybe this parking-meter initiative is the municipal equivalent of a CEO hiring McKinsey to come in and recommend job cuts: it's a way of doing what needs to be done while somehow managing to blame someone else.

In any event, Chicago should get much more than $1.157 billion in benefit from this deal. Underpriced on-street parking is the bane of many large cities' existence: it results in a huge amount of needless congestion as drivers circle around endlessly, looking for a spot to park. I wouldn't be at all surprised if the benefits from lower congestion are larger than the up-front cash that Chicago is receiving.