The first parking meter was installed in Oklahoma City in 1935. It cost five cents per hour to park, and even back then the concept was controversial. It’s easy to forget that meters do more than just eat money; they perform an essential function in retail corridors.
Meters cause turn-over, which allows more shoppers to have access to parking and therefore the stores on the retail corridor. While many retail corridors can be accessed on foot or by transit and bikes, parking remains an important ingredient to successful commerce. The Metropolitan Planning Council’s recommendations to the parking meter concession can help improve the positive benefits of meters to our neighborhoods.
Chicago’s 75-year $1.15 billion privatization of the city’s parking meters in 2008 was the nation’s first private concession for a publicly owned on-street metered parking system. The initial 2008 deal is widely regarded as a failure, and in 2013, the City renegotiated the concession. After analyzing the 2013 Chicago parking meter concession renegotiation, MPC’s major findings and recommendations include:
- The renegotiation will save taxpayers $1 billion over the remaining life of the concession.
- Fraudulent use of disabled parking placards has cost Chicago taxpayers $73 million in just four years.
- Promote mobile pay. The City retains any revenue generated from the service beyond $2 million annually.
- Retain finance experts in the city to protect the public when considering such deals.
- Strategically place new meters where demand is high to reach 100 percent system in service and reduce or eliminate the payment to the private operator:
Ways to reach or exceed 100 percent system in service
- The day the 2008 contract was signed, “system in service”—a measure of how much revenue the meters are collecting relative to an expected norm—was 100 percent. Since that day, the city has never hit 100 percent system in service—currently it is around 95 percent. Under the contract, the City must annually increase meter rates to match inflation, or the system in service percentage drops and the City’s on the hook for the difference. It's also on the hook for any permanent changes to concession meters that reduce their value. One way to generate the additional revenue necessary to reach or exceed 100 percent system in service is adding meters where demand is high. If the City brought system in service to 100 percent, it then would have greater latitude to pilot best parking practices, such as performance pricing initiatives, with less budget impact.
- Reserve meters: Once the City has added enough concession meters and made other optimizations to reach 100 percent system in service to eliminate the payment to the private operator, any new meters should be reserve meters, for which the City would keep 85 percent of revenue. Some of that revenue could be used for neighborhood improvements.
- Performance pricing: At 100 percent system in service, meter rates should fluctuate based on demand at different times of the day and week.
Read the full analysis.