CHICAGO (CN) — Parking on most streets in Chicago will cost you at least $2 an hour. In some busier areas that jumps up to $4.50, and the downtown Loop area can run as high as $7.
You’d be hard pressed to find pricier street parking in the United States. A 2019 study by the parking services company Parkopedia found only Miami Beach and New York City are more expensive.
But this wasn’t always in the case. Before 2008, most parking in the Windy City was a relatively reasonable 25 cents per hour, no matter where in town you were. But 14 years ago the City Council, at the urging of then-Mayor Richard M. Daley, sold the entirety of the city’s street parking system to a private company for a cool $1.15 billion.
For Daley and the city’s accountants, the deal made sense: it was the height of the Great Recession and they had budget holes to plug. But for the people of Chicago, especially its low-income residents, it came as one more price tag in the ever-increasing cost of living.
The company that bought the meters, aptly named Chicago Parking Meters LLC, reached a deal with the city that quadrupled the average street parking price, cut back on free parking hours and installed meters on what had previously been free parking streets. Though the deal was amended in 2013 to make it slightly less draconian, CPM still mandates that the city must maintain at least 30,000 parking meters on average in any given year. It also retains the power to legally contest the city removing meters, and to demand payment for any street closures or transportation improvements like bike or bus lanes that could reduce the number of functioning meters in the city. If the revenue generated by the parking system drops below the system's total value, the city also has to make up the difference - allowing CPM to influence the city's parking rates.
It isn’t a short term deal, either. The lease agreement CPM signed with the City Council won’t expire until 2084.
It was such a lopsided deal that the Better Government Association called it "a lesson in worst practices."
For CPM, mostly owned by Morgan Stanley but with healthy investment from the Emirati oil industry, the deal was a slam dunk, especially after a federal judge found in January the company's monopoly on street parking is perfectly legal. Street parking generates millions in profits per year, over $87 million in 2020 alone. By 2019, CPM had made back its initial $1.15 billion investment plus $500 million in profit on top.
But it wasn’t just Morgan Stanley’s financial savvy or the naivete of the 2008 Chicago City Council that made the deal possible. It took place within the paradigm of a wider financial movement, indeed an socioeconomic ethos that some researchers say has come to dominate the entirety of American life.
That ethos is called “neoliberalism.” It’s a train of thought that believes in the primacy of the free market, to the point that it welcomes the privatization of what were once public services. Its origins as an economic theory stretch back to the 1800s, but in the U.S. its practical history may actually begin in Chicago with economist Friedrich von Hayek. Hayek was a professor at the University of Chicago from 1950 to 1962, and his ideas on the benefits of a free market system influenced a generation of lawmakers and economists, particularly the influential later University of Chicago economist Milton Friedman.
Friedman, who’s credited as another architect of U.S. neoliberalism, was extremely skeptical of government regulation of the market.