Chip Taylor

Private parks

In the comments to an earlier post about Chicago's Millenium Park, Cal Ulmann and TM Lutas both allude to the existence or possibility of private parks.

Good point. Problems of collective action don't necessarily call only for public solutions. I can think of two situations in which private markets provide something similar to a park.

One is in the common areas that are a part of some residential subdivisions. I've seen subdivisions that include a park (or perhaps a playground) among the common areas that are supported by home owner association dues. This sort of situation has existed for a long time.

A somewhat newer (I think) situation is the type of subdivision (I can't recall the term for it) in which a large portion of greenspace is protected by a conservation easement; the home lots are arranged around it, so that everyone is adjoining it or at least has a good view. Here in South Carolina subdivisions like this have been built near the coast; the green space is environmentally-beneficial marsh land. The developer sells fewer lots and the lots are smaller, but they are worth more because of the adjoining open space. The owners can have confidence that the undeveloped area will remain so through the use of the easement.

These situations have a couple of things in common. First, they are arranged so that the people paying for the area capture all or most of the benefit associated with its existence. They are able to do so, at least in part, by restricting access to the area. The playground is available only to subdivision residents or their guests; the marshland is of little benefit (well, there are some environmental benefits) to people who don't own a house next to it.

Second, the decsion to provide the "park" is made when only one entity owns and controls the land in question -- the developer. Once the decision is made, the lots are marketed to, and bought by, people who think the park is a desirable amenity. No one has any excuse to say they were forced to pay for something they didn't want.

Both situations also tend to occur at the higher-price end of the scale. That's not surprising; people with more money are more likely to spend some of it on less-essential amenities. But I don't count that as an essential feature of the solution.

Together the two features provide a way around the collective action problem. Tie together the costs and the benefits, so that those who pay get the benefits. And make the decision before there are many deciders.

I'm not familiar with private solutions that don't have those two features. In other words, where the park has open-access, and where the decision to build the park occurs after an area has been developed. I'd like to learn more about how private solutions work in those situations.