Why Parking Is Never Free

The city of Chicago does not get parking meter money.

This is the story.

Chicago’s Parking Meter Mistake

During the Great Recession, Chicago’s budget problems got worse. Imagining a parking revenue bonanza, they decided to lease their parking meters. For what appeared to be a whopping amount–$1.15 billion–they offered a 75-year lease to a Morgan Stanley-led group for approximately 36,000 meters.

Between 2009 and 2024, those meters became a cash cow milked by the Morgan Stanley investors for $1.87 billion in profits. Now though, with 57 years to go, for (reputedly) more than $2.3 billion, the lease is for sale. While the city said a buyback would be too expensive, a NY investment firm expressed interest. If the City Council approves the deal, Chicago’s meter lease will have a new owner. And, as meter charges continue climbing, Chicago still loses the money it might have had.

Our Bottom Line: The Tragedy of the Commons

Actually, meters are just one way that we pay for parking because parking is never free.

Search time cost the most in New York:

When a resource is owned by no one- and therefore everyone–we tend to overuse it. Called the tragedy of the commons, the excessive use of parking spaces creates a cost for all of us. Though not money, that cost includes the time spent looking for a space and the aggravation that certain people are “hogging” the existing spaces. It is also possible that stores lose customers on very hot or very cold days because no nearby parking is available.

With parking meters, the costs shift. Yes, there is money spent. But that charge creates the incentive to limit the usage. As a result, stores could enjoy extra business, most municipalities get the revenue, and we spend less time circling the block.

But not in North Dakota where parking meters are prohibited.

My sources and more: The Chicago Tribune had most of today’s facts. From there we went back to this econlife post for more on the cost of parking and several cities’ solutions.