# The City That Sold Itself To Wall Street

An episode of [Cautionary Tales with Tim Harford](https://invisiblenetwork.ai/podcast/1484511465), 1 Sep 2023, 38 min.

Audio: https://podtrac.com/pts/redirect.mp3/pdrl.fm/18db03/tracking.swap.fm/track/SxlTEPDY7xDg35RXkASs/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/c0ae8c6e-22f0-4e9b-ac1c-ae390037ac53/59b42595-c0be-45a7-b931-b06e00ff76e8/audio.mp3?utm_source=Podcast&in_playlist=7f5a4714-6b10-4ccf-a424-ae390037ac70

Cautionary Book Club: When Morgan Stanley offered to lease Chicago's parking meters for the princely sum of $1 billion, the City Council were convinced that they had struck gold. They hastily signed the deal. But they soon learnt that they hadn't just traded away parking revenue - they had traded away the streets themselves... In this hybrid episode of Cautionary Tales, Tim Harford first tells the story of the Chicago parking metres fiasco of 2008. In the second half, Tim is joined by Henry Grabar, author of Paved Paradise, to discuss the lessons we can glean from Chicago's deal with Wall Street, and why parking is such an emotive issue for so many. See omnystudio.com/listener for privacy information.

## Transcript

[0:15] Speaker 1: Pushkin. A winter's day in Chicago, early two thousand and nine.
[0:27] Speaker 2: It's cold.
[0:29] Speaker 1: Scott Wagger's pack, a newly elected alderman for the north
[0:33] Speaker 1: side of town, is keen to impress despite the freezing temperatures.
[0:38] Speaker 1: He's pounding the streets personally investigating a complaint about some
[0:42] Speaker 1: garbage blocking an alley. As he surveys the scene, piles
[0:47] Speaker 1: of paperwork everywhere, he realizes that this is no ordinary
[0:52] Speaker 1: pile of trash. This paperwork is all about the recent
[0:56] Speaker 1: controversial sale of Chicago's parking meters to a consortium led
[1:02] Speaker 1: by an investment bank, Morgan Stanley. The parking meters weren't
[1:07] Speaker 1: the first chunk of the city that Chicago's mayor had
[1:10] Speaker 1: sold off. Mayor Richard M. Daley was famous for it.
[1:14] Speaker 1: It was more than in the air, said Daly's chief
[1:17] Speaker 1: financial officer, Paul Volpey. We were the leaders in it.
[1:21] Speaker 1: You couldn't go anywhere without Mayor Daily's reputation for being
[1:24] Speaker 1: a leader in this industry being brought up to you.
[1:28] Speaker 1: Daily had privatized the toll road that ran between Chicago
[1:31] Speaker 1: and Indiana. He privatized delinquent tax collection, the city's janitorial services,
[1:38] Speaker 1: and was even working on a deal to privatize Midway Airport.
[1:42] Speaker 1: So when the idea came to privatize Chicago's parking meters,
[1:46] Speaker 1: a lot of people shrugged and said to themselves, sure,
[1:50] Speaker 1: why not. The idea had been raised in early two
[1:54] Speaker 1: thousand and eight, a year before Scott Waggerspak had found
[1:58] Speaker 1: all that paperwork in a freezing alley. At the time,
[2:02] Speaker 1: the global financial crisis was brewing and the city needed
[2:07] Speaker 1: some cash, so it held an auction for the right
[2:12] Speaker 1: to operate Chicago's street parking meter system. Whoever won that
[2:17] Speaker 1: auction would run the meters and keep the revenue. There
[2:21] Speaker 1: were only a couple of bidders, which wasn't ideal, but
[2:24] Speaker 1: one of those bidders, the consortium led by Morgan Stanley,
[2:28] Speaker 1: offered over a billion dollars one point one five six
[2:33] Speaker 1: billion dollars in fact, for the right to lease curbside
[2:36] Speaker 1: parking meters and collect parking fees across the city. At
[2:41] Speaker 1: the time, it wasn't clear who was investing with Morgan Stanley.
[2:45] Speaker 1: Scott Waggerspak had been asked to vote on the deal,
[2:47] Speaker 1: but he never felt had been given all the information
[2:50] Speaker 1: he needed. Now by sheer coincidence he was looking at
[2:55] Speaker 1: that information blowing around in a Chicago back alley. Apparently
[3:00] Speaker 1: one of the main investors was the Emir of Abu Dhabi. Whatever,
[3:07] Speaker 1: Morgan Stanley had negotiated a sweet enough deal to interest
[3:11] Speaker 1: sophisticated investors from around the world. What mattered, of course,
[3:16] Speaker 1: was whether it was a good deal for Chicago. So
[3:20] Speaker 1: was it On the surface, Perhaps the city was only
[3:24] Speaker 1: making twenty million dollars a year in meter fees. Chicago
[3:28] Speaker 1: could just stick Morgan Stanley's money in the bank, earn
[3:32] Speaker 1: a couple of percent interest and make more than that,
[3:35] Speaker 1: all money which could fund services for the city's hard working,
[3:39] Speaker 1: tax paying citizens. Even better, the city would get the
[3:44] Speaker 1: rights to the parking meters back eventually, although admittedly not
[3:49] Speaker 1: until twenty eighty four. Morgan Stanley had bid for a
[3:54] Speaker 1: seventy five year lease. But still, a billion dollars is
[3:59] Speaker 1: a lot of money, isn't it. I'm Tim Harford and
[4:05] Speaker 1: you're listening to cautionary tales. Parking is an emotional issue
[4:34] Speaker 1: in a town like Chicago. In two thousand and eight,
[4:38] Speaker 1: around the time the meet A deal was being negotiated,
[4:41] Speaker 1: Chicago Tribune's John Cass devoted a column to describing a
[4:46] Speaker 1: fight over a parking space. One fellow Abe squeezed his
[4:51] Speaker 1: car in too close for the comfort of the other
[4:54] Speaker 1: car's driver, Carol. She told him he couldn't park there.
[4:59] Speaker 1: He told her she had nothing to worry about. Lady,
[5:03] Speaker 1: I'm not going to hit your car, Abe declared. Then
[5:07] Speaker 1: her husband, Joseph, showed up and started arguing. There was
[5:10] Speaker 1: some shouting, then some shoving, and before long Joseph was
[5:15] Speaker 1: in an ambulance an Abe was handcuffed in the back
[5:18] Speaker 1: of a police car. Abe was an Air Force veteran
[5:22] Speaker 1: of the Second World War. He was eighty two. Joseph,
[5:26] Speaker 1: his fallen opponent, was a sprightly eighty Just another day
[5:33] Speaker 1: arguing about parking in Chicago. Given the fact that feelings
[5:39] Speaker 1: tend to run high on the topic of parking, some
[5:42] Speaker 1: of Chicago's aldermen were uneasy when the meter leasing deal
[5:46] Speaker 1: was placed in front of them. The council's decision making
[5:49] Speaker 1: process seemed rushed, even if the city administration had been
[5:53] Speaker 1: working on the idea for almost a year. You had
[5:57] Speaker 1: a year, but you're giving us two days, complained one alderman.
[6:01] Speaker 1: Why are we rushing asked another. The proposed deal was
[6:06] Speaker 1: five hundred and twenty one pages long, written in legal ease.
[6:11] Speaker 1: What does that all mean? Lamented a third. Scott Waggerspack
[6:16] Speaker 1: had been in the room. He decided he needed a
[6:19] Speaker 1: reality check on the offer. He hurriedly slapped together his
[6:22] Speaker 1: own calculations and almost immediately realized why Morgan Stanley's billion
[6:28] Speaker 1: dollar in change offer might be less generous than it looked.
[6:33] Speaker 1: Chicago might only be making twenty million dollars a year
[6:36] Speaker 1: from META fees, but some of those META rates hadn't
[6:39] Speaker 1: changed since the nineteen eighties. Twenty million dollars was nothing
[6:44] Speaker 1: compared to what could be squeezed out of those metered
[6:47] Speaker 1: parking spots. It would be easy enough to double, triple,
[6:50] Speaker 1: even quadruple rates. In fact, the city's own officials had
[6:54] Speaker 1: floated the idea of increasing meta rates and nearly tripling
[6:58] Speaker 1: META revenues just a couple of years earlier, and it
[7:02] Speaker 1: wasn't a secret that Morgan Stanley planned to raise Meta rates.
[7:06] Speaker 1: Alderman Waggerspack's estimate was that the More and Stanley group
[7:10] Speaker 1: could pay the city three or four times as much
[7:13] Speaker 1: and still be in profit. But when Wagaspack tried to
[7:17] Speaker 1: get the city's budget director to answer some questions during
[7:20] Speaker 1: a council meeting coffee break. It didn't go well. He
[7:24] Speaker 1: literally ran off, says Wagerspac. And Wagerspack wasn't a heavy
[7:29] Speaker 1: hitter like Mayor Daily, Daily was the ultimate insider. His dad,
[7:35] Speaker 1: Richard J. Daily, had also been the Mayor of Chicago,
[7:39] Speaker 1: Mayor for life. The joke went after he served for
[7:42] Speaker 1: twenty one years. Mayor Daily the second was also just
[7:47] Speaker 1: about to pass the twenty year mark. A heavy jowled,
[7:50] Speaker 1: suit and tie power broker well into his sixties who
[7:54] Speaker 1: combined old school Chicago politics with the corporate ease of
[7:58] Speaker 1: a trained lawyer. Wagerspack was a dorky looking thirty something
[8:03] Speaker 1: from Colorado via Kenya, where he'd served in the Peace Corps.
[8:08] Speaker 1: Freshly elected, he was the perfect person to cast a
[8:11] Speaker 1: critical eye over the parking meter deal, but very poorly
[8:15] Speaker 1: positioned to do much about it because the pressure to
[8:19] Speaker 1: pass the deal was on. To delay it puts our
[8:24] Speaker 1: budget at risk, declared Chicago CFO Paul Volpei, this is
[8:29] Speaker 1: the deal. We either accepted or we don't. Listener they
[8:35] Speaker 1: accepted it. Chicago Parking Meters or CPM, the company set
[8:43] Speaker 1: up by the Morgan Stanley Consortium, took over the city's
[8:46] Speaker 1: meters in two thousand and nine. The early weeks didn't
[8:50] Speaker 1: go smoothly. Chicagoans were soon furious not only about the
[8:56] Speaker 1: way that CPM immediately jacked up the parking charges and
[9:00] Speaker 1: extended the meeted hours, but also about the fact that
[9:03] Speaker 1: they neglected to change the signs in forming drivers about
[9:07] Speaker 1: the new hours and charges, Adding insult to injury. The
[9:11] Speaker 1: parking meters started to choke on all quarters that were
[9:15] Speaker 1: being fed into them. CPM couldn't get round to empty
[9:19] Speaker 1: them fast enough. Even when the meters were working, drivers
[9:23] Speaker 1: didn't enjoy having to carry buckets of quarters around in
[9:27] Speaker 1: their cars. Every quarter fed into a parking meter seemed
[9:31] Speaker 1: to be going direct to Wall Street. Some suburbanites wrote
[9:36] Speaker 1: to the Chicago Press explaining that they would be avoiding
[9:39] Speaker 1: the city at all costs. Personally, I'm in full boycott mode,
[9:45] Speaker 1: wrote one. I'll stand on my head to spare myself
[9:48] Speaker 1: a visit if street parking is involved, to hell with Chicago.
[9:53] Speaker 1: Another correspondent explained that she was being treated for breast
[9:57] Speaker 1: cancer in a city hospital before the privatization. She might
[10:01] Speaker 1: have to wait a while to find a spot, but
[10:03] Speaker 1: then she'd put in a few quarters and head in
[10:05] Speaker 1: for her radiotherapy. Now, however, she put in her first
[10:10] Speaker 1: quarter and realized it would only buy seven minutes. Seven
[10:14] Speaker 1: I start thinking I'm there early, and I'll be there
[10:17] Speaker 1: for a while. They might run late, so we need
[10:19] Speaker 1: to build some cushion time in. So I calculate all that,
[10:22] Speaker 1: realize I don't have eight pounds of quarters with me.
[10:25] Speaker 1: Screw you daily. One of Mayor Daly's public relations advisors,
[10:31] Speaker 1: Marilyn Katz, put it even more bluntly. It's one thing
[10:36] Speaker 1: to give away and sell your airports, she said, but
[10:39] Speaker 1: the parking meters were an insult every day that said
[10:43] Speaker 1: if you every time you parked your car. And six
[10:47] Speaker 1: months after the deal had been signed, the city's Inspector
[10:51] Speaker 1: General released a report explaining that, in effect, when the
[10:55] Speaker 1: City of Chicago had signed that deal with Morgan Stanley,
[10:58] Speaker 1: the city had had its face ripped off. The Inspector
[11:02] Speaker 1: General reckoned the fair price of the deal was two
[11:05] Speaker 1: or three times what the city had been paid standing itself.
[11:10] Speaker 1: Told investors, and I'm slightly oversimplifying here, but only slightly,
[11:14] Speaker 1: that they wouldn't have to wait seventy five years to
[11:16] Speaker 1: make their money back. They might well make their money
[11:19] Speaker 1: back inside the first decade. Ouch It was just as
[11:26] Speaker 1: Alderman Scott Waggerspac had predicted, But then came something he
[11:30] Speaker 1: hadn't predicted. In February two thousand and nine, barely weeks
[11:35] Speaker 1: after he had voted in vain against the deal, wagers
[11:39] Speaker 1: Pack was informed that across his neighborhood in Chicago's North Side,
[11:43] Speaker 1: CPM would start charging to park on Sundays. Sundays had
[11:49] Speaker 1: previously been a day of worship, rest, and free parking.
[11:54] Speaker 1: This was not going to go down well with Wagerspack's constituents.
[11:58] Speaker 1: He proposed keeping the old shorter hours and the free
[12:02] Speaker 1: Sunday parking on a few hundred of the meters. It
[12:06] Speaker 1: could be done, explained City of Fishing, But under the
[12:10] Speaker 1: terms of the deal with Morgan Stanley, the city would
[12:13] Speaker 1: have to pay compensation for interfering with CPM's right to
[12:18] Speaker 1: charge what it wanted when it wanted. How much compensation, Well,
[12:24] Speaker 1: a few hundred thousand dollars a year, and that's for
[12:28] Speaker 1: a small change to fewer than one percent of the
[12:31] Speaker 1: city's meters. As the journalist Henry Gribar explains in his
[12:37] Speaker 1: book Paved Paradise. That was the moment the truth about
[12:42] Speaker 1: the full implications of the deal dawned on Scott Wagger's pack.
[12:48] Speaker 1: Chicago City Council hadn't just traded away parking revenue. They'd
[12:52] Speaker 1: traded away the streets themselves. Cautionary tales will be back
[13:03] Speaker 1: after the break, Chicago was starting to realize just how
[13:14] Speaker 1: much control it had ceded to Wall Street. The Morgan
[13:18] Speaker 1: Stanley deal was predicated on a particular number of meters
[13:22] Speaker 1: in particular spots on Chicago's curb sides. When rama Manuel
[13:28] Speaker 1: succeeded Richard M. Daley as mayor, his team arrived with
[13:32] Speaker 1: visions of a greener, more walkable city. Those visions soon
[13:37] Speaker 1: made painful contact with the reality that Daly's team had
[13:41] Speaker 1: negotiated those nice little pocket parklets, tiny urban oases of
[13:47] Speaker 1: seats and lush planters, each one squeezed into a former
[13:51] Speaker 1: parking spot. That is going to cost you, said CPM,
[13:55] Speaker 1: our parking spot, our meter, our lost revenue. But the
[13:59] Speaker 1: city could rent back prime downtown spots for the low,
[14:04] Speaker 1: low price of one thousand dollars each month. What about
[14:12] Speaker 1: the idea of an open Streets festival in which the
[14:16] Speaker 1: streets would be closed temporarily to motorized traffic, allowing kids
[14:20] Speaker 1: to play games or ride their bikes. Neighborhoods to hold
[14:23] Speaker 1: block parties, that sort of thing. Don't even ask what
[14:27] Speaker 1: that's going to cost. The scheme was abandoned. Every idea
[14:32] Speaker 1: for greening Chicago streets had a serious price tag attached.
[14:37] Speaker 1: Bike racks, drop off zones for restaurants and stores, Bans
[14:42] Speaker 1: on parking in rush hour to ease congestion, no parking
[14:46] Speaker 1: zones near intersections to improve visibility and safety, all possible
[14:52] Speaker 1: for a price congestion pricing to raise money and ease congestion.
[14:58] Speaker 1: Forget it. Such a scheme was just impractical in the
[15:01] Speaker 1: light of CPM's right to parking revenues, and whether you're
[15:05] Speaker 1: in favor of congestion pricing or not, it does it
[15:09] Speaker 1: seem that to rule it out for seventy five years
[15:12] Speaker 1: as a side effect of a deal over parking meters, well,
[15:16] Speaker 1: that's not how a democracy should really work. Bike lanes,
[15:21] Speaker 1: bus lanes don't make me laugh. Do you know how
[15:23] Speaker 1: much parking they eat up? Do you know how much
[15:26] Speaker 1: money the city would have to pay over to Morgan
[15:28] Speaker 1: Stanley's group curbside seating for restaurants during the pandemic. Sure,
[15:33] Speaker 1: of course this is a global emergency. Oh, by the way,
[15:39] Speaker 1: pay up. There were workarounds to be sure. If the
[15:44] Speaker 1: city could find suitable alternative spots, they could install meters
[15:48] Speaker 1: in those spots and hand over the meter rights to
[15:51] Speaker 1: CPM as a form of compensation. But that was complicated
[15:56] Speaker 1: and the alternative spots were soon all used up. Chicago's
[16:01] Speaker 1: privatization of parking meters is widely regarded as a fiasco,
[16:07] Speaker 1: a quintessential cautionary time. If they really needed money so
[16:11] Speaker 1: badly back in two thousand and eight, they could have
[16:14] Speaker 1: borrowed from the bond markets, in which countless bidders compete
[16:18] Speaker 1: to lend money to cities. Instead, they signed away their
[16:22] Speaker 1: control over parking and over the streets themselves for seventy
[16:27] Speaker 1: five years to the winner of an auction in which
[16:30] Speaker 1: there were only two bidders, and they sold it cheap.
[16:36] Speaker 1: Yet there is an irony here, As Henry Gribar argues
[16:39] Speaker 1: in Paved Paradise, some of what CPM was doing on
[16:43] Speaker 1: behalf of its international backers was actually good parking policy.
[16:48] Speaker 1: One reason to have parking meters in the first place
[16:51] Speaker 1: is to make sure that people who need to park
[16:53] Speaker 1: can find a space, even if they have to pay.
[16:57] Speaker 1: Chicago had long underpriced parking, which meant that there was
[17:01] Speaker 1: too much demand for these cheap spaces and not enough
[17:03] Speaker 1: spaces to go around. You can see that easily enough
[17:07] Speaker 1: by looking at Chicago's parking revenue. Before the deal, the
[17:11] Speaker 1: city made ten times as much from parking fines than
[17:15] Speaker 1: from parking charges. Parking spaces were so cheap that counterintuitively,
[17:21] Speaker 1: people had to park illegally instead because the cheap legal
[17:25] Speaker 1: spaces were so often full. That changed after privatization. There
[17:31] Speaker 1: were almost always some free spaces, which meant that nobody
[17:34] Speaker 1: needed to park illegally and nobody clogged up the streets
[17:38] Speaker 1: driving around in search of a space. Businesses started to
[17:41] Speaker 1: notice that they made more money when street parking was
[17:45] Speaker 1: priced high enough to free up spaces. In fact, some
[17:48] Speaker 1: of them lobbed against the reintroduction of free Sunday parking.
[17:53] Speaker 1: Other people switched to buses and trains and bikes, easing
[17:57] Speaker 1: congestion and reducing pollution. All of these benefits emerged once
[18:03] Speaker 1: somebody took parking seriously and forced drivers to pay real
[18:08] Speaker 1: money for a value service. If only the City of
[18:11] Speaker 1: Chicago had had the courage to do that job itself,
[18:15] Speaker 1: rather than handing over the responsibility and most of the
[18:18] Speaker 1: financial gains to Morgan Stanley and friends. The deal had
[18:23] Speaker 1: been signed at the end of two thousand and eight,
[18:27] Speaker 1: when Morgan Stanley paid more than a billion dollars one thousand,
[18:31] Speaker 1: one hundred and fifty six million. By the time Richard M.
[18:35] Speaker 1: Daley left office in twenty eleven, three years later, only
[18:40] Speaker 1: seventy six million dollars was left. The other one thousand
[18:44] Speaker 1: and eighty million dollars had been spent. By twenty nineteen,
[18:50] Speaker 1: Morgan Stanley and partners had made back their initial investment,
[18:55] Speaker 1: Chicago had spent the money, Morgan Stanley were in profit,
[18:58] Speaker 1: and there were sixty four years of the deal still
[19:02] Speaker 1: to run. Not to worry, that was a few years back.
[19:07] Speaker 1: Now there were only six decades left. This episode of
[19:20] Speaker 1: Cautionary Tales was based with permission, on the reporting of
[19:23] Speaker 1: Henry Grabbar in his book Paved Paradise, and I strongly
[19:27] Speaker 1: recommend you get hold of a copy as soon as
[19:28] Speaker 1: you can. But Chicago's parking Meeter fiasco isn't the only
[19:33] Speaker 1: cautionary tale in Henry's book, and so I present to
[19:36] Speaker 1: you our first ever hybrid episode of cautionary tales, half
[19:40] Speaker 1: traditional tale and half cautionary conversation with Henry Grabar. Henry,
[19:45] Speaker 1: Welcome to the show.
[19:46] Speaker 2: Thanks for having me.
[19:48] Speaker 1: We heard this story about two octogenarians beating each other
[19:51] Speaker 1: up in an argument over a parking space, and it's
[19:54] Speaker 1: not the only such story you tell others in your book.
[19:57] Speaker 1: Why is it that people get so upset about parking?
[20:01] Speaker 3: Well, I don't blame them for it. Actually, I think
[20:04] Speaker 3: it's natural to be upset about access to parking when
[20:09] Speaker 3: you live in a society where it has become impossible
[20:13] Speaker 3: to do even the most basic tasks like buying a
[20:17] Speaker 3: gallon of milk or taking your kids to school without
[20:20] Speaker 3: using your car. So we have built for ourselves a
[20:22] Speaker 3: place in which parking and finding parking has become a
[20:26] Speaker 3: precondition of life itself, and so naturally people do tend
[20:30] Speaker 3: to get upset when they don't find parking spaces. And
[20:33] Speaker 3: so I think the challenge here is not just to
[20:37] Speaker 3: ask people to chill out about parking, but to focus
[20:40] Speaker 3: on redesigning communities in a way where parking becomes less important.
[20:44] Speaker 3: And by the way, even as the author of a
[20:47] Speaker 3: book that argues that while we made a lot of
[20:50] Speaker 3: mistakes about parking, I am not immune from this. I mean,
[20:53] Speaker 3: I don't like paying for parking any more than anybody
[20:56] Speaker 3: else does. I get parking tickets too, And I grew
[20:59] Speaker 3: up in New York City, and I feel like the
[21:02] Speaker 3: expectation that parking is going to be really challenging is
[21:06] Speaker 3: so ingrained in the way I think about city life
[21:09] Speaker 3: that when I'm driving, my movie is always to take
[21:11] Speaker 3: the first parking spot I find, even if I'm six
[21:14] Speaker 3: blocks away from my destination. Right, because you have scars
[21:17] Speaker 3: from looking for parking in New York City for too
[21:19] Speaker 3: many years.
[21:20] Speaker 1: Why did you want to write a book about parking.
[21:22] Speaker 3: Well, I'm a reporter by day, and the stories that
[21:25] Speaker 3: I write are about cities, so I write about architecture
[21:29] Speaker 3: and real estate and infrastructure, climate change, housing, stuff like this.
[21:33] Speaker 3: And I began to find that in every single story
[21:37] Speaker 3: that I started to work on, there was this hidden
[21:40] Speaker 3: element that kept coming up that would change the way
[21:44] Speaker 3: I understood what I was writing about. And that element,
[21:47] Speaker 3: of course, was parking and in the United States, parking
[21:51] Speaker 3: is actually a fundamental concern of architecture and real estate.
[21:55] Speaker 3: It's the first thing that a developer considers when they
[21:58] Speaker 3: decide what they can put on a lot. Because of that,
[22:01] Speaker 3: it's an essential component of housing. It determines the cost
[22:05] Speaker 3: of housing, the quantity of housing, the type of housing
[22:08] Speaker 3: we get in terms of its design. And then finally,
[22:11] Speaker 3: by becoming such a major component of the urban environment,
[22:14] Speaker 3: it also changes the environment, like capital e in terms
[22:18] Speaker 3: of our relationship with rain, with heat, with pollution. I mean,
[22:22] Speaker 3: this was perhaps the most shocking revelation to me of
[22:25] Speaker 3: all was when I went to Houston after Hurricane Harvey
[22:28] Speaker 3: had devastated the city flooded tens of thousands of homes,
[22:32] Speaker 3: and I began to look at the rainfall records in
[22:34] Speaker 3: Houston over the years. And while it's true that storms
[22:38] Speaker 3: have gotten more intense in Houston over the last few decades,
[22:41] Speaker 3: what has grown much faster is the amount of runoff
[22:44] Speaker 3: that's created. That rain hits the city of Houston, which
[22:47] Speaker 3: is one of the most auto dependent paved over cities
[22:51] Speaker 3: in the United States, and it doesn't go anywhere, It
[22:54] Speaker 3: just stays on that pavement that asphalt that concrete, and
[22:57] Speaker 3: in this way, providing all this parking actually changes our landscape, right.
[23:02] Speaker 3: It becomes a major component determining whose house floods during
[23:06] Speaker 3: a rainstorm, just because of all the land that's been
[23:09] Speaker 3: converted into impervious surface. So that was a revelation for me.
[23:13] Speaker 1: There was a very striking sentence early on in your book,
[23:16] Speaker 1: You're right, parking is a mutant strain of yeast in
[23:19] Speaker 1: the dough of architecture, making our designs bigger, uglier, and
[23:23] Speaker 1: further apart. If the Empire State Building had been built
[23:27] Speaker 1: to the minimum parking requirements of a contemporary American city,
[23:31] Speaker 1: for example, its surface parking lot would cover twelve whole blocks,
[23:37] Speaker 1: and that would be a legal requirement. You'd have to
[23:39] Speaker 1: do it. Why do we have these laws and these rules.
[23:42] Speaker 3: I think these rules often seem inexplicable when you read
[23:46] Speaker 3: about them and you understand the way they stifle our
[23:50] Speaker 3: ability to provide attractive architecture, walkable neighborhoods, affordable housing and
[23:55] Speaker 3: all that. But I think if you put yourself in
[23:57] Speaker 3: the shoes of the urban planners of the nineteen fifties,
[24:00] Speaker 3: they begin to make more sense.
[24:02] Speaker 2: Now in the nineteen fifties.
[24:04] Speaker 3: Most cities in the United States had scarcely changed in
[24:08] Speaker 3: terms of their urban form since the beginning of the
[24:11] Speaker 3: twentieth century, and so obviously these big cities after the
[24:14] Speaker 3: Second World War are overrun with cars and traffic, and
[24:18] Speaker 3: planners think that the root of this problem is parking,
[24:20] Speaker 3: and that the reason there's so much traffic is that
[24:23] Speaker 3: everybody's looking for a parking space and there isn't anywhere
[24:25] Speaker 3: for anyone to park.
[24:26] Speaker 1: Which is not so they be wrong, right, shocking statistics
[24:29] Speaker 1: in your book about how much time and how how
[24:33] Speaker 1: many miles people drive just looking for parking spots, and
[24:36] Speaker 1: you know what percentage of the traffic on the road
[24:39] Speaker 1: is just drivers circling around looking for a free spot.
[24:42] Speaker 1: So it's not an absurd thing for them to think.
[24:45] Speaker 3: No, it's not an absurd thing for them to think
[24:47] Speaker 3: at all. And suburbs are really on the rise at
[24:50] Speaker 3: this point. Big new malls open with lots and lots
[24:53] Speaker 3: of free parking, and cities see this and they think
[24:55] Speaker 3: we have to up our parking standards to compete with
[24:59] Speaker 3: the suburbs. And this is a fatal mistake because cities
[25:02] Speaker 3: are never going to be able to offer the easy,
[25:05] Speaker 3: ample parking for free that is so common and so
[25:09] Speaker 3: expected at many suburban locations, it just can't work geometrically. Nevertheless,
[25:13] Speaker 3: they gave it their best shot, and one of the
[25:15] Speaker 3: ways they did so was a kind of sneaky thing
[25:17] Speaker 3: they did. They said, well, if we build all this parking,
[25:20] Speaker 3: the city's going to go bankrupt. So let's just give
[25:22] Speaker 3: it to the private sector. Let's make private developers bear
[25:26] Speaker 3: the cost of this transition. And the way we'll do
[25:29] Speaker 3: that is will pass laws that say that every newer
[25:31] Speaker 3: renovated building has to include extra y number of parking spaces,
[25:35] Speaker 3: and before long we will be competitive with the suburbs
[25:38] Speaker 3: in terms of parking. And I think it worked beyond
[25:41] Speaker 3: their wildest dreams because there's a lot of American cities
[25:43] Speaker 3: you can go to today where you go downtown and
[25:46] Speaker 3: it's thirty forty fifty percent parking.
[25:48] Speaker 1: But a town which is thirty forty fifty percent parking
[25:52] Speaker 1: is obnoxious in all kinds of ways, the environmental impact
[25:56] Speaker 1: to the lack of storm drainage. It's horrible for pedestrians
[25:59] Speaker 1: to walk around a city where there's so much parking
[26:02] Speaker 1: because everything is so far apart. You've got your empire
[26:04] Speaker 1: state building and it's serted by twelve blocks of parking,
[26:07] Speaker 1: or at least it would be. You also have situation
[26:09] Speaker 1: where it's just completely impossible to build affordable homes because
[26:14] Speaker 1: every time you want to build an apartment block, there's
[26:16] Speaker 1: just this colossally expensive parking requirement. The rules deliver the parking,
[26:21] Speaker 1: but they don't deliver liverable, walkable cities.
[26:25] Speaker 3: Yeah, and I think the attitude over the last ten
[26:28] Speaker 3: twenty years in American cities has very much been to
[26:31] Speaker 3: look at these rules and to look at this transition
[26:33] Speaker 3: that took place in the nineteen fifties and sixties and
[26:36] Speaker 3: say we got it wrong. And that's a big step
[26:39] Speaker 3: because for many years, the conventional wisdom was if you
[26:43] Speaker 3: provide more parking, there will be less traffic, and in
[26:47] Speaker 3: fact it came to be that it was mostly the opposite.
[26:49] Speaker 3: The more parking you provide, the more people will drive,
[26:53] Speaker 3: and the more parking you'll need because the urban environment
[26:55] Speaker 3: you create is so hostile to anybody who's not in
[26:59] Speaker 3: a car. Over the last ten to fifteen years, that
[27:02] Speaker 3: has changed.
[27:03] Speaker 2: We now have.
[27:04] Speaker 3: Dozens, if not hundreds of cities that have decided to
[27:07] Speaker 3: repeal these laws and to let builders, architects, developers, homeowners, etc.
[27:12] Speaker 3: Decide for themselves how much parking needs to accompany every
[27:16] Speaker 3: single apartment building, every single store, etc. And so you're
[27:19] Speaker 3: beginning to see a revival of those traditional urban forms
[27:23] Speaker 3: that were jettisoned over the course of the twentieth century.
[27:26] Speaker 3: But it's also true, of course, that parking doesn't exist
[27:29] Speaker 3: in a vacuum. People say, well, nobody rides the bus
[27:33] Speaker 3: or the street car or the train compared to how
[27:35] Speaker 3: many people drive, So we can't make it harder to
[27:38] Speaker 3: find parking because it is true in the United States
[27:41] Speaker 3: that for most people, most of the time, we do
[27:44] Speaker 3: not have a choice about whether we want to use
[27:46] Speaker 3: a car to get someplace, and so in that sense,
[27:49] Speaker 3: parking is equivalent to access. And it's not really our
[27:53] Speaker 3: fault that we get so up in arms every time
[27:56] Speaker 3: our parking is challenged, and we fight with our neighbors,
[27:59] Speaker 3: and we fight with the people trying to take our
[28:00] Speaker 3: parking spot and so on.
[28:02] Speaker 2: So that is the real issue.
[28:04] Speaker 1: One of the points that you make in the book
[28:06] Speaker 1: is that, as you say, parking is access, but that
[28:09] Speaker 1: is about the superficial kind of access, and it papers
[28:13] Speaker 1: over deeper inequalities.
[28:16] Speaker 3: I think most fundamentally, the focus on free and easy
[28:20] Speaker 3: parking as a precondition of every landscape precludes us from
[28:26] Speaker 3: building housing right. Both because the requirement to provide parking
[28:30] Speaker 3: brings up the cost of new housing and reduces its quantity,
[28:33] Speaker 3: but also because in a society where everyone is so
[28:36] Speaker 3: focused on having a parking space, neighbors often reject to
[28:40] Speaker 3: the concept of new people entering the city based on
[28:43] Speaker 3: their challenge to the parking status quo. This idea that
[28:47] Speaker 3: new neighbors are going to come and take away your
[28:49] Speaker 3: parking spot. And this is the reason that we should
[28:51] Speaker 3: oppose a new apartment building here, a new affordable complex there,
[28:56] Speaker 3: just straight off between parking and housing.
[28:57] Speaker 2: I saw firsthand.
[28:58] Speaker 3: I was in Austin, Texas, and I visited a housing
[29:01] Speaker 3: complex for the formerly homeless. This place has been constructed
[29:05] Speaker 3: according to the cities then parking minimums, with a giant
[29:09] Speaker 3: to story garage a top which were perched a couple
[29:13] Speaker 3: dozen new apartment units. Now the garage was almost almost empty.
[29:16] Speaker 3: Of course, because the people who had moved into this
[29:18] Speaker 3: complex were homeless, they were not statistically very likely to
[29:22] Speaker 3: own cars and drive cars every day, and yet the
[29:25] Speaker 3: building had been forced to dedicate half its square footage.
[29:28] Speaker 3: And god knows how much money and construction costs to
[29:30] Speaker 3: building this garage. And so yes, they had provided free
[29:34] Speaker 3: parking and all the access that comes with that, but
[29:37] Speaker 3: at the expense of creating new homes for people who
[29:40] Speaker 3: are living on the streets.
[29:43] Speaker 1: We'll be back in a moment. And when we return,
[29:45] Speaker 1: we'll be diving back. Should that be driving back into
[29:49] Speaker 1: the Chicago parking meters fiasco. We're back. This is cautionary tales.
[30:02] Speaker 1: And I've been talking to Henry Grebau, the author of
[30:05] Speaker 1: Paved Paradise. Henry, surely the city of Shicquo wasn't expecting
[30:10] Speaker 1: a free lunch from Morgan Stanley, So what did they expect?
[30:13] Speaker 1: What were they thinking?
[30:14] Speaker 3: I do think they thought they had found themselves a
[30:17] Speaker 3: pretty good deal, especially considering the moment in which they
[30:21] Speaker 3: were making this deal. Right, property tax revenues are expected
[30:25] Speaker 3: to shore up Chicago's budget as the recession takes effect,
[30:28] Speaker 3: and they saw in this deal an opportunity to put
[30:31] Speaker 3: a bunch of money into city coffers, following a model
[30:34] Speaker 3: that had been pretty well established in the city at
[30:36] Speaker 3: this time and not always had these deals led to regrets, right.
[30:40] Speaker 3: I think selling off, for example, the city on parking
[30:43] Speaker 3: garage is regarded now in an era of remote work,
[30:46] Speaker 3: as not a terrible decision.
[30:48] Speaker 1: I mean, I've told a number of people about this story,
[30:50] Speaker 1: which is incredible, and the reaction very often is it
[30:53] Speaker 1: must have been corruption. They can't have been that stupid.
[30:56] Speaker 1: But what I'm hearing is maybe they were that stupid.
[30:58] Speaker 2: I think they were. I think they were.
[31:00] Speaker 3: Moreover, it illustrates the process of doing business in Chicago politics,
[31:06] Speaker 3: where it's not corruption itself, but it's this disdained for
[31:10] Speaker 3: the public process, this lack of review, this sense of
[31:14] Speaker 3: self confidence that the mayor and his advisors and his
[31:19] Speaker 3: friends and associates in the business community know what's right
[31:22] Speaker 3: for the city, and that to question them is somehow
[31:26] Speaker 3: not conducive to city interest. One of the things that
[31:30] Speaker 3: this deal underlines for me is that this is one
[31:33] Speaker 3: way of managing city streets, and the way that Morgan
[31:37] Speaker 3: Stanley or I should say CPMLLC now is managing these
[31:41] Speaker 3: streets is to maximize revenue. And on a lot of
[31:44] Speaker 3: these blocks in Chicago, the parking is actually so expensive
[31:47] Speaker 3: that there's a lot of empty spaces. That's one problem
[31:50] Speaker 3: that this is not very well managed. And then the
[31:52] Speaker 3: other one is that, of course it is really a
[31:55] Speaker 3: catastrophe for the city of Chicago that all this money
[31:58] Speaker 3: that people are putting into these parking meters is not
[32:00] Speaker 3: going into public services, street trees and park benches and
[32:05] Speaker 3: cityscape improvements, drainage.
[32:07] Speaker 2: All that stuff in the neighborhood.
[32:08] Speaker 3: That makes you feel like when you put that money
[32:10] Speaker 3: in the meter, that money is going to something that
[32:13] Speaker 3: you value. And that's an important political component of making
[32:16] Speaker 3: people happy with these changes. And in Chicago to this day,
[32:19] Speaker 3: people are very unhappy with this change. And I think
[32:21] Speaker 3: that's one reason.
[32:22] Speaker 1: Why I always promise our listeners that our cautionary tales
[32:27] Speaker 1: will teach them something. There'll be a lesson to learn.
[32:30] Speaker 1: What's the lesson you draw from this one?
[32:33] Speaker 3: The lesson from the Chicago parking meter deal, I would argue,
[32:36] Speaker 3: is not in fact that cities should never think about
[32:40] Speaker 3: privatizing public services. I think there is a time and
[32:44] Speaker 3: a place for that. But the mistake of the Chicago
[32:47] Speaker 3: parking meter deal is much more specific. It's that if
[32:50] Speaker 3: you're signing a novel privatization bid for an asset that
[32:55] Speaker 3: has never before been privatized by any American city. You
[32:59] Speaker 3: need to spend more than twenty four hours reading the
[33:02] Speaker 3: four hundred pitch contract, and perhaps even you should commission
[33:07] Speaker 3: an independent consultant to review this deal of public hearing
[33:10] Speaker 3: in which experts testify in front of the city council
[33:13] Speaker 3: and so on. So it really is a case of
[33:15] Speaker 3: not really thinking through the future consequences. And Chicago did
[33:20] Speaker 3: what every other city has done, really, which is to
[33:23] Speaker 3: not seriously think about the value of parking. That is
[33:27] Speaker 3: the real cautionary tale here. If you don't think at
[33:30] Speaker 3: least a little about what all this parking might be worth,
[33:34] Speaker 3: you wind up making big mistakes like this.
[33:37] Speaker 1: We've been talking about cars, and of course the auto industry.
[33:41] Speaker 1: The experience of driving cars is being transformed by the
[33:45] Speaker 1: appearance of electric vehicles, which have different requirements I guess
[33:49] Speaker 1: to gasoline vehicles. So how are electric vehicles going to
[33:53] Speaker 1: change the parking landscape and change the issues we've been
[33:55] Speaker 1: talking about.
[33:56] Speaker 3: Electric vehicles are going to have a massive effect on
[33:59] Speaker 3: the way we think about parking. The parking space is
[34:02] Speaker 3: not just the place you store your car, but it's
[34:04] Speaker 3: also the place you fuel your car. We're talking about
[34:07] Speaker 3: electrifying and decarbonizing, at least in America. What is the
[34:12] Speaker 3: largest single source of greenhouse gas emissions the transportation sector.
[34:16] Speaker 2: So this is a vitally important.
[34:18] Speaker 3: Decision that households are making to opfer an electric vehicle,
[34:21] Speaker 3: and it is contingent on whether they have a place
[34:24] Speaker 3: to charge that vehicle at home. Now, two in three
[34:27] Speaker 3: American households do have a private garage where they can
[34:31] Speaker 3: more or less simply plug that vehicle into the wall,
[34:34] Speaker 3: but one in three American households don't. That's tens of
[34:38] Speaker 3: millions of people who are not going to be able
[34:41] Speaker 3: to make this transition to electric vehicles unless they can
[34:44] Speaker 3: find a place to charge them. Now, some of them
[34:46] Speaker 3: live in multi family buildings that need to be adapted
[34:48] Speaker 3: for electric charging.
[34:50] Speaker 2: But I think the.
[34:50] Speaker 3: More challenging question is what we're going to do about
[34:53] Speaker 3: street parking, Because if all those street parking spaces are
[34:57] Speaker 3: supposed to be available to people with electric vehicles where
[35:00] Speaker 3: they can charge their cars right where they're parked, that's
[35:03] Speaker 3: going to require either an infrastructural investment in electric chargers
[35:08] Speaker 3: that is beyond our wildest imaginations, or it's going to
[35:12] Speaker 3: require a new way of thinking about parking in which
[35:16] Speaker 3: people are more cooperative and they don't simply think of
[35:19] Speaker 3: a parking spot as a place to leave their car
[35:21] Speaker 3: for days at a time until they need it next,
[35:23] Speaker 3: but they begin to think of parking as a more
[35:25] Speaker 3: fluid and cooperative system in which people move in and
[35:28] Speaker 3: out of a select number of spaces that have become electrified.
[35:32] Speaker 3: The stakes of this are really high, right because if
[35:34] Speaker 3: we don't figure this out, we don't figure out a
[35:36] Speaker 3: way to let all these households to park the cars
[35:38] Speaker 3: on the street have a way to charge them, then
[35:40] Speaker 3: our densest population areas are going to be left out
[35:44] Speaker 3: of the electric vehicle transition and are going to be
[35:47] Speaker 3: left suffering from the consequences of the air pollution associated
[35:51] Speaker 3: with gas powered cars for decades longer than people who
[35:55] Speaker 3: live in the suburbs and have home garages.
[35:57] Speaker 1: Henry, before we began the interview, you mentioned that you're
[36:00] Speaker 1: about to move from Paris to Boston. Is that going
[36:03] Speaker 1: to raise any new parking headaches for you?
[36:07] Speaker 3: It's a funny question. It's going to raise an immediate
[36:11] Speaker 3: parking headache for me. I have long been as a
[36:14] Speaker 3: car free resident of Paris, extolling the city's decisions around
[36:20] Speaker 3: reducing the availability of parking and building green spaces and
[36:24] Speaker 3: bus lanes and bike lanes and all that stuff which
[36:26] Speaker 3: I use on a daily basis and very much appreciate.
[36:30] Speaker 3: And now I have to rent a giant moving truck
[36:33] Speaker 3: and drive it around the city. It is always an
[36:36] Speaker 3: adventure to try and find a parking spot here. But
[36:39] Speaker 3: then the other side of it is that I am
[36:40] Speaker 3: excited in a perverse way to go back to the
[36:43] Speaker 3: United States and once again experience the feeling of losing
[36:47] Speaker 3: your car in a giant supermarket parking lot.
[36:51] Speaker 1: Henry Grabar, thank you very.
[36:52] Speaker 2: Much, thanks for having me.
[36:55] Speaker 1: Henry Grabar is the author of Paved Paradise, which is
[36:59] Speaker 1: available now in the US and Canada from all good booksellers.
[37:03] Speaker 1: This episode of caution Retales was based with permission, on
[37:06] Speaker 1: a chapter of that book, and for a fullest of
[37:08] Speaker 1: us so says, as always, please see the show notes
[37:11] Speaker 1: at Timharford dot com. The Cautionary Tales is written by
[37:25] Speaker 1: me Tim Harford with Andrew Wright. It's produced by Alice
[37:29] Speaker 1: Fines with support from Edith Ruslow. The sound design and
[37:33] Speaker 1: original music is the work of Pascal Wise. Sarah Nix
[37:38] Speaker 1: edited the scripts. It features the voice talents of Ben Crowe,
[37:41] Speaker 1: Melanie Guttridge, Jemma Saunders and rufus Wright. The show wouldn't
[37:46] Speaker 1: have been possible without the work of Jacob Weisberg, Ryan Dilly,
[37:50] Speaker 1: Greta Cohne, let Al Millard, John Schnaz, Carlie mcgliori and
[37:55] Speaker 1: Eric Sandler. Cautionary Tales is a production of Pushkin Industries.
[38:00] Speaker 1: It was recorded in Wardall Studios in London by Tom Berry.
[38:04] Speaker 1: If you like the show, please remember to share, rate
[38:07] Speaker 1: and review go on you know it helps us and
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