Saturday, November 26, 2022 | Back issues
Courthouse News Service Courthouse News Service

Chicago parking meters: Harbingers of neoliberal privatization  

The privatization of Chicago’s parking meters over a decade ago foreshadowed modern austerity politics in the Windy City and beyond.

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.

ADVERTISEMENT

“Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals,” Friedman said in 1979. “It should protect citizens from crimes against themselves or their property. When government – in pursuit of good intentions tries to rearrange the economy, legislate morality, or help special interests, the cost come in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active player.”

Lily Geismer, a professor of history at Claremont McKenna College and author of several texts on neoliberalism in the U.S., said this ethos holds true for modern adherents of Milton’s philosophy to this day.

“For [neoliberals], the government’s main function is… to support and protect the free market,” she said.

Though Western neoliberalism’s most famous political figures are conservatives like Ronald Reagan and Margaret Thatcher – who eviscerated social safety nets in the U.S. and U.K., respectively, and espoused free-market solutions to crises instead of government intervention – Geismer said that Democrats too have become enamored with neoliberalism since the 1970s.

In her estimation, the Democratic Party since that time has transformed from a party of the multiracial working class to one representing the interests of affluent, college-educated, mostly white liberals – people who don’t worry nearly so much about money as the working poor.

“They have their own approach to neoliberalism, like with public-private partnerships,” Geismer said. “It’s all about believing that the free market is the most efficient way to handle problems.”

The privatization of Chicago’s parking meters under Daley’s watch, Geismer said, is a textbook example of neoliberal politics. A homecoming, even. It also proved a harbinger of the form of politics that had already begun usurping the Daley political patronage networks - the so-called Chicago Machine - by the late aughts. Much as Geismer said, under Daley’s mayoral successors Rahm Emanuel and Lori Lightfoot, private-public partnerships, not patronage, have come to rule City Hall. 

Neoliberalism "is everywhere. It touches on everything in American life,” Geismer said, including education, infrastructure, health care, transportation and policing.

Another example is Ventra, the private company with ties to military contractors that bought up Chicago’s public transit fare system in 2013 for $454 million, with Emanuel’s blessing. Ventra’s launch was marred by months of technical problems and, as with CPM and the city’s parking meters, public train and bus prices went up after it replaced the old public fare system. The biggest price increase came in 2017, when fares increased from $2 for buses and $2.25 for trains to $2.25 and $2.50, respectively. At the time, Emanuel defended the price increases as necessary to avoid service cuts. 

The influence of neoliberalism can also be seen in Emanuel’s appointed school board opting to close 50 public schools in 2013, mostly in low-income Black and Latino neighborhoods. It was the largest school closure in Chicago history, and heralded the creation of multiple for-profit charter schools to absorb many of the displaced students. The charter schools remain a heated political topic in Chicago to this day.

Charter school expansion has stalled out since Lightfoot took the mayor’s office in 2019, running as a reformer. She has also led efforts to improve social welfare through initiatives like a universal basic income pilot program for low-income residents, and free internet services for some low-income families with children enrolled in the Chicago public school district. But throughout her tenure she has embraced what University of Texas at Austin sociology researcher Riad Azra labeled as another aspect of neoliberalism: austerity. 

“Austerity traditionally has been defined as the economic policies surrounding deficit cutting,” Azar wrote in 2015. “When public debt runs too high, according to the theory, the accounts must be balanced by cutting spending and raising taxes.”

Lightfoot’s 2021 city budget follows Azar’s description of austerity to a tee. In response to the economic crisis brought on by the pandemic, her budget that year included a major property tax increase, gas tax hikes, layoffs of city workers and severe speeding enforcement that threatened to ticket any driver going even 6 miles per hour over the posted limit.

It didn’t earn her many friends in City Hall. Though the budget narrowly passed, she infamously told several City Council members that if they didn’t vote for the budget that they shouldn’t “ask [her] for shit for the next three years.”

In fact, Lightfoot has made enemies both to the left and right since 2019. She’s feuded with the left-leaning Chicago Teachers Union on multiple occasions over issues of student safety, school resources and teacher pay, while to the ire of the city’s growing progressive factions her 2022 budget also expanded the Chicago Police Department’s funding to over $1.9 billion. That’s more than 40% of the city’s entire operating budget.  

However, she and the city’s Department of Public Health have also imposed Covid-19 vaccine mandates on city workers and bar and restaurant patrons, angering the city’s conservative elements - including the police unions. Having made everyone angry, by late 2021 her approval rating stood at only about 42.5%. 

This anger from both ends of the political spectrum is predictable, Geismer said, given neoliberalism’s esteem of the free market. When everything costs money, she said, eventually most people run out of it. And when that happens, the status quo can’t help but collapse. 

“We’ve seen pushback to the neoliberal consensus from both the left and the right,” Geismer said. “Some people blame neoliberal policies for the rise of Trumpism. And to the left, a lot of the labor militancy we’ve seen in the last few years is a response to it.”    

The future of neoliberalism in Chicago and beyond is uncertain, Geismer said. With both left- and right-wing populism growing alongside the gap between wealthy and poor, it’s unclear how long centrist free market policies will remain viable. For Democrats in their big city bastions, she opined, the best path forward may be a return to the working class politics that they once relied on.

“I have hope that with this labor action, [the Democrats] can claw back to being a working class party,” she said.

In the meantime, remember to bring some extra cash if you plan a road trip to Chicago between now and 2084. Parking can cost up to $7 per hour.

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.

Loading
Loading...