Privatize Parking Lots By Selling Them

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"Privatize Parking Lots By Selling Them"

A “parking lot” is basically just an empty piece of land set aside for cars and I don’t think it really makes sense for government to be in the business of providing parking spaces at sub-market rates. So when I heard that New Jersey Transit might be “privatizing” parking lots near commuter rail stations that sounded like a decent idea to me. But what does it even mean to “privatize” a parking lot? Well it seems to me that the way you would put a parking lot into private hands would be to sell the land which might then be operated as a market-rate parking lot or else redeveloped into something else like transit-oriented housing or shopping.

What’s actually being proposed for New Jersey, however, is something different. New Jersey is going to contract-out the operation of the parking lots. That might lead to more rational pricing of the lots in the short term, but Steven Smith argues it will only make the overall problem worse:

[R]ather than taking on entrenched suburban interests, we’re just adding another layer of government dependents, this time of the monied corporate variety (bidders include KKR, Morgan Stanley, Carlyle, and JP Morgan). The land on which transit parking lots sit is uniquely positioned to be converted into dense development, and the only thing worse than sitting on the land would be for the agencies to sign away their rights to change that within the foreseeable future.

Right. Today’s privately owned parking lot could be tomorrow’s transit-oriented development. And today’s publicly owned parking lot could be sold to a private owner. But a parking lot that’s publicly owned by contracted out to a private operator is the worst of both worlds—a kind of publicly guaranteed, contractually obligated subsidy to parking and parking-lot operation.

Private land ownership is neither a new concept nor a radical one. If a public agency owns some land somewhere that it wants to privatize, the correct way to privatize it is to sell it thus generating some privately owned land. This shouldn’t be hard. If it’s the case that a parking lot is the most valuable use of the land, then private owners can figure that out.

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