Kind of a misleading characterization - the MBTA wants to securitize parking revenue, not "privatize" parking.

Although securitization trades a stream of revenue for current money this is something that public entities have done for years. It's how most turnpikes and many other roads were built--you sell bonds to finance construction, backed by toll revenues over time. Meanwhile it retains control of the essential aspects of parking-the ability to change rates in order to encourage use of transit.

As for Acton - hello, Nimbys. Increased parking to allow more commuters to use rail instead of driving? The horror!

by ah on Jan 6, 2011 10:49 am • link • report

My impression of Boston had always been that of a city blessed with the backbone of a very good transit system, but plagued with a culture not interested in maintaining and supporting it. Look at the recent bustitution of the E Line.

by Reid on Jan 6, 2011 10:49 am • link • report

They should consider actual privatization - sell the land!

by Alex B. on Jan 6, 2011 10:53 am • link • report

The big problem with trading parking for "walkable housing" is that the housing is limited, in high demand, and ends up too expensive for middle income individuals and families. Sure, they set aside a few token subsidized units for lower income families, but most of the units go to very high income people, and it's the middle income families that lose out. This is why sprawl continues regardless, and now the middle income commuters just lost out on precious parking.

by Alex on Jan 6, 2011 10:55 am • link • report

Actually, privatizing parking would be a good thing, as it would actually rationalize to a market price. The problem with city run parking is that the prices fall under the whims of the loudest group, as we have seen in DC with the whining against costs.

I'm not a huge fan of privatization in general, as most of the time you don't want the harshness of the market, but there are cases where it makes a lot more sense.

by John on Jan 6, 2011 11:12 am • link • report

Dead on Alex, even if we dropped to a one car household it still would have cost more to live in the walkable community.

@ selling parking and other government long term income. This would be fine if the money went to specific projects, etc. Unfortunatly if the money is just going to closing the state budget gap what will they do next year or the year after. States need to face the fact that it might take them 5 years to start making money again. They need long term solutions.

by Matt R on Jan 6, 2011 11:14 am • link • report

Regarding ah's point about securitization:

Aaron Renn at the Urbanophile made this exact point about Chicago's parking meters. While it's fine to do this sort of trick for a toll road (since a toll road likely won't change in its basic configuration over a long period of time), it's very bad to do so for parking. In Chicago, the city has essentially ceded policymaking on its own streets. This parking proposal for the T (and a similar one for NJ Transit) would do the same thing - lock those agencies into one policy for a long period of time. It would also lock those land uses in for a long period of time.

This is shortsighted both in terms of operations, but also in terms of ridership. MTR Corporation in Hong Kong serves as its own real estate developer. There are two key aspects to this: 1) the TOD they build provides a return on investment that helps pay for more transit infrastructure. 2) the kind of development they build is at transit supportive densities, thus feeding riders to the infrastructure. That's a very nice symbiotic relationship.

These parking deals are not symbiotic. They represent a one time deal to close a budget gap, and in the process will cede the agency's ability to develop transit-supportive land uses in the long term.

by Alex B. on Jan 6, 2011 11:21 am • link • report

@ Alex

The big problem with trading parking for "walkable housing" is that the housing is limited, in high demand, and ends up too expensive for middle income individuals and families...

If my understanding of economics decent, if more housing is built, won't the cost of housing eventually go down?

by Randall M. on Jan 6, 2011 11:23 am • link • report

The problem with trading land line rotary dial phones for wireless high speed internet phones is that they cost so much. So only a few people will be able to afford them and you'll still have land line phones spreading around the country.

OK, not the best analogy. But the point is, why would the popularity and cost of TOD housing be an argument against it? It's clearly evidence that it's a desired good. People WANT to live in TOD so the price is bid up. It seems to me that is an argument to build MORE of it. Not less. And to argue that more TOD equals continued sprawl seems a bit illogical. Not saying that more TOD necessarily and always equals less sprawl. Obviously, there are many more factors involved.

by Josh S on Jan 6, 2011 11:30 am • link • report

@John - the problem with full privitization is double marginalization. The cost of parking influences the use of transit. If you have a private company pricing the parking they will do so without regard to the negative effects their pricing has on the use of transit. When the prices of both parking transit are set by the transit authority, the effects of changing each price on transit use can be accounted for in decisionmaking.

As for the point about using the funds to close the deficit--that is a fair one, but is really more a question of how to pay for that deficit. It's not really an argument against securitization so much as wasteful use of funds obtained through securitization.

As a long-run matter, committing to providing parking for a number of years isn't inherently bad. It creates stability and predictability that can enhance the use of transit. If people weren't sure there would be parking at the train station it would make them less likely to locate near the station but beyond walking distance. That's inefficient. Also, let's be pragmatic: In the next 25 years it is extremely unlikely that parking will no longer be needed at commuter rail stations. Perhaps the demand will stay flat (despite population increases) but it seems highly unlikely that people will stop driving and want condos there instead. And if they do, chances are the project could come up with the money to buy out the remainder of the security obligation.

by ah on Jan 6, 2011 11:35 am • link • report

@ah

The problem is that looking at parking alone is far too narrow of a definition.

Parking isn't the root issue, access to the system is. Likewise, parking isn't the key asset, rather, the land the agency owns around the stations is.

Also - yes, in the future, the agency could buy out the operator if they wanted to build something on a parking lot. However, now you've just made the process much more complex. Instead of the agency just forgoing potential future revenue, they actually have to pay cash. That's a huge difference.

Ideally (and it's too bad this practice isn't available/legal/encouraged in the US), you'd have the agency acting as a real estate developer itself for the land around stations.

by Alex B. on Jan 6, 2011 11:39 am • link • report

David: You shouldn't comment if your don't have the facts straight. This is a monetization of a revenue stream not privatization of parking real estate. So this doesn't impede the T's fairly robust TOD program at all. You really don't know the terms of such a deal and yet you are making assumptions.
Alex B. This deal is nothing like the Chicago deal which was essentially a concession lease for a single up front payment and not a revenue bond offering secured by a revenue stream that the T is contemplating.

by Jill on Jan 6, 2011 12:49 pm • link • report

I am also from Zoo England (Portland) and generally find the planning and zoning operations in my home state to be less progressive than the DMV governments and significantly behind the curve. They are still building strip malls in the suburbs still while most of the country has moved to "town center" style new retail developments. So that stuff in Acton doesn't really surprise me.

by DCCT on Jan 6, 2011 12:50 pm • link • report

Alex B. There is no change in operations in this deal. No "operator" as you suggest. The T will continue to operate and control the pricing of its lots.

by Jill on Jan 6, 2011 12:52 pm • link • report

@ Alex and Matt R and Randall M

The conversation you're having about housing costs at TOD reminds me of the conversation about the Streetsblog article that observed that TOD actually lead to more car ownership in the TOD area because the new inhabitants were more wealthy:
http://dc.streetsblog.org/2010/10/25/avoiding-the-unintended-consequences-of-transit-oriented-development/

But I must say I agree with the argument that this is just a result of supply not meeting demand. Clearly, there are people willing to pay $1800/mo to live in the new apartments at White Flint, for example.

(In other words, if building transit drives property values way up, we need more transit, financed in part through TIFs or similar devices)

I would hypothesize that relaxing the controversial height limit would increase the supply of transit-accessible housing (and housing in general), potentially lowering property values and rents in current transit-accessible locations, and thus making transit-accessible housing affordable for more people (though not everyone).

by EJ on Jan 6, 2011 12:57 pm • link • report

@Jill,

I was speaking more generally about these types of deals, rather than MBTA's specifics. My point still stands - monetizing these revenue streams assumes that the revenue generator will be there for the terms of the deal, whether that's 25 or 75 years. When a change is warranted (say, eliminating parking in favor of TOD), then someone is going to have to get bought out.

by Alex B. on Jan 6, 2011 1:00 pm • link • report

Most of all, such a deal would force the MBTA to keep its parking garages as parking for the life of the contract. If they want to develop mixed-use transit-oriented development (TOD) instead, their hands will be tied.

Isn't that an exaggeration? If a TOD project looks really good 10 year hence, can't they just buy out the contract for something similar to the present value of future parking revenues? And if they didn't sell the parking rights to the private contractor, and wanted a TOD project, wouldn't they still have to be giving up those same future parking revenues? They aren't actually selling the land, are they?

by JimT on Jan 6, 2011 1:51 pm • link • report

@JimT

They're looking at these deals because they have budget holes. They're going to get a large up front payment in exchange for future revenue. That payment will likely plug budget gaps.

It's very different when you simply decide to forgo future parking revenue in order to develop a parcel. Under this deal, you'd have to pay cash.

Deciding to give up future revenues is a relatively easy decision for an agency to make. Actually shelling out the cash to make it happen would be much more difficult.

The contract details will matter a great deal. In Chicago's meter deal, for example, the city has to pay out an enormous amount of money to buy out a parking space (if they wanted, say, a curb extension) - equivalent to that meter's revenue as if it were occupied 100% of the time, 24 hours a day - i.e. they will far overpay to do that, far more than forgone revenue under the old system would have cost.

by Alex B. on Jan 6, 2011 2:08 pm • link • report

@AlexB. I can imagine that there are some costs to regaining access to the land compared with sitting on it. I just wonder if it may be an exaggeration to suggest that the city's hands are tied, which implies you can't do something. Here is sounds like the scheme would increase the future transaction costs, only killing marginal TOD's.

Why wouldn't the Chicago deal you mention be an illegal liquidated damages clause, since it seems to be intentionally greater than actual damages?

by JimT on Jan 6, 2011 3:12 pm • link • report

@Redi.

The E line south of heath street became a bus in 1985. That's what you call recent?

by JJJJJ on Jan 6, 2011 3:31 pm • link • report

Also, the original article here is misleading.

By comparing Boston to DC, you end up using Metro as the comparison point.

But we're not talking about "The T", as the headline says, that's the subway system. We're talking about Commuter Rail, Aka, MARC.

Building a parking garage 30 miles from Boston is not a bad thing. As far as I know, there are no plans to expand any parking garage attached to the subway system, even though Aleiwfe (for example) was built to support an extra 2 floors of parking, and the 1,500 car garage fills at 8am every day.

So for DC folks, Acton isn't quite Silver Spring. It's more like Brunswick.

by JJJJJ on Jan 6, 2011 3:35 pm • link • report

@JJJJJ

MBTA is more like WMATA than you'd realize. Since Boston's subway is an older system, it doesn't stretch nearly as far out into the suburbs as Metro does. But MBTA does have a far more extensive commuter rail network than WMATA does. The end result is that an MBTA commuter rail station isn't all that different from a far out WMATA station with a lot of parking (Shady Grove, Greenbelt, etc.)

Acton to Boston is about 22 miles as the crow flies. Shady Grove to DC is about 19 as the crow flies.

by Alex B. on Jan 6, 2011 3:53 pm • link • report

When I was growing up, it took about the amount of time to drive from Acton to Boston as now it takes to drive from Rockville to downtown DC. So I don

Remember, Metro is a hybrid urban subway and commuter rail. Boston's Red/Green/Blue/Orange lines are not equivalent to WMATA's. Metro fills a commuter rail role at Vienna, Franconia/Springfield, Branch Avenue, or Shady Grove in a way that Alewife does not.

by David Alpert on Jan 6, 2011 3:56 pm • link • report

5Js,
What I was talking about was the decision to back out the order demanding a restoration of the service. That was in the last ten years. Now the tracks are paved over. That's 1960s-style thinking.

Also, I have ony some connections with Boston, but I believe people use the phrase "the T" to refer to the commuter rail too. For example:

http://mobile.boston.com/news/local/massachusetts/articles/2010/12/06/t_rail_lines_to_test_quiet_cars_as_refuge_from_noisy_world/

by Reid on Jan 6, 2011 4:42 pm • link • report

What exactly is the "market" price? The point where the most profit is made? The point where you are getting maximum utilization? The most efficient?

The concept of "market" prices usually fails when you don't have other options nearby. You have a nice little monopoly on parking at commute rail stations, and you can charge the maximum rent. Sure, you can "expand' the market size and say a higher price will result in less customers, but that might be a good thing in terms of profit.

Rather like Google, really. They can charge what they want because they own search. Time to regulate their prices as well?

by charlie on Jan 6, 2011 4:57 pm • link • report

Jim T and Alex B -- This is not a operating budget gap filling exercise. They are looking at this deal because they have debt service issues. This will essentially retire more expensive bonds with cheaper ones and result in a significant savings on their debt service going forward. Also since revenue bonds shouldn't tie up the real estate they should still be able to do TOD deals as long as the revenue stream isn't impacted. It's highly unlikely that these parking lots are 100% occupied.

by Jill on Jan 6, 2011 5:12 pm • link • report

@Alex and David

The red line, to braintree, also provides metro style suburban service.

Lets not talk about distances, let's talk about service. We're talking about TOD and parking remember.

Acton gets commuter rail service. Meaning, 30 minute frequencies at best, 2 hours at worst. Very similar to MARC.

Meanwhile, even suburban areas served by Metro get the same exact service as Takoma, Dupont Circle or Union Station. With the exception of some short turns, all trains run everywhere.

You dont set up TOD where the Transit part means 8 trains on Sundays.

And you shouldnt set up a 3,000 car garage where a train comes every ten minutes.

THAT is the major distinction here, not distance from the center.

Reid, yes, you can refer to the entire organization as "The T" but it almost always means the subway. If anyone says to you "let's take the T" they dont mean the bus or the ferry, they mean the subway. And most people refer to the MBCR as the train or the commuter rail.

by JJJJJ on Jan 6, 2011 8:22 pm • link • report

Just to add to that, Acton sees 8 trains a day on Saturdays and Sunday each way. 17 each way on weekdays. The red line runs at around 12 minute headways all day, from 5am to 1am. Thats 100 or so trains a day each way. (5 less on Sundays)

by JJJJJ on Jan 6, 2011 8:25 pm • link • report

Every fact in this article is incorrect. The T is not looking at Acton for its 1,000 space commitment.

The T's lots are already Privatized (they are run by 4 private companies).

The Authority is not thinking of selling the land or any concession of the lots.

I don't expect more form online publications but this is pretty bad even for online.

by G on Jan 7, 2011 12:33 pm • link • report